Aurania Resources : Management’s Discussion & Analysis Q4 2023

AURANIA RESOURCES LTD.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

For the Year Ended December 31, 2023

(Expressed in Canadian Dollars unless otherwise indicated)

MANAGEMENT'S DISCUSSION AND ANALYSIS - DECEMBER 31, 2023

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INTRODUCTION

Aurania Resources Ltd. ("Aurania" or the "Company") is a publicly traded junior mining exploration company engaged in the identification, evaluation, acquisition, and exploration of mineral property interests, with a focus on precious metals and copper in South America and most recently in France. Aurania's principal asset is a 100% holding of the Lost Cities - Cutucu project ("Lost Cities Project") that covers approximately 208,000 hectares ("Ha") in southeastern Ecuador. The Company has also applied for mineral concessions in adjacent northern Peru ("Peru Project", and together with the Lost Cities Project, the "Projects"), and for an exploration license in the Brittany Peninsula of northwestern France. These applications are progressing through the lengthy review process that precedes the granting of mineral concessions. This Management's Discussion and Analysis ("MD&A") is a review of the financial condition and results of operations by the management ("Management") of Aurania for the year ended December 31, 2023 (the "Reporting Period"). This MD&A is prepared as of April 25, 2024, and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023 and the notes related thereto which have been prepared in accordance with International Financial Reporting Standards ("IFRS"). All figures contained herein are expressed in Canadian dollars ("CA$" or "$"), unless otherwise indicated. Additional information relevant to the activities of the Company has been filed electronically through the System for Electronic Document Analysis and Retrieval ("SEDAR+") - http://www.sedarplus.caand are also available on the Company's website http://www.aurania.com.

CAUTIONARY NOTE

This MD&A contains "forward-looking information" under applicable Canadian securities legislation. Except for statements of historical fact relating to the Company, information contained herein constitutes forward-looking information, including any information as to the Company's strategy, plans or future financial or operating performance. Forward-looking statements are characterized by words such as "plan," "expect", "budget", "target", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions, assumptions and estimates of Management, considered reasonable at the date the statements are made, and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking information. These factors include the Company's expectations related with exploration concepts on its projects, potential development and expansion plans on the Company's projects, the impact of general business and economic conditions, global liquidity, inflation, inability to raise additional funds as may be required through debt or equity markets, fluctuating metal prices (such as gold, silver and copper), currency exchange rates (such as the Canadian Dollar, Swiss Franc ("CHF"), the United States Dollar ("USD"), Peruvian Sol ("SOL"), and European euro ("€")), changes in accounting policies, risks related to non-core asset disposition, risks related to acquisitions, changes in project parameters as plans continue to be refined, changes in exploration time-frames, the possibility of project cost-overruns or unanticipated costs and expenses, higher prices for fuel, power, labour and other consumables contributing to higher costs and general risks of the mining industry, poor success of exploration sites, permitting timelines, government regulation and the risk of government expropriation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, limitations on insurance coverage and timing and possible outcome of labour disputes and/or shortages, as well as those risk factors discussed or referred to herein. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company has no obligation to update forward-looking statements if circumstances or Management's estimates, assumptions or opinions should change, except as required by applicable law. The reader is cautioned not to place undue reliance on forward-looking information. The forward-looking information contained herein is presented to assist investors in understanding the Company's expected financial and operational performance and results as at, and for the periods ended on, the dates presented in the Company's plans and objectives and may not be appropriate for other purposes.

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2023 HIGHLIGHTS

During 2023, the Company closed a non-brokered private placement financing for 9,253,811 units sold at a price of $0.46 per unit for total gross proceeds of $4,256,753. The net proceeds of the Offering were used to pay concession fees, general and administrative expenses and for general working capital purposes.

The Company received a total of $3,000,000 in two loans from Dr. Keith Barron. The loans are unsecured, bear interest at 2% per annum and mature upon notice of twelve months and one day from the Lender. The loans were used for working capital, general corporate purposes, and exploration expenses in Ecuador.

Aurania's CSR team continued to work with local communities in Ecuador to advance various social programs and initiatives within the areas of the Company's key targets, strengthening the bonds with the communities and improving the Company's social license.

The Company applied for an exploration license in northwestern France. The concession area has historically been the site of significant high-grade gold finds. Placer gold in streams is present in the vicinity of the area.

The Company implemented cost-cutting measures to preserve cash and will continue to consider alternative sources of funding that would enable exploration activities, such as furthering the exploration program on the Kuri-Yawi epithermal gold target area, a high priority target for further exploration and target refinement due to encouraging surface indications. The proposed exploration activities are dependent on raising sufficient funding.

Subsequent to year end, the Company filed all the appropriate documentation for the renewal of its 42 mineral exploration concession in Ecuador for the year 2024. The Company also filed a request to enter into an agreement for payment of the associated annual concession fees. Its property in Ecuador remains in good standing while an agreement is being finalized.

1.1. Exploration - Lost Cities Project, Ecuador

1.1.1 Operational Strategy

1. Operational Strategy and Priority Areas

Aurania's strategy concentrates the majority of its resources on the epithermal gold and porphyry copper exploration at the Company's Lost Cities - Cutucu Project in Ecuador while exploring joint ventures and other potential partnerships in respect of advancing concessions. The Company has identified the Awacha porphyry copper target, the Tatasham target, and the Kuri- Yawi and Kuripan epithermal gold targets as having the highest priority in the short term for further exploration and target refinement.

The Company is evaluating all the concessions and may not renew those of lower geological interest. At the same time, it continues to analyze possible options to secure additional ground where Senior Geophysical Consultant Jeremy S. Brett, M.Sc. P.Geo. identified over 200 discrete targets on the aeromagnetic coverage that could potentially be of copper porphyry nature. At this time, the Company does not know the combination of concessions to be released or secured, and there is no assurance that the Company will be able to reach this goal or the number of concessions to be released.

1. Intrusive-RelatedCopper Targets

Awacha: The target area comprises a cluster of geophysical anomalies representing porphyry targets located in an area approximately 9 km x 6 km in size. Mobile Magnetotellurics ("MobileMT") geophysics has indicated a buried conductive body in excess of 4 km x 5 km in size. The anomaly has the "classic doughnut" shape of a porphyry body. The conductive anomaly coincides with copper and molybdenum stream sediment anomalies and with quartz-sericite-pyrite ("QSP") alteration exposed in stream beds from field work reported in 2018. This is classic "phyllic" alteration seen in porphyry systems. The Company continues to work on the interpretation of the data collected during the first phase of the Anaconda mapping conducted in 2022.

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In Kuri-Yawi, no additional exploration was made in 2023.

1. Epithermal Targets for Gold-Silver

Tatasham: Three holes were drilled between the fourth quarter of 2022 and the first quarter of 2023. The Tatasham target was considered only a porphyry target before the initial drilling. Nevertheless, the discovery of a breccia including clast of sinters and a sinter boulder 1,300m further to the south, led us to reclassify the area as having both epithermal and porphyry targets. The three holes were drilled for a total of 1,664.64m including 898.89m during the first quarter of 2023.

Kuri-Yawi: During 2020 and 2021, nine scout holes were drilled to test the soil geochemistry anomalies along with a geophysical anomaly detected during the 2021 MobileMT survey. The results at that time showed intense and pervasive hydrothermal clay mineral alteration (illite with areas of kaolinite) and silica-carbonate veinlets exhibiting epithermal textures which are encouraging features consistent with proximity to an epithermal system.

A TerraSpect survey conducted in the field has shown the presence of typical epithermal alteration zonation coinciding with chalcedony veins and a low magnetic anomaly. A low magnetic anomaly can result from the demagnetization of the rock due to hydrothermal alteration. Many sinter boulders are present in the vicinity of the Kuri-Yawi area.

No additional exploration was made during 2023 in Kuri-Yawi,Kuripan, and Latorre C.

1. Regional Exploration

No regional exploration was conducted in 2023.

1.1.2 Mineral Property Interests

The Company made its annual Ecuadorian concession fee payment of USD2,337,345 ($3,165,349) in March 2023, a requirement for maintaining the concession block in good standing. The requirements to maintain the concessions in good standing are detailed in section 3.7.1 - Ecuador Project. After year end, the Company filed all the appropriate documentation for the renewal of its concession in Ecuador and filed a request to enter into an agreement for payment of the associated annual concession fees. Refer to section 17 - Subsequent events for updated information.

1.1.3 Corporate Social Responsibility ("CSR")

The Company's CSR team is its first point of contact with local communities, the majority of which are indigenous. The Company currently has social license to operate in 55 communities located within the Lost Cities Project area.

The CSR team has worked in conjunction with the Step Forward Foundation (the "Foundation") in different projects supporting local residents in education, nutrition, community ties, sports, and social aid. During 2023, the Company delivered a micro-business program to 100 women from five communities to improve the economy of their families and communities. After graduating from this program, 26 ladies moved to a second phase and are reinforcing their abilities to make associations, get more financial tools, and refine their business plans.

The CSR team and the Foundation started a pilot project in alliance with the Mathkind organization to train and provide key tools for teaching and coaching children in the learning of mathematics to reduce the educational gap in the rural areas. There are three communities and twelve teachers involved in the program and they will graduate in the first semester of 2024.

Aurania's CSR team continues to strengthen the communities through programs and workshops on leadership development for community leaders, delivering support to indigenous grassroots organizations in conflict resolution and decision making, and providing guidance in the process of adjudication of their territories with training on the use of GPS to define property limits and helping them as a bridge to government entities for the recognition of property.

1.1.4 Health & Safety

There were no reportable accidents in the field during the year.

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1.1.5 Environment & Water

Monitoring of water quality upstream and downstream of offtake points for drilling and exploration camps is on-going, up to date and no issues have been detected.

1.2 Exploration Project, Peru

1.2.1 Mineral Property Interests

The Company retained its interest in 94 concessions covering 93,100Ha in northern Peru and decided to withdraw the applications pending verification by local authorities, keeping only the concessions already granted. Further details are provided in section 3.7.2 - Peru project of this MD&A

1.2.2 Exploration - Data Compilation

An initial geological reconnaissance visit was conducted in 2022 in selected concessions. This work confirmed the presence of favorable geology indicative of potential sediment-hosted copper deposits.

No additional exploration was made during 2023 in Peru.

1.3 Exploration Project, France

The Company applied for an exploration license in the Brittany Peninsula of northwestern France through a wholly-owned French subsidiary. The concession area has historically been the site of significant high-grade gold finds. Placer gold in streams is present in the vicinity of the area.

Brittany peninsula is part of the orogenic Variscan belt. Aurania applied for a 51km2 exploration permit immediately in the vicinity of a major shear zone called South Armorican Shear (cisaillement sud-armoricain). In other parts of the Variscan belt, similar irregularities have shown to contain large gold deposits such as in Newfoundland, Canada or the north of Spain. In the area of interest, numerous gold nuggets or blocks of quartz containing high-grade gold were found. At the end of the 19th century, two auriferous quartz blocks of 1.17 kg and 1.47 kg were found at a distance of 400 m from each other. Recently, the Paris Museum acquired a block from this area containing 922 g of gold for a total weight of 3.31 kg. Around the 1980s, the BRGM (French equivalent of the USGS in the United-States) carried out alluvial sampling in the area which showed the presence of gold.

The existence of high gold concentrations in quartz veins indicates that a major hydrothermal system was active in the area bounded by Aurania. Indeed, the geology of the area consists of calc-alkaline and anatectic granites which are intensely altered in clay.

Aurania's geologists have visited the area and found numerous blocks of quartz and evidence of past mining activity. Part of the site contains deep water-filled pits and trenches that were presumably dug in the 19th century. Growth of moss on the quartz rocks is considered "luxuriant" and there is no evidence of modern prospecting or mining activity in the area. There has been no glaciation at the site and so the quartz vein material at surface is more or less "in situ".

1.4 Funding

On March 13, 2023, the Company announced its intention to close a non-brokered private placement financing for up to $5,000,000 with the option to increase the size by up to 25%. The purpose of the funding was to pay concession fees and to continue exploration activities in Ecuador and working capital. The political turmoil in Ecuador initiated during May 2023 prevented the Company from reaching the target amount, and the exploration plan went on hold. Eventually, the Company received two loans from Dr. Keith Barron, which were used for working capital, general corporate purposes, and basic exploration expenses in Ecuador.

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1.4.1 Private Placement Financing

On May 19, 2023, the Company closed the non-brokered private placement financing announced on March 13, 2023, for a total of 9,253,811 units priced at $0.46 per unit (the "Issue Price"), completed in three tranches in the months of March 2023, April 2023 and May 2023 for total gross proceeds of $4,256,754. Each unit consisted of one common share and one full warrant, the warrant having an exercise price of $0.75 per warrant and expiring 36 months after the closing date of the applicable tranche. The Company paid commissions to certain finders of an aggregate of $24,036 in cash and 52,252 finder warrants. Each finder warrant entitles the holder to purchase one unit at the Issue Price and is exercisable for a period of thirty-six (36) months from the closing of the corresponding tranche. The aggregate cash paid for regulatory and legal costs was $91,201.

A value of $1,310,122 has been assigned to warrants using the Black-Sholes option pricing model for each tranche using the following assumptions: expected dividend yield of 0%, an expected life of 3 years, an expected volatility of 96.71%, 96.41% and 95.96%, respectively, and a risk-free rate of 3.46%, 3.64% and 4.01%, respectively. Volatility is based on the historical trading of the Company's shares.

Dr. Keith Barron, the Chief Executive Officer, President, director, promoter and a significant shareholder of the Company subscribed for 7,413,236 units of this offering.

1.4.2 Related Party Loans

During the year, the Company entered into two loans with Dr. Keith Barron (the "Lender") pursuant to promissory notes issued by the Company to the Lender, the first for an aggregate of $2,000,000, received in advances between June 20 and September 20, 2023. The second for an aggregate of $1,000,000, received in advances between October 11 and December 12, 2023.

The loans are unsecured, bear interest at 2% per annum and mature upon notice of twelve months and one day from the Lender. Further details are provided in Note 9 of the consolidated financial statements for the year 2022 and Section 7 - Indebtedness in this MD&A.

2. SELECTED FINANCIAL INFORMATION

Table 1: Selected financial information

Year ended December 31,	2023	2022	2021
Cash	$325,262	$1,473,768	$4,522,657
Total assets	710,008	2,353,500	4,953,485
Total liabilities	10,882,401	9,385,756	5,263,276
Total shareholders' (deficiency)	(10,172,393)	(7,032,256)	(309,791)
Accumulated deficit	$(98,771,170)	$(91,520,949)	$(82,884,639)

The change in the accumulated deficit is discussed in detail in Section 4 - Consolidated loss and comprehensive loss.

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3. DISCUSSION OF OPERATIONS

3.1 Exploration Expenditures by Target Type

Table 2: Accumulated project expenses by target type.

					Budgeted project expenditures							Actual expenditures
	December	Use of	UoP April		UoP Mar 2022	UoP Jun	UoP Aug	UoP Dec									3 months		3 months
	Proceeds	UoP Oct	UoP Mar		Year ended	Year ended	Year ended	3 months	3 months
Exploration Category	2019	2021 Public	Private	2022	2022	2022	Budgeted		ending		ending		Differences	Discussion 6
	Technical	("UoP") Oct	offering/Privat	2021 Public	Placement and	Promissory	Promissory	Private	2023 Private	Cumulative Total	December 31,	December 31,	December 31,	ending March	ending June	September 30,	December 31,	Cumulative Total
	Report	2020	3	offering3,6	Promissory Note	Note	Note	Placement	Placement		2020	20214,5	2022	31, 2023	30, 2023		2023		2023
	Offering 3	e placement
Ecuador
Regional / Reconnaissance Exploration	$600,000	$390,000	$476,591	$ -	$ -	$595,000	$1,000,000	$ -	$ -	$3,061,591	$980,499	$1,321,403	$435,336	$25,662	$24,610		$14,189		$17,238	$2,818,937	$242,654	Refer to 3.2.1
Target Development
Epithermal Gold-Silver	2,530,000	1,970,000	1,911,073	356,820	-	-	-	-	-	6,767,893	1,772,760	2,651,317	$262,684	$66,229	$21,966		$19,886		$17,438	$4,812,280	$1,955,613	Refer to 3.2.2
Sediment-HostedCopper-Silver	1,200,000	887,000	251,437	320,000	-	-	-	-	-	2,658,437	805,288	3,938,259	$224,957	$25,662	$20,445		$19,431		$17,238	$5,051,280	$(2,392,843)	Refer to 3.2.4
Intrusive-Related Copper	1,000,000	2,164,000	115,780	350,000	-	-	-	1,879,685	-	5,509,465	4,223,749	2,286,037	$1,656,850	$700,916	$292,921		$91,171		$127,789	$9,379,433	$(3,869,968)	Refer to 3.2.3
Carbonate-HostedSilver-Zinc-Lead	170,000	759,000	1,393,592	250,000	-	-	-	-	-	2,572,592	670,043	1,481,529	$189,069	$133,330	$59,475		$41,045		$31,414	$2,605,905	$(33,313)	Refer to 3.2.4 (b)
Community Social Responsibility	250,000	350,000	526,098	390,000	-	-	-	-	-	1,516,098	906,800	847,972	$419,165	$123,428	$127,083		$75,534		$82,799	$2,582,781	$(1,066,683)	Refer to 3.4
Environmental, Health and Safety	-	-	292,968	225,000	-	-	-	-	-	517,968	-	993,475	$256,548	$58,113	$20,169		$15,456		$64,597	$1,408,358	$(890,390)	Refer to 3.5 and
																						3.6
Concessions ¹	2,800,000	2,800,000	53,100	1,470,000	1,400,000	-	-	-	3,165,349	11,688,449	2,785,907	2,613,615	$2,776,966	$3,165,349	-		-		-	$11,341,837	$346,612	Refer to 3.7.1
Peru
Concession and legal fees ²	-	-	327,156	-	-	405,000	-	-	-	732,156	219,314	1,281,174	$590,457	$208	$(120,426)		$383,871		$18,063	$2,372,661	$(1,640,505)	Refer to 3.7.2
Desktop studies	-	50,000	134,823	-	-	-	-	-	-	184,823	68,759	(29,990)	-	-	-		-		-	$38,769	$146,054
France
Professional services	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-		53,215		13,634	$66,849	$(66,849)	Refer to 3.7.3
General office and travel expenses	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-		8,273		5,365	$13,638	$(13,638)
Working capital	-	-	-	-	1,440,781	-	-	-	-	1,440,781	-	-	-	-	-		-		-	-	$1,440,781
Total	$8,550,000	$9,370,000	$5,482,618	$3,361,820	$2,840,781	$1,000,000	$1,000,000	$1,879,685	$3,165,349	$ 36,650,253	$12,433,119	$17,384,791	$ 6,812,031	$ 4,298,897	$ 446,243	$	722,071	$	395,575	$ 42,492,728	$(5,842,475)

1. The 2019 Technical Report excluded a line item for concession fees
2. USD352,925 of the concession payments made in June 2021, fourth quarter of 2022 and June 2023 were satisfied by credit certificates from rejected property interest.
3. Expenditures incurred have been largely consistent with the proposed use of proceeds with any variations discussed in the respective section.
4. Certain costs included in Regional Exploration and Target Definintion in the first and second quarters has been reclassified to Environment, Health and Safety.
5. Further detail is disclosed in the fourth quarter 2021 consistent with the use of proceeds detail in the October 2021 Prospectus.
6. See 1.1.1 (a) Operational strategy and priority areas.

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3.2 Exploration of the Lost Cities Project, Ecuador

3.2.1 Reconnaissance Exploration

Stream sediment sampling has been completed over 66% of the Lost Cities Project.

Target development

Table 3: Summary of priority areas for each target type in the Lost Cities Project.

	Target Type		Target			Planned			Status
			Kuri-Yawi B1						See sub-section 3.2.2 (b)
	Epithermal Gold-Silver					Further exploration to refine
		Tatasham			epithermal system drill			See sub-section 3.2.2 (a) and 3.2.3 (a)
						targets
			Kuripan						See sub-section 3.2.2 (c)
						Requalified to epithermal
			Tatasham			and porphyry targets after			See sub-section 3.2.2 (a) and 3.2.3 (a)
	Intrusive-Related Copper					drilling
		Awacha			Further exploration to refine			See sub-section 3.2.3 (b)
					porphyry-style drill targets

3.2.2 Epithermal Targets for Gold-Silver

1. Tatasham

The Tatasham target was considered a porphyry target only before initial drilling commenced in late 2022. Nevertheless, the discovery of a breccia including clast of sinters above hole TT-001 and a sinter boulder 1,300m further to the south led us to reclassify the area as having both epithermal and porphyry targets. Three holes were drilled between the fourth quarter of 2022 and the first quarter of 2023, for a total of 1,664.64m including 898.89m during the first quarter of 2023. Holes TT-001 and TT- 002 have crossed a zone of intense silicification associated with fault and breccia. It is believed to be the distal part of an epithermal system. Hole TT-003 crossed a sinter paleosurface with more than 30m thickness above an intense silicified zone with breccias and barite veins.

(b) Kuri-Yawi

During 2021 and 2020, nine scout holes for a total of 4,957 metres were drilled to test the soil geochemistry anomalies and one of the geophysical anomalies detected during the MobileMT survey in 2021. The results at that, time showed intense and pervasive hydrothermal clay mineral alteration (illite with areas of kaolinite) and silica-carbonate veinlets that exhibit epithermal textures which are encouraging features consistent with proximity to an epithermal system.

A TerraSpect survey conducted in the field has shown the presence of typical epithermal alteration zonation coinciding with chalcedony veins and a low magnetic anomaly. A low magnetic anomaly can result from the demagnetization of the rock due to hydrothermal alteration. Many sinter boulders are present in the vicinity of the Kuri-Yawi area.

(c) Kuripan

A soil grid showed two main areas with enrichment of epithermal pathfinders, arsenic and selenium, with erratic gold values in the northern part of the target area. Sinter is exposed in the southern part of the target area.

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(d) Latorre C

Sinter material previously identified defines probable upwelling zones that typically lie at the core of epithermal systems. One of these zones has associated gold in soil. MobileMT data shows the presence of a conductor at depth within the Latorre C target area. This target area is not a priority at this time.

3.2.3 Intrusive-Related Copper Targets

1. Tatasham

The Tatasham target is the largest magnetic target identified in the 2017 heliborne geophysical survey. During the third quarter of 2022, an Anaconda mapping method was conducted in the area defined by Dr. Steve Garwin and Aurania's geology team according to soil geochemistry and geophysics. The results of the mapping show an area of intense silicification and fracturation along a major N-trending ridge with a central region of elevated goethite / hematite ratios, which is inferred to represent the oxidation of rocks with elevated chalcopyrite / pyrite ratios. This N-S trend coincides with hydrothermal alteration zones revealed by the IR spectrometry (Terraspec) and characterized by the presence of illite.

(b) Awacha

The Awacha target area comprises a cluster of geophysical anomalies representing porphyry targets located in an area approximately 9km x 6km in size. The stream results show anomalies in copper, molybdenum, arsenic and bismuth. Soil results, received at the beginning of 2022, returned a low-grade anomalous copper in soil (> 50 ppm Cu) and rock (> 200 ppm Cu) that extends 7km (north-south) by 1-2km(east-west) through the western part of the prospect. Anaconda mapping started at the end of 2022 and an IR spectrometry (Terraspec) study was conducted at the same time on the rock samples collected in the field. Previous results showed hydrothermal alteration styles that range from chlorite-propylitic to illitic, phyllic (quartz-sericite) and locally potassic (biotite). Different intrusive outcrops from syenite to Monzodiorite and quartz veins locally with chalcopyrite were found during the first phase of the field work at Awacha. Between the fourth quarter of 2022 and the first quarter of 2023, an IR spectrometry (Terraspec) study was conducted by ASL laboratory over a selection of 393 soil samples. These samples have shown the presence of pyrophyllite and dickite, characteristic of advanced argillic alteration that indicate the Awacha area corresponds to the upper part of a porphyry system.

(c) Kuri-Yawi

2D MobileMT geophysics defined two porphyry-style targets within the Kuri-Yawi area (Kuri-Yawi F and E). Target E consists of pathfinder element enrichment over a magnetic feature and target F lies in an area of quartz-sericite-pyrite ("QSP") mineral alteration, pathfinder enrichment in soil and intrusive phases in outcrop.

3.2.4 Sediment-hosted Targets

A review of the drill core and a stratigraphic study resulted in the definition of a new sediment-hosted deposit model that increases the potential of the area and reorients any future exploration on these targets. The Company believes this target area is favorable geologically, but it is not a high priority at this time given the large extension of the target area.

(a) Tsenken

The stratigraphic study based on the drill core review was completed during the fourth quarter of 2022. The results show a favorable geological environment for the presence of additional sediment-hostedcopper-silver occurrences similar to the Kupferschiefer deposits of Poland, with the main target being the Hollin formation present in the south part of Tsenken and in Kirus.

(b) Tiria-Shimpia

Review of the drill core resulted in the recognition of Cretaceous Napo sediments in a dropped-down graben in the centre of the Project. The zinc, silver and lead mineralization occur in the calcareous section of the Napo formation, which was originally identified as the much older Santiago formation. Consequently, there is a strong probability of finding the presence of new mineralization along the graben faults subscribing the Napo inlier. Management is quite encouraged by this new interpretation.

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3.3 Mineral Property Interests and Obligations

The Company made its annual Ecuadorian concession fee payment of USD2,337,345 ($3,165,349) in March 2023, and thereby met a key requirement for maintaining the concession block in good standing. The requirements to maintain the concessions in good standing are detailed in section 3.7.1 - Ecuador Project. Refer to section 17 - Subsequent events for updated information regarding concession fee payment due March 31, 2024.

During June 2023, the Company applied the available credits in Peru from rejected mineral property applications from previous years to pay the concession fees corresponding to its 94 concessions, which are in good standing for another year.

The Company applied for an exploration license in the Brittany Peninsula of northwestern France. This application is progressing through the lengthy review process that precedes the granting of mineral concessions.

3.4 Corporate Social Responsibility

The Company's CSR team continues to work closely with communities within the Lost Cities Project area, 98% of which are Indigenous. The Company's approach is aligned with the Equator Principles and United Nations Declaration on the Rights of Indigenous Peoples. A Stakeholder Engagement Plan incorporates early stakeholder engagement with a social impact analysis and defines opportunities for mutually beneficial partnerships between the communities, the Company, and the government.

In order to maximize the economic and social benefits of social programs in the communities where the Company has direct influence and to ensure their long term sustainability, the Company has supported with technical resources and logistics, Government programs from the ministries of Health, Agriculture, Education and Social Inclusion and Economy in addition to its normal-course interaction with the Ministry of Energy and Non-Renewable Resources (the "MENRR") and Ministry of the Environment, Water and Ecological Transition (the "MEWET"). This has benefited such government agencies as access to these remote communities is challenging, and the relationship between Government-Communities has been historically almost inexistent while the Company has strong ties and recognition within them.

The Company currently has social license to operate in 55 communities located within the Lost Cities Project area. The CSR team has worked in conjunction with the Foundation and local residents to install clean water systems in nine communities, building three school libraries, providing school supplies and supporting deworming campaigns. In this alliance, the Company delivered a micro-business program to 100 women from five communities to improve the economy of their families and communities. After graduating from this program, 26 ladies moved to a second phase and are reinforcing their abilities to make associations, getting more financial tools, and refine their business plans.

3.5 Health and Safety

The Company believes that a safe and healthy workplace is a moral imperative reflecting the Company's respect for the individual and the community. The Company is committed to the safety and health of its employees and constantly monitors trends and reviews current and emerging issues in the safety and health field and evaluates their potential impact on the Company and its employees. Special effort has been directed at working with governmental agencies to improve health, sanitation and education within the Project area.

3.6 Environment & Water

Contaminated water, poor sanitation, and poor hygiene have been identified as the prime risk to the health of people living and working in the Lost Cities Project area; hence the Company is investing in education about basic sanitation and water purification methods in conjunction with the Foundation and local residents to install clean water systems in nine communities. In prior years, preliminary assessments of water quality were completed in 53 of the 55 communities within the area of influence of the Lost Cities Project.

The Technical Water Group is in frequent contact with MEWET regarding the processing of water-use permits required for scout drilling. Careful monitoring of water quality upstream and downstream of water offtake points for drilling and camp use is ongoing and no issues have been detected.

MANAGEMENT'S DISCUSSION AND ANALYSIS - DECEMBER 31, 2023

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