Ascot Resources : MD&A for the years ended Dec 31, 2021 and 2020

Ascot Resources Ltd.

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the year ended December 31, 2021 (Expressed in thousands of Canadian dollars, except where indicated)

Report date: March 21, 2022

Ascot Resources Ltd

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the year ended December 31, 2021

(Expressed in thousands of Canadian dollars, except where indicated)

This Management's Discussion and Analysis ("MD&A") of Ascot Resources Ltd. ("Ascot" or the "Company") is dated March 21, 2022 and provides an analysis of our audited financial results for the year ended December 31, 2021 compared to the year ended December 31, 2020. The following information should be read in conjunction with the Company's audited consolidated financial statements and the related notes for the year ended December 31, 2021, which were prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS"). Unless otherwise noted, all currency amounts are expressed in thousands of Canadian dollars. Additional information about the Company, including the audited financial statements and the notes thereto, for the year ended December 31, 2021, prepared in accordance with IFRS, can be found on SEDAR at www.sedar.comand on the Company's website at www.ascotgold.com.

DESCRIPTION OF THE BUSINESS

Ascot is a Canadian-based development and exploration company publicly traded on the Toronto Stock Exchange (the "TSX") in Canada (symbol AOT). The Company is also trading on the OTCQX market in the U.S. (symbol: AOTVF). The Company is focused on re-starting the historic past producing Premier gold mine located in British Columbia's Golden Triangle. The Company filed its feasibility study in May 2020 for its 100% owned Premier and Red Mountain Gold Projects which will supply gold and silver ores to the process plant. The study supports robust economics including base case After- tax NPV5% of C$341 million and IRR 51% (based on US$1400/oz gold price, $17/oz silver price and CAD to US exchange rate of 0.76.) Ascot received the Mines Act Permit to re-start Premier Gold Project in December 2021.The Silver Coin, Big Missouri, and Premier deposits, collectively being named the Premier Gold Project (PGP) are located near the processing facility on the historical Premier Mine site, and the Red Mountain Project (RMP) is located 23 km to the southeast in an adjacent valley. PGP together with RMP is defined as the "Project". In addition, the Company continues to drill a number of gold-silver discoveries on its 25,000 hectares of mineral concessions that benefit from their proximity to PGP and the towns of Stewart, BC and Hyder, Alaska.

The Company also has two other properties: Swamp Point, an aggregate mine in care and maintenance located in British Columbia on the Portland Canal, and Mt. Margaret, a porphyry copper-molybdenum-gold-silver deposit located in Washington State, USA.

2021 AND RECENT HIGHLIGHTS

• On March 8, 2022, the Company closed a previously announced bought deal financing (the "Offering") for total gross proceeds of $64,241. The net proceeds from the Offering will be used for capital costs at PGP, for PGP's exploration program and for general corporate purposes (see "PGP and RMP project development").
• On January 25, 2022, the Company provided an update on PGP with respect to progress to date and development plans in 2022. The update included a detailed project schedule and an updated capital cost estimate for PGP. Building on the success of the Early Works program in 2021, Ascot remains on track to commence full-scale construction activities and underground development in April 2022, with first gold pour targeted for the first quarter of 2023. With the Mines Act Permit Amendment ("MAPA") in hand and a more definitive project schedule, Ascot reported an updated project capital estimate of $224,000, reflecting an increase of 27% over the previous (March 2021) project capital estimate (see "PGP and RMP project development").
• On December 4, 2021, the Company received the MAPA for construction and operation of PGP and on January 24, 2022, Environmental Management Act ("EMA") Permit was also received, completing the Joint MA/EMA Permit for PGP.
• On July 19, 2021, the Company announced the signing of an updated Benefits Agreement with Nisga'a Nation, which encompassed both PGP and RMP. The updated Benefits Agreement replaced the former agreement which had only pertained to RMP. The comprehensive Benefits Agreement set the basis for the long-term success of the Project and how it will benefit Nisga'a Nation, its citizens and businesses as well as the shareholders and stakeholders of Ascot.
• On June 7, 2021, the Company closed a non-brokered private placement of 2,651,796 flow-through shares (the "Flow-Through Shares") at an average price of $1.42 per Flow-Through Share for gross proceeds of $3,765.

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Ascot Resources Ltd

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the year ended December 31, 2021

(Expressed in thousands of Canadian dollars, except where indicated)

• The Company commenced its 2021 exploration program at PGP in May. Exploration drill holes discovered previously unknown hydrothermal mineralization to the west of the Premier deposit, extended gold mineralization at the Day Zone at Big Missouri approximately 400 metres to the south and intercepted high-grade gold in two exploration holes at the Sebakwe zone north of the Premier deposit. Additional drilling targeted areas of early planned stopes at the Big Missouri deposit and intercepted gold mineralization at or near the expected elevation of the targeted stopes providing additional information regarding geometry, orientation and grade of the early mining areas. Drill results were announced between July 2021 and February 2022 (see "2021 Exploration Program" below).
• On April 20, 2021, the Company closed a bought deal private placement. A total of 24,000,000 common shares of the Company were sold at a price of $0.86 per common share for gross proceeds of $20,640. The proceeds will be used to fund the construction of PGP as well as for working capital and general corporate purposes.
• On April 9, 2021, the Company closed a bought deal financing. A total of 70,700,000 common shares of the Company were sold at a price of $0.86 per common share for gross proceeds of $60,802. The proceeds will be used to fund the construction of PGP and for general working capital purposes. This bought deal financing met the minimum equity raise requirement in the credit agreement of the Company's credit facilities.
• On March 18, 2021, the Company provided an update on permitting, engineering and exploration of PGP. During the Basic Engineering studies, the project team focused on reducing operating risk by upgrading components of the grinding area and associated electrical requirements. In addition, cost inflation related to steel prices and indirect costs also increased the initial capital estimate. This has resulted in a revised estimate for the initial capital which was approximately 20% higher than the initial capital estimate in the feasibility study published in May 2020 or a total of $176,000.

2021 OPERATING OVERVIEW

Premier Gold Project ("PGP")

The PGP comprises four claim groups, identified as the Premier, Big Missouri, Dilworth, and Silver Coin groups, and includes three mining leases, totaling 392 hectares, 175 Crown grants totaling 2,354 hectares, and 107 mineral claims totaling 8,907.1 hectares. The total area is 8,133 hectares when overlaps are accounted for. The Company owns three mining leases, two of which expire on December 17, 2050, and the third, which expires on December 14, 2048.

Since October 2017, the Company has been focusing on identifying and developing high-grade underground resources, engineering, permitting and environmental studies to restart the mill facility. In February 2020, the Company published an updated independent National Instrument 43-101 ("NI 43-101") mineral resource estimate for the PGP which increased indicated resources by 60%. The updated NI 43-101 resource estimate for the PGP reported 1.1 million ounces of gold and

4.7 million ounces of silver in the indicated category, and 1.2 million ounces of gold and 4.67 million ounces of silver in the inferred category. PGP mineral reserves established in the feasibility study in accordance with NI 43-101 technical report published in May 2020 are as follows:

PGP Mineral Reserve Statement

Notes for Table: CIM Definition Standards were followed for classification of Mineral Reserves

1. A mean bulk density of 2.85 t/m³ is used for Premier and of 2.80 t/m³ for all other deposit areas
2. The AuEq values were calculated using US$1,400/oz Au and a US$17/oz Ag and the following equation: AuEq(g/t) = Au(g/t)+ Ag(g/t) x 17 / 1,400
3. The following CoG based on AuEq grade were used to estimate the economic potential of the stopes: Longhole = 2.85 g/t, Inclined undercut Longhole = 3.44 g/t, cut and fill = 3.44 g/t, room & pillar = 3.82 g/t and development = 2.85 g/t

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Ascot Resources Ltd

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the year ended December 31, 2021

(Expressed in thousands of Canadian dollars, except where indicated)

Red Mountain Project ("RMP")

The RMP consists of 47 contiguous mineral claims for a total of 17,125 hectares. It is located approximately 18 km east- northeast of the town of Stewart and within Nisga'a Nation traditional territory. RMP mineral reserves established in the feasibility study in accordance with NI 43-101 technical report published in May 2020 are as follows:

RMP Mineral Reserve Statement

		Grade	Contained Ounces
	Tonnes	Au	Ag	Au	Ag
	kt	g/t	g/t	koz	koz
Proven	2,194	6.68	21.7	471	1,530
Probable	351	5.51	13.8	62	155
Total Proven and Probable	2545	6.52	20.6	534	1685

Notes for Table: CIM Definition Standards were followed for classification of Mineral Reserves

1. The AuEq values were calculated using US$1,300/oz Au and a US$15/oz Ag and the following equation: AuEq(g/t) = Au(g/t) + Ag(g/t) x 15 / 1,300
2. The following CoG based on AuEq grade were used to estimate the economic potential of the stopes: Longhole = 3.11 g/t, Inclined undercut Longhole = 4.0 g/t, cut and fill = 4.1 g/t and development = 3.11 g/t

Qualified Persons and NI 43-101 Disclosure

John Kiernan, P.Eng., Chief Operating Officer of the Company is the Company's Qualified Person (QP) as defined by National Instrument 43-101 and has reviewed, approved and takes responsibility for all of the written scientific and technical disclosure of this MD&A.

On August 28, 2018, the Red Mountain Project was referred by the BC EAO to the Minister of Energy, Mines and Petroleum Resources and the Minister of Environment for consideration and granted an Environmental Assessment Certificate on October 5, 2018.

RMP was subject to a gold metal stream whereby Seabridge Gold Inc. ("Seabridge") could acquire up to 10% of the annual gold production from the RMP at a cost of US$1,000/oz up to a maximum of 500,000 oz produced. Alternatively, Seabridge could elect to receive a one-time cash payment of $4 million at the commencement of production in exchange for a buy- back of the gold metal stream. On April 29, 2021, Sprott Private Resource Streaming and Royalty (B) Corp. ("SRSR") entered into a purchase agreement with Seabridge to acquire the gold metal stream, production payment and put option on RMP. Concurrently, Seabridge security on RMP was transferred to SRSR. Since all of the rights and obligations on the Seabridge option agreement were met, the option agreement between IDM Mining Ltd. (IDM), Ascot's wholly-owned subsidiary, and Seabridge was terminated. The Company and SRSR entered into an "Amended and Restated Metal Stream Agreement" to amend the Metal Stream price to the lower of US$1,000/oz or spot price. All other terms remain the same.

PGP and RMP project development

On April 15, 2020, the Company announced robust results in a feasibility study combining both the PGP and RMP projects with an after-tax IRR of 51% and NPV5% of $341,000 (based on US$1,400/oz gold price, US$17/oz silver price and CAD to US exchange rate of 0.76).

On July 15, 2021, the Company and Nisga'a Lisims Government (NLG) entered into an updated Benefits Agreement (the "Agreement") which now encompasses both PGP and RMP. The updated Agreement replaces the former which only pertained to RMP. The comprehensive Agreement sets the basis for the long-term success of the Projects and how they will benefit Nisga'a Nation, its citizens, and businesses as well as the shareholders and stakeholders of Ascot. Nisga'a Nation has rights and interests as defined by the Nisga'a Final Agreement with Canada and British Columbia, encompassing the entirety of the Project. Under the terms of the Agreement, Nisga'a Nation will provide ongoing support and continued

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Ascot Resources Ltd

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the year ended December 31, 2021

(Expressed in thousands of Canadian dollars, except where indicated)

consultation for the development and future operations of underground gold mines at the Project, emphasizing respect for the land, protection of the environment, and understanding of cultural use and knowledge as well as health and safety, on and off the worksite. Nisga'a Nation will participate in the economic benefits of the Projects, particularly through training, employment, business opportunities and cash payments during development and operations.

In March of 2021, before starting pre-construction activities, the Company announced a project capital cost estimate for the Project of $176,000, which is approximately 20% higher than the initial capital estimate in the feasibility study published in May 2020. The increases were mainly related to upgrading components of the grinding area and associated electrical requirements to reduce operating risks. In addition, cost inflation related to steel prices and indirect costs also increased our initial capital estimate. Subsequently, the Company advanced detailed engineering on the mill foundation, tailings storage facility, water treatment plant, power substation, overland piping and pumping and other key areas at the project site as well as procurement of critical long lead time equipment required in the refurbishment of the Premier mill. As of to date, the Company progressed detailed engineering to ~70% completion overall. Throughout 2021 and early 2022, the Company delivered and made significant progress on installation of a number of critical long lead time equipment items, including the Ball and SAG mills, mill motors and liners, water treatment clarifier and the tailings thickener. The Ball and SAG mills were delivered to the project site in Q3 2021. Ascot has ordered approximately 87% of the remaining fixed equipment for the project. Key orders remaining in the plant relate mostly to piping, instrumentation, and bulk consumables. A temporary construction camp with a total capacity of approximately 170 people was also installed adjacent to the mill building. In Q4 2021, the Company entered into an agreement with JDS Energy & Mining Inc. ("JDS") for PGP construction management. Significant work has been completed on the limited demolition and clean up at the mill, work on safety, first aid and site facilities at the mill has been completed.

In June 2021, the Company reached a tentative agreement with Long Lake Hydro for grid connection to their electrical infrastructure adjacent to the property. The final agreement is targeted for completion in early 2022.

In the second half of 2021, the Company had faced a number of setbacks that eventually resulted in a revision to project schedule and the funding requirements in January 2022. In addition to the overall price increases and global supply chain issues caused by the COVID-19 pandemic, the MAPA was received later than expected (in December instead of September 2021) and the water treatment plant clarifier and tailings thickener were lost at sea in a major storm event. These events, combined with abnormally high snowfall levels associated with storm events on the west coast of British Columbia, have caused Ascot to revise the project development plans throughout the winter season and into 2022. Ascot is planning to ramp-upfull-scale construction activities in April 2022. Critical work areas include the construction and installation of the new water treatment plant, the excavation of the Cascade Creek diversion channel, the tailings facility earthworks, process plant piping and instrumentation, and initial underground mining development.

In Ascot's currently contemplated underground development sequence, by starting in April 2022 initial ore could potentially be accessed by October, enabling process plant commissioning by the end of 2022. As a result, the target date for initial gold production has shifted by one quarter from Q4 2022 to Q1 2023.

With the MAPA in hand and a more definitive project schedule, Ascot has an updated project capital estimate of $224,000, reflecting an increase of 27% over the estimate announced in Q1 2021 of $176,000. At a high level, the factors that have caused cost increases to the project, in order of influence, are: fixed indirect costs caused by schedule delays, weather impacts, piping and instrumentation labour productivity, indirect cost inflation, supply chain pressures, and COVID-19 protocols.

As at December 31, 2021, based on the updated capital cost estimate, there remains $164,000 left to spend on the project, including a $15,000 contingency. Varying levels of contingency were assigned to different project areas based on risk assessment. Of the remaining $164,000 in costs yet to be spent, approximately $103,000 has been committed under purchase orders.

Ascot has a higher degree of confidence in the updated capital estimate as it is based on real-world costing through the Early Works program, and because the Company has now ordered most of the remaining key equipment and materials to

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