Gold Mountain Mining : GMTN_ MD&A Q1

MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE COMPANY'S FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

FOR THE THREE-MONTH PERIOD ENDED APRIL 30, 2022

(All figures are expressed in Canadian dollars, unless otherwise stated)

GENERAL BUSINESS AND OVERVIEW

Gold Mountain Mining Corp. (the "Company", "Gold Mountain" or "GMTN") was incorporated pursuant to the provisions of the Business Corporations Act of British Columbia on November 5, 2018. The registered head office and principal address of the Company is 1285 West Pender Street, Suite 1000, Vancouver, British Columbia, Canada, V6E 4B1. The Company's common shares trade on the Toronto Stock Exchange under the symbol "GMTN", on the Frankfurt Stock Exchange under the ticker "5XFA" and on the OTCQB Venture Market under the stock symbol "GMTNF".

It is fundamental for readers of this document to be aware that effective December 23, 2020, the Company underwent a reverse takeover transaction ("RTO"). The RTO resulted in numerous changes to the Company's business, including changing its name from Freeform Capital Partners Inc. to Gold Mountain Mining Corp. and acquiring all the shares of Bayshore Minerals Incorporated ("Bayshore"), a private company holding a 100% interest in Elk Gold Mining Corp ("Elk Mining"), which is the owner of the Elk Gold Property in British Columbia, Canada.

GMTN is focused on the exploration, development and operation of gold properties. The Company operates the Elk Gold Mine located in British Columbia, Canada.

All public filings for the Company can be found on the SEDAR website www.sedar.com.

DATE AND SUBJECT OF REPORT

The following is Management's Discussion & Analysis ("MD&A") of the Company's financial condition and results of operations for the three-month period ended April 30, 2022 and to the date of this MD&A. This MD&A should be read in conjunction with the condensed interim consolidated financial statements for the three-month period ended April 30, 2022 and the annual audited consolidated financial statements for the year ended January 31, 2022. This report is dated June 10, 2022.

The Company reports its financial results in Canadian dollars and all references to $ in this MD&A refer to the Canadian dollar. All financial information in this MD&A is derived from the Company's condensed interim consolidated financial statements for the three-month period ended April 30, 2022 and April 30, 2021 prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

FORWARD LOOKING STATEMENTS

The information set forth in this MD&A contains statements concerning future results, future performance, intentions, objectives, plans and expectations that are, or may be deemed to be, forward-looking statements. These statements concerning possible or assumed future results of operations of the Company are generally, but not always, preceded by, followed by or include the words 'believes,' 'expects,' 'anticipates,' 'estimates,' 'intends,' 'plans,' 'forecasts,' or similar expressions. Forward-looking statements are not a guarantee of future performance. These forward-looking statements are based on current expectations that involve numerous risks and uncertainties, including, but not limited to, those identified in the Risks and Uncertainties section in this MD&A and the Annual Information Form. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately. Although management believes such assumptions underlying the forward-looking statements to be reasonable, any of the assumptions could prove inaccurate. These factors should be considered carefully, and readers should not place undue reliance on forward-looking statements. The Company may not provide updates or revise any forward-looking statements, except those otherwise required under paragraph 5.8(2) of NI 51-102, whether written or oral that may be made by or on the Company's behalf.

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Q1 2023 CONSOLIDATED FINANCIAL AND OPERATIONAL HIGHLIGHTS

Financial Highlights

• Quarterly revenue of $3,706,423 with a gross profit of $925,420
• Working capital balance of $15,069,119 at April 30, 2022
• Closing cash balance of $18,819,693 at April 30, 2022
• Loss and comprehensive loss of $237,816 and adjusted EBITDA1 of $526,949

Operating Highlights

• Crushed ore production of 1,987 ounces of gold
• Crushed ore sales of 1,898 ounces of gold at an average realized price1 of $1,930 per ounce
• Mined ore production of 15,063 tonnes at a grade of 4.24 grams per tonne ("g/t")
• Cash cost per ounce of crushed ore sold1 of $1,379

BUSINESS DEVELOPMENT AND OVERALL PERFORMANCE

Base Shelf Prospectus

On April 21, 2022, the Company closed a bought deal public offering of 14,800,000 units for $1.25 per unit raising gross proceeds of $18,500,000. Each unit consisted of one common share and one-half of a share purchase warrant. The Company issued a total of 14,800,000 common shares, 7,400,000 warrants exercisable until April 21, 2024 for $1.75 and 660,000 underwriter warrants exercisable until October 21, 2023 for $1.25.

Mining

During the three months ended April 30, 2022, Gold Mountain began start-up operations at the Elk Gold Mine and delivered its first crushed ore to New Gold Inc.'s New Afton Mine. Gold Mountain commissioned its newly constructed sample plant and is continuing to streamline its procedures. Mined ore is being crushed, sampled, and assayed prior to being delivered to the New Afton mine in accordance with the terms of the Ore Purchase Agreement. For the three months ended April 30, 2022, the Company delivered 1,898 ounces of gold and generated revenue of $3,706,423. During the commissioning process, the Company operated the mine with an excellent safety record and continued to confirm the continuity and high-grade nature of the veins within the Elk Gold Mineral resource.

The Elk Gold Mine has also experienced challenges during commissioning with respect to both grade control and sampling processes, which has resulted in lower than forecast ore production during initial ramp-up. The Company has implemented a number of initiatives which are expected to positively impact future mining results. They include hiring industry experts that have experience mining narrow-vein deposits, implementing a robust in-fill drill program and examining other initiatives such as preconcentration technologies. The Company anticipates that it will continue working through these initiatives during the upcoming quarter.

OUTLOOK

The Company intends to continue focusing on its Elk Gold Project located in British Columbia, Canada, ramping up mining of crushed ore and exploring the multiple mineralized zones identified at the project.

Exploration

The Company plans on conducting the following exploration:

• Phase IV drilling - Approximately 20,000m at the Lake, South and Elusive zones with a goal of expanding the Lake and South resources as well as expanding the Elusive high-grade gold target and testing the Elusive copper targets.
• Geological mapping and prospecting - The Company will also conduct geological mapping, prospecting, soil geochemical surveys and ground magnetic surveys with a view to better define future drill targets around the property.

1 This is a non-IFRS financial measure. Please refer to the "Non-IFRS Financial Measures" section at the end of this MD&A for a description of these non-IFRS financial measures and a reconciliation to operating costs from the Company's condensed interim consolidated financial statements.

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• Updated Technical Report and Preliminary Economic Assessment - The Company anticipates completing an updated resource estimate and preliminary economic assessment in the third quarter of 2022, which incorporates the results of the Phase III drill program. The Company may elect to conduct a pre-feasibility or feasibility study.

Mine Development and Expansion

Project Expansion:The Company has applied to the British Columbia Environmental Assessment Office to designate the proposed expansion plan for the Elk Gold Project, which is expected to increase total mining to approximately 324,000 tonnes per year and contain approximately 64,000 ounces of gold per year, as a reviewable project under the Environmental Assessment Act.

Underground Decline Rehabilitation and Development:A majority of the proposed expansion of the Elk Gold Project involves conducting underground mining. In order to do so, the Company must rehabilitate the historic underground decline that is currently flooded and was developed by previous owners as well as develop new underground infrastructure.

Mergers & Acquisitions

The Company is currently evaluating M&A opportunities with a focus on assets with near term production potential.

REVIEW OF OPERATING RESULTS
		Three months ended April 30,
Operating Results		2022	2021
Ore mined and crushed	(t)	15,063	-
Waste mined	(t)	379,855	-
Total mined	(t)	394,918	-
Gold ounces produced	(oz)	1,987	-
Ore grade mined	(g/t)	4.24	-
Strip ratio	waste/ore	25.2	-
Gold ounces produced	(oz)	1,987	-
Gold ounces sold (payable)	(oz)	1,898	-
Average realized price2	$/oz	1,930	-
Total cash costs per ounce sold2	$/oz	1,379	-
Cost of sales per ounce2	$/oz	1,465	-

Operating results overview

• The Company utilizes a third-party contractor, Nhwelmen-Lake LLP ("Nhwelmen") for its mining operations at the Elk Gold Mine. During the three months ended April 30, 2022, the Company mined 15,063 tonnes of ore, all of which came from the Siwash North Pit #1.
• Ore grade mined during the three months ended April 30, 2022 was 4.24 grams per tonne which is lower than projected as a result of the challenges experienced during initial ramp-up with respect to both grade control and sampling procedures. In the near term the Company has implemented the initiatives set out above to continue to refine its existing grade control and sampling procedures to improve the grade of ore being delivered to the New Afton mine.
• The Company currently utilizes a crusher and sample plant on site, with all ore placed as run-of-mine directly on the ore stockpile. The average ore grade was 4.24 g/t resulting in 1,987 contained ounces of gold.
• Total cost of sales were $2,781,003 for three months ended April 30, 2022. The total costs of sales per ounce2 was $1,465.

2 This is a non-IFRS financial measure. Please refer to the "Non-IFRS Financial Measures" section at the end of this MD&A for a description of these non-IFRS financial measures and a reconciliation to operating costs from the Company's condensed interim consolidated financial statements.

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ELK GOLD PROJECT

Property Description and Location

On May 16, 2019, the Company acquired the Elk Gold Project in British Columbia, Canada from Equinox Gold Corp. ("Equinox").

The Elk Gold Project is located in south central British Columbia, Canada, approximately 325km northeast of Vancouver and 55km west of Okanagan Lake, midway between the cities of Merritt and West Kelowna. The map below sets out the location of the Elk Gold Project.

Land Tenure

The Company holds its interest in the Elk Gold Project through its wholly owned subsidiary, Elk Gold Mining Corp. The entire Elk Gold Project consists of 32 contiguous mineral claims covering 22,152 hectares and two mining leases covering 646 hectares. The 150-hectare mining lease expires on September 14, 2022 and the 496-hectare mining lease expires on November 17, 2051. All mineral claims were scheduled to expire on April 30, 2021, but due to COVID-19, expiry dates on claims were extended to December 31, 2022. The claims may be maintained beyond their current expiry date by continuing to conduct work on the property at the rate of $331,321 per year, or by cash payment in lieu at double that rate. The mining leases may be maintained by paying total yearly rental payments of $13,000 and providing an annual reclamation report that is acceptable to the Ministry of Energy, Mines and Petroleum Resources. Surface rights are currently held by the provincial government of British Columbia. The Company has met the annual spend requirements for 2022 for the mineral claims and intends to maintain the mining leases.

Permitting

The Company holds Mine Permit M-199 ("Mine Permit"), Effluent Discharge Permit #106262 ("Discharge Permit") as well as Exploration Permit M-4-387 ("Exploration Permit"). In October 2021, the Company obtained an amendment to the Mine Permit to allow for production of up to 70,000 tonnes per year, which is valid for the life of mine (currently contemplated for 11 years). The Company received its amendment to the Discharge Permit on February 23, 2022, which allows for construction of a new waste rock storage facility.

In addition, the Company has applied to the British Columbia Environmental Assessment Office to designate the proposed expansion plan for the Elk Gold Project, which is expected to increase total mining to approximately 324,000 tonnes per year containing approximately 64,000 ounces of gold per year, as a reviewable project under the Environmental Assessment Act.

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Exploration on the Elk Gold Project is regulated via two permits: the Mine Permit for work in the mining permit area and the Exploration Permit for exploration on the surrounding claims.

Reclamation Commitments

The Mine Permit provides for posting a total of $15,866,700 in reclamation security in installments, as shown on the table below:

Date	Installments ($)	Cumulative ($)
Within 60 days of the issuance of the	4,592,500	4,742,500
M-199 Permit (December 20, 2021)
October 1, 2022	2,703,400	7,445,900
October 1, 2023	2,040,800	9,486,700
October 1, 2024	1,380,000	10,866,700
October 30, 2024*	5,000,000	15,866,700

*If the construction and commissioning of the active water treatment plant is completed to the satisfaction of the Chief Permitting Officer by October 30, 2024, Gold Mountain is not required to post the additional security in the amount of Five Million ($5,000,000) dollars that would otherwise be due on that date.

On December 20, 2021, the Company as principal and Intact Insurance Company as surety posted a reclamation security bond in favor of the Province of British Columbia for $4,742,500 with a term of one year. The Company provided cash collateral of $715,893. The Company anticipates posting similar reclamation security bonds each time a reclamation security installment becomes due.

Royalties and Encumbrances

Equinox Share Pledge Agreement

On May 16, 2019, Bayshore entered into a share pledge agreement with Equinox whereby Bayshore pledged the Elk Mining shares to Equinox as security for amounts owing under the Equinox promissory note, which was issued in connection with Bayshore's purchase of the Elk Gold Project. If the Company defaults on the payment of the Equinox promissory note, then Equinox may take possession of the Elk Mining shares. The Equinox promissory note is repayable in three annual instalments of $3,000,000 with the first payment having been made on May 17, 2021, the second payment having been made on May 16, 2022 and the remaining payment being due on May 16, 2023.

Net Smelter Return ("NSR") Royalties

Production from the Elk Gold Project is subject to a 2% NSR royalty held by Star Royalties Ltd., who purchased the 2% NSR royalty from Almadex Minerals Limited on September 28, 2021 for total consideration of US$10,630,000. A further 1% NSR royalty is payable to Don Agur on production from the Agur Option block which is outside of any of the identified mineralized zones.

Location of Mineralized Zones

The Elk Gold Project is host to eight known mineralized zones. Following the conclusion and findings of the Phase II drill program the Siwash North Zone was expanded and connected to the historically viewed satellite Gold Creek Zone, which enabled the Company to merge the geological models and consolidate the deposits. The map below sets out the names and location of those zones within the Elk Gold Project.

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