Zonte Metals Inc. — Management Reports 2021

May 20, 2021

ZONTE METALS INC.

MANAGEMENT DISCUSSION & ANALYSIS

FOR THE YEAR ENDED

January 31, 2021

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

BACKGROUND

The Management Discussion and Analysis (“MD&A”) of Zonte Metals Inc. (“Zonte” or the “Company”) provides an analysis of the results for the year ended January 31, 2021 (the “Period”). The MD&A should be read in conjunction with the accompanying unaudited condensed interim financial statements of the Company for the Period and the audited financial statements of the Company for the years ended January 31, 2021 and 2020. The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”). All amounts are in Canadian dollars unless otherwise specified. Additional information regarding the Company is available on SEDAR at www.sedar.com.

FORWARD-LOOKING INFORMATION

Certain statements in this MD&A are forward-looking statements or information (collectively “forward-looking statements”). The Company is hereby providing cautionary statements identifying important factors that could cause the actual results to differ materially from those projected in the forward-looking statements. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as “may”, “is expected to”, “anticipates”, “estimates”, “intends”, “plans”, “projection”, “could”, “vision”, “goals”, “objective” and “outlook”) are not historical facts and may be forward-looking and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements.

By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, which contribute to the possibility that the predicted outcomes may not occur or may be delayed. The risks, uncertainties and other factors, many of which are beyond the control of the Company, that could influence actual results include, but are not limited to: limited operating history; exploration and development risks; regulatory risks; substantial capital requirements and liquidity; financing risks and dilution to shareholders; competition; reliance on management and dependence on key personnel; fluctuating mineral prices and marketability of minerals; title to properties; local resident concerns; no mineral reserves or mineral resources; environmental risks; governmental regulations and processing licenses and permits; conflicts of interest of management; uninsurable risks; exposure to potential litigation; dividends; and other factors beyond the control of the Company.

Further, any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all such factors and to assess in advance the impact of each such factor on the business of the Company or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. See “Risk Factors” below.

1.1 DATE OF REPORT

This report is prepared as of May 20, 2021.

1.2 OVERALL PERFORMANCE and COMPANY OVERVIEW

Zonte is a junior mineral exploration company primarily focused on gold. The Company’s common shares are listed and trade on the TSX Venture Exchange (the “TSX-V” or the “Exchange”) under the symbol “ZON”.

The Company has no producing operations and accordingly no operating income or cash-flow. The Company is dependent on accessing capital markets to raise the funds necessary to continue exploration on its existing properties, acquire new properties, and meet its ongoing working capital requirements. As of the date of this report, no mineral reserves or resources have been delineated on any properties in which the Company has an interest and, accordingly, the Company remains at a relatively early stage.

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

During the year ended January 31, 2021 (“F-2021”), the Company earned net income and comprehensive income of $85,957 an increase of $242,938 over the net loss and comprehensive loss of $156,981 incurred for the year ended January 31, 2020 (“F-2020”) with the decrease primarily attributable to Deferred income tax recoveries of $338,049 in F-2021 (F-2020 - $259,114) related to flow-through expenditures incurred during the period as well as Stock based compensation expense of $21,488 in F-2021, a reduction of $185,688, approximately 90%, over Stock based compensation expense of $207,136 in F-2020.

As a result of challenging financial markets in the junior resource sector over the past several years, and the Company’s limited financial resources, the Company has implemented a series of cost management strategies focused on minimizing cash operating costs and continues to manage its cash operating expenditures diligently.

During December 2019, the Company completed a private placement financing (the “2019 Private Placement”) and issued 1,157,935 units (the “2019 Units”) at a price of $0.23 and 4,183,167 flow through shares (the “2019 FT Shares”) at a price of $0.30 (together, the “2019 Private Placement”) for total proceeds of $1,521,275. Each Unit was comprised of one common share and one-half common share purchase warrant (the “2019 Warrants”) with each 2019 Warrant entitling the holder thereof to acquire one common share of the Company at a price of $0.35 at any time prior to June 20, 2021 (the “Warrant Term”). In connection with the 2019 Private Placement, the Company issued 299,517 Finder Warrants (the “2019 Finder Warrants”), paid cash finders’ fees aggregating $86,389 and incurred other issuance costs of $7,500. Each 2019 Finder Warrant entitles the holder to purchase one common share of the Company at an exercise price of $0.35 per share during the Warrant Term. If the closing share price of the Company’s common shares on the TSX Venture Exchange is greater than $0.50 per common share for a period of 20 consecutive trading days at any time during the Warrant Term, the Company may accelerate the expiry date of the Warrant Term by issuing a press release announcing the reduced warrant term whereupon the 2019 Warrants and 2019 Finder Warrants will expire on the 30[th] calendar day after the date of the press release. The proceeds of the financing will be used for working capital and funding of exploration expenditures on the Company’s exploration properties.

Pursuant to an option agreement entered in November 2017, the Company has acquired a 100% interest in the Cross Hills Iron Oxide Copper Gold Project (the “Cross Hills Project”), on the island portion of Newfoundland and Labrador. The property is comprised of 486 claims covering 12,150 hectares including 90 claims optioned from the property vendor and an additional 396 claims map staked by the Company, including 16 claims staked in May 2019. The option agreement provided Zonte with the option to acquire a 100% interest in the project by making payments of $55,000 and issuing 1.5 million common shares over three years (the “Cross Hills Agreement”) with the final $25,000 payment and 500,000 shares paid in February 2021, subsequent to the Year-end. The claims are subject to a 3% NSR, 2/3rds of which can be purchased for $2,000,000

Zonte holds a 100% interest in the MJ Project. The MJ Project is located in the Tintina Gold Belt in the Yukon Territory and is comprised of 172 claims totaling approximately 3,371 hectares. During June 2019, the Company amended the terms of the McConnells Jest property option agreement (the “MJ Agreement”) wherein it agreed to make a final payment of $25,000 and issue 83,333 common shares in order to acquire a 100% interest in the property. Zonte acquired its 100% interest in the project by issuing a total of 1,583,333 common shares of the Company and making payments of $125,000 between January 2017 and June 2019. The Company completed an initial exploration program on the MJ Project during Fiscal 2018 that included mapping, sampling and approximately 1,000 metres (“m”) of drilling.

Zonte holds a 100% interest in the Wings Point Project (“Wings Point”) located on the island portion of Newfoundland and Labrador, about 30 kilometres (“km”) north of Gander and at the northern end of the central Newfoundland gold belt. During the Period, the Company staked an additional 243 claims covering 6,075 hectares increasing the size of the Wings Point Project to approximately 8,600 hectares and carried out a short six-hole drill program confirming anomalous gold in four of the six holes completed. Newfound Gold is exploring in the southern portion of the belt where it has reported a significant discovery, intersecting 92.9 g/t gold over 19 m and has identified the style of mineralization as being similar to that of the high-grade quartz veins in the Fosterville area of Australia. This analogy opens up the central gold belt in Newfoundland to a new model type. Within the main Wings Point claims, the Company has completed four geophysical grids, with three of them seeing little to no

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

follow-up exploration since completion. Within one of the newly staked areas, historic heavy mineral concentrate from till sampling returned 59.2 g/t and 5.3 g/t gold. The area from which this discovery was made has not been followed up. The 59.2 g/t Au value was the highest Noranda discovered in their +800 sample program which covered a large portion of the newly focused gold trend. Zonte plans to explore, or seek a partner to explore, the Wings Point for both the bulk tonnage and high-grade potential.

During the Period, and throughout fiscal 2019, the Company’s exploration efforts were focused primarily on the Cross Hills Project. At Cross Hills, the Company continues to drill test the Dunns Mountain target. Drill testing at Dunns Mountain was focused on the magnetic and gravity anomaly targets through the centre of the mountain. The high-grade copper, gold and silver intercept in CH-19-04 (0.43m of 15.8 g/t gold, 352 g/t silver and 14.0% copper) and the high-grade silver intercept in CH-20-03 (0.12m of 2048 g/t silver and 1.17% copper) on the eastern side of Dunns Mountain both need follow-up exploration. Drilling through the summer discovered a 1.75m interval with 268.6 g/t Ag in at the southern end of the target area in drill hole CH-20-10. The geochemical nature of this interval is similar to that in CH-20-03 and may represent a second mineralizing system. In addition, this interval is just 350 m north of the Big K target which is being permitted for drilling. The Big K target is defined by a large coincident high-resolution magnetic and gravity anomaly. The target is mainly covered; however, copper mineralization was discovered at the southern end where fracture-controlled mineralization recorded 2.8% copper and 10 g/t silver. During September 2020, the Company completed a large high-resolution airborne magnetic survey that included areas of the property not previously explored. The survey discovered numerous magnetic anomalies and during the last quarter, ground checking resulted in the discovery of surface mineralization coincident with a new target called K9, which sits 1 km south of K8. Surface mineralization was also discovered over the large airborne magnetic anomaly at Nine Mile. A large soil program over many of these targets was carried out over several targets which resulted in anomalies identified at the K7, Nine Mile and Big K targets. Field checking and additional soil sampling will be systematically carried out on other airborne anomalies, as warranted.

In Fiscal 2014, Zonte, in collaboration with strategic partners (together the “Applicants”), made applications for three exploration licenses in Colombia covering areas believed to be highly prospective. The areas were confirmed as open ground on the Government of Colombia’s website and the Applicants’ applications have been confirmed as the first received following commencement of the application process. The applications, made to the Agencia Nacional de Mineria (ANM), were followed up with the required supporting documentation but as of this date have not been issued to the Applicants. One of the applications covers areas located between titles covering the Gramalote Deposit which is understood to be held through a joint venture between AngloGold Ashanti (NYSE:AU) and B2Gold (TSX:BTO, NYSE:BTG). The Applicants have completed various steps required to proceed to “Special Court” in order to challenge the Secretaria de Minas, who has not titled the exploration application submitted by the Applicants in July 2013. As reported in a press release dated February 21, 2017, The Special Court has accepted the Applicant’s case as presented and the case will now proceed through the court process. While the Applicants remain committed to pursuing their rights under the application, the timing and outcome of the Special Court process remains unknown as of this date. Upon receipt of the titles by the Applicants and subject to board and regulatory approvals, Zonte can acquire each of the mineral concessions from the Applicants for a specified number of Zonte common shares.

The Company’s objective remains the identification and acquisition of projects that add value while minimizing dilution and maintaining an attractive equity structure that will benefit shareholders as the Company moves forward.

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

1.3 SELECTED ANNUAL INFORMATION

The following table outlines selected financial information for the years ended January 31, 2021, 2020 and 2019. The financial information is extracted from the Company’s audited financial statements which have been prepared in accordance with IFRS.

All amounts are expressed in thousands of Canadian dollars, except per share amounts:

	Year ended January 31	Year ended January 31
	2021	2020	2019
	$	$	$
Revenue	-	-	-
Net income (loss) and comprehensive income (loss)	86	(157)	(583)
Basic and diluted income (loss) per share	-	-	(0.01)
Working capital (deficiency)	564	1,576	1,456
Total assets	5,040	5,123	3,738
Non-current financial liabilities	1,139	1,064	988

The Company has no producing operations and expects to record losses until such time as an economic resource is identified, developed and exploited on one or more of the Company’s properties or the properties are otherwise disposed of at a profit. The Company’s future operations will depend on its ability to access additional equity financing and future losses and asset values will be significantly impacted by any impairment write-downs or abandonment of any resource properties.

1.4 RESULTS OF OPERATIONS - YEAR ENDED JANUARY 31, 2021

During F-2021, the Company earned net income and comprehensive income of $85,957 an increase of $242,938 over the net loss and comprehensive loss of $156,981 incurred for F-2020 with the increase primarily attributable to Deferred income tax recoveries of $338,049 in F-2021 (F-2020 - $259,114) related to flow-through expenditures incurred during the period as well as Stock based compensation expense of $21,488 in F-2021, a reduction of $185,688, approximately 90%, over Stock based compensation expense of $207,136 in F-2020. The Company has no producing operations and its only revenue was interest income of $15,435 and $20,420 earned in F-2021 and F- 2020, respectively. The Company’s Operating expenses totaled $271,299 in F-2021, a decrease of $169,070, approximately 38%, over F-2020 expenses of $440,369. The material break-down of Operating expenses for the year ended F-2021 and F-2020 is presented in the following table:

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

	31-Jan	31-Jan
	2021	2020
	$	$
Operating expenses:
Management and consulting fees	162,361	132,660
Office & general	2,755	4,294
Transfer agent, listing & filing fees	18,336	31,510
Legal		-
Insurance	9,321	8,623
Communications	4,138	3,291
Investor relations &
shareholder communications	10,697	8,101
Legal & audit	22,594	22,818
Depreciation	8,312	9,303
General exploration and due diligence	4,837	6,995
Part XII.6 Tax	6,500	5,638
Stock based compensation	21,448	207,136
	271,299	440,369

The most significant operating cost expenditures and variances over the prior year are as follows:

• Management and consulting fees of $162,361 represented an increase of $29,701, approximately 22% over management and consulting fees of $132,660 in F-2020 as the Company maintained minimum staff levels and capitalized $94,900 as exploration expense based on the number of management’s days on-site at the Company’s projects during the Period (F-2020 $120,000). Payment of a portion of Management and consulting fees continues to be deferred and included in Due to Related Party balances – see section 1.9 ;

• Office and general costs of $2,755 decreased by $1,539 below expenditures of $4,294 in F-2020, a 36% reduction, while the Company continued to keep discretionary spending to a minimum, including operating out of rent-free premises since October 2013;

• Transfer agent, listing and filing fees of $18,336 decreased by $13,174 or 42% over expenditures of $31,510 in F-2020 when the Company incurred fees arising the 2019 Private Placement;

• Insurance expenditures of $9,321 represented an increase of $698, approximately 8%, above insurance expenditures of $8,623 in F-2020;

• Investor relations and shareholder communications expenditures of $10,697 increased by $2,596, a 32% increase over F-2020 with expenditures primarily related to press releases and meeting materials as the Company maintained a minimum level of discretionary activities while it focused on the exploration programs at Cross Hills and Wings Point;

• Legal and audit expenses of $22,594 in F-2021 represented a reduction of $224, approximately 1%, below F-2020 expenditures of $22,818 as a reduction in legal fees during F-2021 was off-set by an increase in audit fees;

• General exploration and due diligence costs decreased to $4,837 a decrease of $2,158 approximately 31%, below F-2020 expenditures of $6,995 as the Company incurred fewer costs supporting the Applicants Special Court proceedings in connection with their Colombia license applications;

• Part XII.6 tax of $6,500 for F-2021 arose from the December 2019 flow-through financing and represent an increase of $862, approximately 15% over F-2020 Part XII.6 tax of $5,638 arising from the November 2018 flow-through financing; and

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

• Stock options granted in January 2019 and October 2018 resulted in Stock-based compensation expense of $21,448 during F-2021 a decrease of $185,688, approximately 90%, below Stock-based compensation expense of $207,136 during F-2020. All the aforementioned stock options vest over an 18-month period over which the value of the stock options is expensed.

1.5 SUMMARY OF QUARTERLY RESULTS

A summary of quarterly results for the most recent eight quarters is included in the table below. The financial information is extracted from or derived from the Company’s unaudited interim financial statements and conform with IFRS. All amounts are expressed in thousands of Canadian dollars, except per share amounts:

Revenue Net income (loss) Net income (loss) per share - basic and diluted Total assets	Fiscal 2021	Fiscal 2021	Fiscal 2021	Fiscal 2021	Fiscal 2020	Fiscal 2020	Fiscal 2020	Fiscal 2020
	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
	Jan-21 - (73) - $ 5,040 $	Oct-20 - 37 - $ 5,097 $	Jul-20 - 86 - $ 5,224 $	Apr-20 - 36 - $ 5,137 $	Jan-20 - (3) - $ 5,123 $	Oct-19 - 57 - $ 3,649 $	Jul-19 - (119) (0.01) $ 3,587 $	Apr-19 - (92) - $ 3,660 $

As previously noted, the Company has no producing operations and expects to record losses until such time as an economic resource is identified, developed and exploited on one or more of the Company’s properties or the properties are otherwise disposed of at a profit. The Company’s future operations will depend on its ability to access additional equity financing and future quarterly results will be significantly impacted by any impairment write-downs or abandonment of any resource properties as well as the value of stock-based compensation related to the vesting of options in any particular period.

1.6 LIQUIDITY AND CASH FLOWS

On March 11, 2020, the World Health Organization declared a pandemic following the emergence and rapid spread of a novel strain of coronavirus (“COVID-19”). The continued spread of COVID-19 and the actions being taken by governments, businesses and individuals may adversely impact the Company’s operations, including the Company’s ability to raise financing. This has resulted in significant economic uncertainty, of which the potential impact on the Company’s future financial results is difficult to reliably measure.

Liquidity

At January 31, 2021, the Company had cash of $550,141 (January 31, 2020 $1,877,804) including cash with banks and on hand of $460,530 (January 31, 2020 - $84,011) and $89,611 in cashable guaranteed investment certificates (January 31, 2020 - $1,793,793). The Company had working capital of $563,916 as at January 31, 2021 a decrease of $1,012,786 over the Company’s working capital of $1,576,702 at January 31, 2020.

As a mineral exploration company, the Company has no present sources of revenue. During the period, the Company paid its administrative costs, the costs of acquiring exploration properties, and other normal course expenditures, out of the proceeds of the issuance of common shares in previous periods. For the foreseeable future, the Company will remain dependent on the issuance of additional shares to raise funds to continue the exploration on and evaluation of its properties and to fund ongoing operating costs.

Management anticipates that the Company will require additional funds to meet the Company's obligations and budgeted expenditures over the foreseeable future. The anticipated funding shortfall may be met in a number of

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

ways including, but not limited to, the sale of equity or debt securities, further expenditure reductions, asset sales and/or the introduction of joint venture partners. There is, however, no assurance that these sources of funding or initiatives will be available to the Company, or that they will be available on terms which are acceptable to the Company. The ability to raise additional funds through the sale of shares will depend on the state of the gold and other commodity markets and on the state of equity markets in general, as well as the exploration results achieved on the Company’s properties.

Operating Activities

The Company’s cash used in operating activities was $13,815 and $297,394 for F-2021 and F-2020, respectively. During both F-2021 and F-2020, the Company maintained minimum staffing levels and continued its efforts to manage expenditures as explained in the Results of Operations herein. Included in cash used in operating activities are deferrals of related party salaries which provided cash of $79,000 and $80,800 in F-2021 and F-2020, respectively, as well as Accretion of discounted amounts due to related parties which used cash of $3,772 in F-2021 and $3,903 in F-2020 as well as changes in working capital which provided cash of $148,724 during F-2021 and used cash of $154,264 during F-2020.

During the quarter ended January 31, 2021 (“Q4-21”), the Company’s cash used by operating activities was $91,913 compared to $115,282 used in operating activities during the quarter ended January 31, 2020 (“Q4-20”). Included in cash used in operating activities are deferrals of related party salaries which provided cash of $19,750 in each of Q421 and Q4-20 as well as Accretion of discounted amounts due to related parties which used cash of $943 in Q4-21 and provided cash of $11,440 in Q4-20, as well as changes in working capital which used cash of $35,226 during Q4-21 and $112,314 during Q4-20.

Financing Activities

The Company’s financing activities provided cash of $85,625 during F-2021 while in F-2020 financing activities provided cash of $1,447,705. Proceeds from the exercise of Stock options provided $85,265 in F-2021 while the December 2019 Private Placement provided net proceeds of $1,427,386 in F-2020. During F-2020, Government assistance provided $20,368 (F-2021 - $nil). Interest expense of $49 arose from a late payment interest charge in F- 2020 (F-2021 - $nil).

During Q4-21 and Q4-20, the Company’s financing activities provided cash of $80,500 and $1,447,723, respectively, primarily from proceeds of Option exercises in Q4-21 and the December 2019 Private Placements in Q4-20.

Investing Activities

The Company had a net outflow from investing activities of $1,399,473 during F-2021 compared to a net outflow of $1,001,432 in F-2020. The Company incurred expenditures on exploration and evaluation projects of $1,422,806 in F-2021, an increase of $393,922, approximately 38% over expenditures of $1,028,884 in F-2020. Expenditures on Exploration and evaluation expenditures related primarily to exploration on the Cross Hills project during both F- 2021 and F-2020 with approximately 10% of the F-2021 expenditures attributable to exploration on the Wings Point project (F-2020 - $nil). Property and equipment additions used cash of $4,818 in F-2020 (F-2021 - $nil). Interest income was $15,435 and $20,420 in F-2021 and F-2020 respectively.

During Q4-21, the Company had a net outflow from investing activities of $140,718 a decrease of $184,182 over cash outflows from investing activities of $324,900 in Q4-20. The Company incurred expenditures on exploration and evaluation projects of $145,078 in Q4-21 a decrease of $178,968, approximately 55% below expenditures of $324,046 in Q4-20. Property and equipment additions used cash of $4,818 in Q4-20 (Q4-21 - $nil). Interest income was $4,360 and $3,964 in Q4-21 and Q4-20 respectively.

1.7 CAPITAL RESOURCES AND GOING CONCERN

The Company is in the exploration stage and is subject to the risks and challenges similar to other companies in a comparable stage of exploration. The Company's continuing operations and the underlying value and recoverability of the amounts invested in exploration and evaluation assets are dependent upon the existence of economically

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

recoverable mineral reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of its exploration property interests, and on future profitable production or proceeds from the disposition of the exploration property interests. To date, the Company has not earned any revenue.

During F-2021 and Q4-21, the Company incurred a loss before deferred income tax recoveries of $252,092 and $73,213, respectively (F-2020 - $416,095; Q4-20 - $60,025) and as at January 31, 2021 had an accumulated deficit of $4,557,005 (January 31, 2020 - $4,642,962). The Company has no income or cash flows from operations and at January 31, 2021 had working capital of $563,916 (January 31, 2020 - $1,576,702). The ability of the Company to fulfill its commitments, meet its planned business objectives and continue as a going concern is dependent upon the ability of the Company to raise additional financing and upon successful results from its mineral property acquisitions and exploration activities. There is no assurance that these initiatives will be successful.

In June 2019, the Company amended the remaining terms of the MJ Agreement and made a final cash payment of $25,000 and issued 83,333 common shares in order to acquire a 100% interest in the project. In February 2021, subsequent to the Period, the Company issued 500,000 shares of the Company and made a final payment of $25,000 to complete the acquisition of a 100% interest in the Cross Hills Project. The Company now holds a 100% interest in each of the McConnell’s Jest, Cross Hills and Wings Point properties with minimal holding costs to maintain its interests – see section 1.12 Exploration Properties.

1.8 OFF BALANCE SHEET ARRANGEMENTS

The Company is not a party to any off balance sheet arrangements or transactions.

1.9 TRANSACTIONS WITH RELATED PARTIES

Each of the President and Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) have contractually agreed to an interest free long-term deferral of a portion of their salary. The salary deferral component extends to a date to be mutually agreed upon between the CEO, the CFO and the Board of Directors and may be settled through a combination of cash and shares. The salary deferral components owed are considered to be interest-free loans provided to the Company.

Included in amounts due to related parties as at January 31, 2021 is $867,975 (2020 - $812,975) payable to the CEO, related to a long-term deferral agreement and included in long-term liabilities.

Included in amounts due to related parties as at January 31, 2021 is $341,050 (2020 - $317,050) payable to a company controlled by the CFO, including $327,250 (2020 - $303,250) related to a long-term deferral agreement and included in long-term liabilities and $13,800 (2020 - $13,800) related to current amounts due and included in current liabilities.

The amounts subject to the long-term deferral agreement are not expected to be paid during the year ended January 31, 2022. Accordingly, these loans have been re-measured to reflect the fair value resulting in a gain on revaluation of amounts due to related parties, net of accretion expense, in the amount of $3,772 during the year (F-2021 $3,903). The difference between the carrying value and the principal value of amounts due to related parties will be accreted to interest expense over the term of the loans using the effective interest rate method with an implied interest rate of 5%.

1.10 RESULTS OF OPERATIONS – FOURTH QUARTER

During Q4-21, the Company incurred a net loss and comprehensive loss of $73,213 an increase of $70,221 approximately 2,347%, over the net loss and comprehensive loss of $2,992 incurred during Q4-20 with the increase

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

attributable, in part, to Deferred income tax recoveries of $nil in Q4-21, a decrease of $57,033, 100% below Deferred income tax recoveries of $57,033 in Q4-20, both arising from flow-through expenditures incurred during the respective periods. The Company has no producing operations and its only revenue was interest income of $4,360 and $3,964 earned in Q4-21 and Q4-20, respectively. The Company’s Operating expenses totaled $78,516 in Q4-21, an increase of $25,998, approximately 50%, over Q4-20 expenses of $52,518. The material break-down of Operating expenses for the Q4-21 and Q4-20 periods are presented in the following table:

	31-Jan	31-Jan
	2021	2020
	$	$
Operating expenses:
Management and consulting fees	58,295	(13,477)
Office & general	617	1,213
Transfer agent, listing & filing fees	2,344	11,828
Legal	-	-
Insurance	2,521	2,268
Communications	1,007	958
Investor relations &
shareholder communications	3,027	2,053
Legal & audit	8,034	10,696
Depreciation	2,078	2,476
General exploration and due diligence	928	4,361
Part XII.6 Tax	(336)	2,818
Stock based compensation	1	27,324
	78,516	52,518

The most significant operating cost expenditures and variances over the prior year are as follows:

• Management and consulting fees of $58,295 represented an increase of $71,772 over Q4-20 when an adjustment related to previous quarters resulted in a recovery of $13,477. During Q4-21, the Company maintained minimum staff levels and capitalized $10,000 as exploration expense based on the number of management’s days on-site at the Company’s projects (Q4-20 $75,750 including an adjustment of $45,750 related to previous quarters in F-2020). A portion of Management and consulting fees continues to be deferred and is included in Due to Related Party balances – see section 1.9 ;

• Office and general costs of $617 decreased by $596 over expenditures of $1,213 in Q4-20, a 49% reduction, over Q4-20, while the Company continued to keep discretionary spending to a minimum, including operating out of rent-free premises since October 2013;

• Transfer agent, listing and filing fees of $2,344 in Q4-21 represented a decrease of $9,484 or 80% below Q4-20 expenditures of $11,828 when the Company incurred fees related to the 2019 Private Placement;

• Investor relations and shareholder communications expenditures of $3,027 increased by $974, 47% over Q4-20 expenditures of $2,053, as the Company’s level of discretionary investor relations activities remained minimal during the period while, in Q4-20, the Company carried out a discretionary, on-line marketing campaign to increase awareness of the Company’s activities;

• Legal and audit expenses of $8,034 in Q4-21 represented a decrease of $2,662, approximately 25%, below F-2020 expenditures of $10,696 when completion of the 2019 Private Placement resulted in additional expense in the period;

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

• Stock options granted in October 2018 and January 2019 resulted in Stock-based compensation expense of $1 during Q4-21 as compared to $27,324 during Q4-20. All the aforementioned stock options vest over an 18-month period over which the value of the stock options is expensed.

1.11 PROPOSED TRANSACTIONS

The Company continues to evaluate various mineral properties with a view to acquiring a strategic property in an established mining “friendly” jurisdiction.

As discussed previously herein, during F-2014, Zonte identified and, in collaboration with the Applicants, made applications for three exploration licenses in Colombia, covering areas believed to be highly prospective. The areas were confirmed as open ground on the Government of Colombia’s website and the Applicants’ applications were confirmed as the first received following commencement of the application process. The applications, made to the ANM were followed up with the required supporting documentation but as of this date have not been issued to the Applicants. One of the applications covers areas, confirmed by the Company to be open, located between titles covering the Gramalote Deposit which is understood to be held through a joint venture between AngloGold Ashanti (NYSE:AU) and B2Gold (TSX:BTO, NYSE:BTG). The Applicants intend to continue pursuit of appropriate legal remedies and upon receipt of the titles by the Applicants, and subject to board and regulatory approvals, Zonte can acquire each of the mineral concessions from the Applicants for a specified number of Zonte common shares.

1.12 EXPLORATION PROPERTIES

Wings Point

The Wings Point Project (the “Project”) consists of seven mineral exploration licenses covering 344 claims and an area of approximately 8,600 hectares located in the Province of Newfoundland and Labrador in Canada. The Company’s interests in the Project are summarized as follows:

Name Wings Point North Wings Point Extension Wings Point East	Claims 30 111 203	Hectares 750 2,775 5,075	Ownership interest
			Direct Direct Direct

The Company acquired a 100% interest in the Wings Point North claims pursuant to an option agreement entered into in December 2010 and amended on October 8, 2013 and June 27, 2014 (the "Wings Point North Option"). The Wings Point North claims are covered by Newfoundland Exploration License 016270M which consists of 30 Mineral Exploration claims covering 750 hectares and are subject to a 3% Net Smelter Royalty ("NSR") on production from the Wings Point North License, two-thirds of which can be bought back by the Company for $2,000,000.

Pursuant to the Wings Point North Option agreement, if the Company is able to identify one million ounces of gold, in the Measured and Indicated categories of a NI 43-101report, within the Wings Point North License, an additional 300,000 common shares of the Company will be issued and $6,638 finders' fees will be paid and if the Company is able to identify two million ounces of gold, in the Measured and Indicated categories of a NI 43-101 report, within the Wings Point North License, an additional 400,000 common shares of the Company will be issued and $8,850 finders' fees will be paid.

The Wings Point Extension, including an additional 40 claims staked in May 2020, was staked by the Company and is not subject to the NSR arising from the Wings Point North Option Agreement. Similarly, Wings Point East was staked by the Company in August 2020 and is also not subject to the NSR arising from the Wings Point North Option Agreement.

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

The Company completed a 6-hole drill program at Wings Point during May 2020 designed to test portions of the Eastern Anomaly and Western Anomaly geophysical targets. Drill results confirmed anomalous gold in four of the six drill holes within several narrow intervals. The drill program was confined to a small section of the targets and both the Eastern and Western Anomalies remain open along strike and to depth, particularly for the Western target which is 1.6 km. long. The Company also acquired by staking an additional 203 claims, including 43 claims where Noranda Exploration discovered high-grade gold in till samples. One of the samples collected by Noranda returned 59.2 g/t gold and the area has not been subject to much modern exploration.

McConnell’s Jest Project

The McConnell's Jest Project ("MJ Project") is located in the Yukon Territory about 65 km northeast of the town of Mayo and is comprised of 172 contiguous quartz claims (2019 – 172) covering approximately 3,371 hectares (2019 – 3,371). In June 2019, the Company amended the remaining terms of the MJ Option Agreement and made a final cash payment of $25,000 and issued 83,333 common shares in order to acquire a 100% interest in the project. The following are the amended terms pursuant to which the Company acquired its 100% interest:

• Making aggregate cash payments of $125,000;

• Issuing 1,583,333 common shares of the Company; and

• Paying a 3% NSR on production from the MJ Project, two-thirds of which can be bought back by the Company for $2,000,000.

The MJ Option Agreement was subject to a 10% Finder's Fee of which 10% was payable in cash and 90% in common shares. A total of $1,250 and 217,318 common shares were paid to the Finder.

During April 2017, the Company filed the initial National Instrument 43-101 Technical Report for the MJ Project. The Report titled “Geology, Mineralization, Geochemical Survey, and Environmental Survey on the McConnells Jest Intrusion-Related Gold Property”, was completed by Andy Randell, P.Geo who is the qualified person as defined by NI 43-101 and is responsible for the preparation of the Report and the technical disclosures therein. The report is available on www.sedar.com.

At the MJ Project in the Yukon Territory, an initial five-hole Phase 1 drill program was completed in July 2017. The results showed a discovery at the Two-Four target where drill hole MJ-04 interested mineralization in two distinct zones, at the top and bottom of the core including; 20.44 m of 0.72 g/t Au and 20.28m of 0.69 g/t Au, respectively (see October 6, 2017 press release). Mineralization is characterized by parallel quartz veining hosting arsenopyrite +/- pyrite within a granodorite.

The target type at the MJ Project is an Intrusion Related Gold System (IRGS) where mineralization is characterized by vertically parallel gold bearing veins which form a low-grade, high-tonnage target. The project is adjacent to the Dublin Gulch Project of Victoria Gold (VIT-V) where construction of the Eagle Mine is in progress and expected to be in production during the second half of 2019. The Eagle Deposit hosts a mineral reserve of 2.66M ounces of gold at 0.67 g/t Au and is characterized as an IRG System (Victoria Gold’s webpage). Zonte’s MJ Project is similar in age, geology, structural profile and geochemistry to Victoria Gold’s Dublin Gulch project. A well known IRGS is being mined at the Fort Knox deposit in Alaska which is owned by Kinross Gold (K-TSX) and has been in production since 1996. As of December 31, 2014, it still contained a Proven and Probable Mineral Reserve of 2.398M ounces contained within 163.8 Mt at 0.46 g/t Au with cut off grades between 0.19 and 0.35 g/t Au (Kinross’s webpage). The McConnell’s Jest project is an early stage exploration project and currently there’s sufficient evidence to indicate mineralization hosted on the Company’s property is similar to that hosted by either the Dublin Gulch or Fort Knox deposits.

Cross Hills Project

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

The Cross Hills Project (“Cross Hills”) is located on the island portion of Newfoundland and Labrador, approximately 20 kilometres from the town of Terrenceville and is comprised of 486 claims covering approximately 12,150 hectares, including 90 claims optioned from the property vendor and 396 claims staked by the Company. The Company acquired a 100% interest in the Project pursuant to an option agreement (“the Cross Hill Agreement”) by:

• Making aggregate cash payments of $55,000 over a three-year period of which, the final $25,000 was paid, subsequent to year-end, in February 2021;

• Issuing 1,500,000 common shares of the Company over a three-year period of which, the final 500,000 common shares were issued, subsequent to year-end, in February 2021; and

• Granting a 3% NSR on production from the Cross Hills Project, two-thirds of which can be bought back by the Company for $2,000,000.

Cross Hills hosts an Iron Oxide Copper Gold system (IOCG) covering 25km along a regional structure break called the Cross Hills lineament. Geologically the area is underlain by series of intrusives, volcanics and sediments. Historical exploration programs were limited; however, the data set provides a solid base to work from. Among the compiled data sets is a previous geophysical interpretation of Geological Survey airborne surveys which highlighted five targets that need detailed ground follow up. In addition, since acquiring the project, Zonte was successful in identifying alteration patterns within the IOCG system as well as confirming a newly discovered large albitite breccia not previously known to exist on the Property.

Drilling during Phase 2 at the Cross Hills IOCG project was carried out through the winter through to the end of September 2020. Phase 2 built upon the results of Phase 1 where CH-19-04 intersected a number of copper intervals at Dunns including 14.0% Cu, 15.8 g/t Au and 352 g/t Ag over a 0.43m interval within a larger 2.76m interval which averaged 2.89% Cu, 2.65 g/t Au and 73.3 g/t Ag (see press release dated April 23, 2019). Numerous drill holes intersected copper mineralization through Phase 1 and 2 pointing to a copper bearing IOCG belt. Of note, a number of drill holes intersected copper, lead and zinc mineralization and long intervals of fracture controlled mineralization which is often associated with the periphery of IOCC deposits. Drill Hole CH-20-10, which was drilled at the southern end of the target area intersected long intervals of anomalous copper mineralization with the notable difference that the mineralization was discovered in the rock mass as stringer and disseminated mineralization. This drill hole intersected a 1.75m interval of 268.6 g/t Ag. This silver discovery may represent a second distinct mineralizing pulse as geochemically it is similar to the narrow high-grade silver zone discovered in CH-20-03 where a 0.12m zone returned 2048 g/t Ag. These drill holes are several hundred metres apart and neither has been followed upon to date. The high-grade interval in CH-19-04 was not explained during this phase of drilling although one drill hole which drilled to test the depth extension did intersect elevated copper, gold and silver. In IOCG systems, such as NICO in northern Canada, similar high-grade zones have been noted up to several kilometers away from the deposit. A maiden two drill holes were also completed at the K7 target with identified anomalous copper and rare early elements. The K7 target is 16km south of Dunns Mountain and was discovered through magnetic and gravity surveys. The area is covered in soils for the most part with limited outcrop exposure. The Company also completed a large airborne high-resolution magnetic survey to identify other areas of interest. The survey identified numerous anomalies and ground checking will continue to examine each of them. The magnetic anomalies will be checked for IOCG alteration first, then prospecting to determine if any surface mineralization is associated with the anomalies, following which a decision to advance the areas with additional exploration will be made.

Exploration Property Expenditures

The Company’s Exploration property expenditures for the periods ended January 31, 2021 and January 31, 2020 are summarized below:

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

	Wings Point McConnel's Jest Cross Hill Total $ $ $
Beginning balance, February 1, 2019 Additions during the period: Acquisition costs Assays & analysis Consulting fees Drilling Exploration support Field supplies Geophysics Transportation & travel Refund of Security Deposits Mineral Incentive Program - Junior Exploration Assistance	415,491 1,061,812 429,638 1,906,941 3,558 48,489 18,290 70,337 19,965 4,300 51,514 75,779 - - 64,390 64,390 - - 420,378 420,378 6,983 1,066 320,953 329,002 - - 30,071 30,071 700 - 127,481 128,181 - - 81,849 81,849
	31,206 53,855 1,114,926 1,199,987 - - (11,850) (11,850) - - (103,168) (103,168)
	31,206 53,855 999,908 1,084,969
Endingbalance,January31,2020	446,697 1,115,667 1,429,546 2,991,910
Beginning balance, February 1, 2020 Additions during the period: Acquisition costs Assays & analysis Consulting fees Drilling Exploration support Field supplies Geophysics Transportation & travel Refund of Security Deposits	446,697 1,115,667 1,429,546 2,991,910 15,795 - 126,000 141,795 11,543 297 106,065 117,905 - - 47,318 47,318 87,525 - 508,460 595,985 28,512 - 329,538 358,050 605 1,105 17,606 19,316 - - 56,360 56,360 1,660 - 84,417 86,077
	145,640 1,402 1,275,764 1,422,806 - - (7,450) (7,450)
	145,640 1,402 1,268,314 1,415,356
Endingbalance,January31,2021	592,337 1,117,069 2,697,860 4,407,266

1.13 NEW ACCOUNTING STANDARDS NOT YET ADOPTED

On January 23, 2020, the IASB issued an amendment to IAS 1 Presentation of Financial Statements providing a more general approach to the classification of liabilities. The amendment clarifies that the classification of liabilities as current or non current depends on the rights existing at the end of the reporting period as opposed to the expectations of exercising the right for settlement of the liability. The amendments further clarify that settlement refers to the transfer of cash, equity instruments, other assets, or services to the counterparty. The amendments are effective for annual periods beginning on or after January 1, 2023 and are to be applied retrospectively, with early adoption permitted. The Company is currently assessing the financial impact of the amendments and expects to apply the amendments at the effective date.

1.14 FINANCIAL INSTRUMENTS AND RISK FACTORS

Market risk

(i) Foreign exchange risk

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

The Company is not exposed to foreign exchange risk at this time.

(ii) Interest rate risk

The Company’s accounts payable and accrued liabilities are non-interest bearing and have contractual maturities of 30 days or less. As at January 31, 2021, the Company’s interest-bearing assets are cash equivalents. The Company’s cash equivalents are cashable Guaranteed Investment Certificates (“GICs”) that earn interest at prevailing short-term interest rates and are reinvested as they mature. During F-2021, the Company earned interest income of $15,435 (F-2020 – $20,420). A plus or minus 1% change in interest rate would not have a material impact on the Company’s statement of loss and comprehensive loss.

(iii) Price risk

The Company is not exposed to any direct price risk other than that associated with commodities and how fluctuations impact companies in the mineral exploration and mining industries as the Company has no significant revenues.

Credit risk

Credit risk is the risk that a customer or third party to a financial instrument fails to meet its commercial obligations.

The carrying amount of financial assets represents the maximum credit exposure. The Company manages credit risk by holding the majority of its cash and cash equivalents with AA rated banks in Canada, where management believes the risk of loss to be low.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due.

The Company manages liquidity risk by maintaining sufficient cash and cash equivalent balances, raised through equity financings, to meet liabilities when due. As at January 31, 2021, the Company had cash and cash equivalents of $550,141 (January 31, 2020 - $1,877,804) available to settle current liabilities of $44,947 (January 31, 2020 - $522,647).

Fair value

The recorded value of the Company’s financial assets and liabilities approximate their fair values due to their demand nature and their short term to maturity.

1.15 SHARE CAPITAL

a) Common Shares

The Company has authorized an unlimited number of common shares without par value.

At January 31, 2021, the Company had issued and outstanding 58,784,961 common shares with a recorded value of $6,778,584. At May 20, 2021, the Company had issued and outstanding 59,284,961 common shares with a recorded value of $6,878,584 following the issuance of 500,000 common share of the Company on February 11, 2021 pursuant to the Cross Hills Agreement.

b) Warrants

At January 31 and May 20, 2021, the Company had 878,485 warrants issued and outstanding with an exercise price of $0.35 and an expiration date of June 20, 2021. If the closing share price of the Company’s common shares on the TSX Venture Exchange is greater than $0.50 per common share for a period of 20 consecutive trading days at any time during the warrant term, the Company may accelerate the expiry date of the warrant term by issuing a press release announcing the reduced warrant term whereupon warrants will expire on the 30[th] calendar day after the date of the press release.

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

c) Stock Options

At January 31 and May 20, 2021, the Company had 3,080,000 stock options outstanding, exercisable into common shares of the Company at an average exercise price of $0.26 per share, expiring between February 2022 and January 2024.

1.16 RISKS & UNCERTAINITIES

The following are certain factors relating to the business of the Company and are not the only risks and uncertainties facing the Company. Additional risk and uncertainties not currently known to the Company, or that the Company deems immaterial, may also impair the operations of the Company. If any such risks actually occur, the financial condition, liquidity and results of operations of the Company could be materially adversely affected and the ability of the Company to implement its growth plans could be adversely affected.

The following is a description of certain risks and uncertainties that may affect the business of the Company.

Limited Operating History

The Company is a relatively new company with limited operating history and no history of business or mining operations, revenue generation or production history. The Company was incorporated in July 2009 and has yet to generate a profit from its activities. The Company will be subject to all of the business risks and uncertainties associated with any new business enterprise, including the risk that it will not achieve its growth objective. The Company anticipates that it may take several years to achieve positive cash flow from operations.

Exploration and Development Risks

The exploration for and development of minerals involves significant risks, which even a combination of careful evaluation, experience and knowledge may not eliminate. Few properties which are explored are ultimately developed into producing mines. There can be no guarantee that the estimates of quantities and qualities of minerals disclosed will be economically recoverable. With all mining operations there is uncertainty and, therefore, risk associated with operating parameters and costs resulting from the scaling up of extraction methods tested in pilot conditions. Mineral exploration is speculative in nature and there can be no assurance that any minerals discovered will result in an increase in the Company’s resource base.

Substantial Capital Requirements and Liquidity

Substantial additional funds for the establishment of the Company’s current and planned exploration and development programs will be required. No assurances can be given that the Company will be able to raise the additional funding that may be required for such activities, should such funding not be fully generated from operations. Mineral prices, environmental rehabilitation or restitution, revenues, taxes, transportation costs, capital expenditures, operating expenses and geological results are all factors which will have an impact on the amount of additional capital that may be required. To meet such funding requirements, the Company may be required to undertake additional equity financing, which would be dilutive to shareholders. Debt financing, if available, may also involve restrictions on financing and operating activities. There is no assurance that additional financing will be available on terms acceptable to the Company or at all. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its exploration and development programs.

Fluctuating Mineral Prices

The economics of mineral exploration is affected by many factors beyond the Company’s control, including changing production costs, the supply and demand for minerals, the rate of inflation, the inventory of mineral producing Companies, the international economic and political environment, changes in international investment patterns, global or regional consumption patterns, costs of substitutes, currency availability and exchange rates, interest rates, speculative activities in connection with minerals, and increased production due to improved mining and production methods. The metals industry in general is intensely competitive and there is no assurance that, even if commercial quantities and qualities of metals are discovered, a market will exist for the profitable sale of such metals.

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

Commercial viability of precious and base metals and other mineral deposits may be affected by other factors that are beyond the Company’s control including particular attributes of the deposit such as its size, quantity and quality, the cost of mining and processing, proximity to infrastructure and the availability of transportation and sources of energy, financing, government legislation and regulations including those relating to prices, taxes, royalties, land tenure, land use, import and export restrictions, exchange controls, restrictions on production, as well as environmental protection. It is impossible to assess with certainty the impact of various factors which may affect commercial viability so that any adverse combination of such factors may result in the Company not receiving an adequate return on invested capital.

Regulatory Requirements

The current or future operations of the Company require permits from various governmental authorities, and such operations are and will be governed by laws and regulations governing exploration, development, production, taxes, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, site safety and other matters. Companies engaged in the exploration and development of mineral properties generally experience increased costs and delays in development and other schedules as a result of the need to comply with applicable laws, regulations and permits. There can be no assurance that all permits which the Company may require for the facilities and conduct of exploration and development operations will be obtainable on reasonable terms or that such laws and regulation would not have an adverse effect on any exploration and development project which the Company might undertake.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions.

Parties engaged in exploration and development operations may be required to compensate those suffering loss or damage by reason of the exploration and development activities and may have civil or criminal fines or penalties imposed upon them for violation of applicable laws or regulations. Amendments to current laws, regulation and permits governing operations and activities of mineral companies, or more stringent implementation thereof, could have a material adverse impact on the Company and cause increases in capital expenditures or exploration and development costs or require abandonment or delays in the development of new properties.

Financing Risks and Dilution to Shareholders

The Company has limited financial resources and no revenues. If the Company’s exploration program on its exploration properties is successful, additional funds will be required for the purposes of further exploration and development. There can be no assurance that the Company will be able to obtain adequate financing in the future or that such financing will be available on favourable terms or at all. It is likely such additional capital will be raised through the issuance of additional equity, which will result in dilution to the Company’s shareholders.

Title to Properties

Acquisition of title to mineral properties is a very detailed and time-consuming process. Title to, and the area of, mineral properties may be disputed. The Company cannot give an assurance that title to its exploration properties will not be challenged or impugned. Mineral properties sometimes contain claims or transfer histories that examiners cannot verify. A successful claim that the Company does not have title to its exploration properties could cause the Company to lose any rights to explore, develop and mine any minerals on that property, without compensation for its prior expenditures relating to such property.

Requirement for Permits and Licenses

A substantial number of permits and licenses will be required to conduct an exploration and development program, such licenses and permits may be difficult to obtain and may be subject to changes in regulations and in various operational circumstances. It is uncertain whether the Company will be able to obtain all such licenses and permits.

Competition

There is competition within the mining industry for the discovery and acquisition of properties considered to have commercial potential. The Company competes with other mining companies, many of which have greater financial, technical and other resources than the Company, for, among other things, the acquisition of minerals claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees and other personnel.

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

Reliance on Management and Dependence on Key Personnel

The success of the Company will be largely dependent upon on the performance of its directors and officers and the ability to attract and retain key personnel. The loss of the services of these persons may have a material adverse effect on the Company’s business and prospects. The Company will compete with numerous other companies for the recruitment and retention of qualified employees and contractors. There is no assurance that the Company can maintain the service of its directors and officers or other qualified personnel required to operate its business. Failure to do so could have a material adverse effect on the Company and its prospects.

No Mineral Reserves or Mineral Resources

There have been no mineral reserve or mineral resource estimates prepared in respect of the Property to which the Company holds title. Mineral reserves are, in the large part, estimates and no assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated level of recovery will be realized. Reserve estimates for properties that have not yet commenced production may require revision based on actual production experience. Market price fluctuations of metals, as well as increased production costs or reduced recovery rates, may render mineral reserves containing relatively lower grades of mineralization uneconomic and may ultimately result in a restatement of reserves. Moreover, short-term operating factors relating to the mineral reserves, such as the need for orderly development of the ore bodies and the processing of new or different mineral grades, may cause a mining operation to be unprofitable in any particular accounting period.

Environmental Risks

The Company’s exploration and appraisal programs will, in general, be subject to approval by regulatory bodies. Additionally, all phases of the mining business present environmental risks and hazards and are subject to environmental regulation pursuant to a variety of international conventions and federal, provincial and municipal laws and regulations. Environmental legislation provides for, among other things, restrictions and prohibitions on spills, releases or emissions of various substances produced in association with mining operations. The legislation also requires that wells and facility sites be operated, maintained, abandoned and reclaimed to the satisfaction of applicable regulatory authorities. Compliance with such legislation can require significant expenditures and a breach may result in the imposition of fines and penalties, some of which may be material. Environmental legislation is evolving in a manner expected to result in stricter standards and enforcement, larger fines and liability and potentially increased capital expenditures and operating costs.

Governmental Regulations and Processing Licenses and Permits

The activities of the Company are subject to Canadian and provincial approvals, various laws governing prospecting, development, land resumptions, production taxes, labour standards and occupational health, mine safety, toxic substances and other matters. Although the Company believes that its activities are currently carried out in accordance with all applicable rules and regulations, no assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could limit or curtail production or development. Amendments to current laws and regulations governing operations and activities of exploration and mining, or more stringent implementation thereof, could have a material adverse impact on the business, operations and financial performance of the Company. Further, the mining licenses and permits issued in respect of its projects may be subject to conditions which, if not satisfied, may lead to the revocation of such licenses. In the event of revocation, the value of the Company’s investments in such projects may decline.

Local Resident Concerns

Apart from ordinary environmental issues, work on, or the development and mining of the Property could be subject to resistance from local residents that could either prevent or delay exploration and development of the Property.

Conflicts of Interest

Certain of the directors and officers of the Company are engaged in, and will continue to engage in, other business activities on their own behalf and on behalf of other companies (including mineral resource companies) and, as a result of these and other activities, such directors and officers of the Company may become subject to conflicts of interest.

Uninsurable Risks

Zonte Metals Inc. Management Discussion & Analysis For the year ended January 31, 2021

Exploration, development and production operations on mineral properties involve numerous risks, including unexpected or unusual geological operating conditions, rock bursts, cave-ins, fires, floods, earthquakes and other environmental occurrences. It is not always possible to obtain insurance against all such risks and the Company may decide not to insure against certain risks as a result of high premiums or other reasons. Should such liabilities arise, they could have an adverse impact on the Company’s results of operations and financial condition and could cause a decline in the value of the Company’s shares. The Company does not intend to maintain insurance against environmental risks.

Litigation

The Company and/or its directors may be subject to a variety of civil or other legal proceedings, with or without merit.

COVID-19

On March 11, 2020, the World Health Organization declared a pandemic following the emergence and rapid spread of a novel strain of coronavirus (“COVID-19”). The continued spread of COVID-19 and the actions being taken by governments, businesses and individuals may adversely impact the Company’s operations, including the Company’s ability to raise financing. This has resulted in significant economic uncertainty, of which the potential impact on the Company’s future financial results is difficult to reliably measure.

1.17 OTHER INFORMATION

Additional information regarding the Company is available on SEDAR at www.sedar.com and on the Company’s website at www.zontemetals.com.