You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth under "Risk Factors and Uncertainties" and elsewhere in this document. See "Cautionary Note Regarding Forward-Looking Statements" above.



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Results of Operations



Year ended April 30, 2022

We recorded a net loss of $1,354,924 ($0.01 per share) for the year ended April 30, 2022 as compared to a net loss of $4,899,259 ($0.05 per share) for the year ended April 30, 2021. The decrease in the net loss recorded for the year ended April 30, 2022 as compared to the net loss for the year ended April 30, 2021 is the net result of changes to a number of expenses. Of note are the following items:

? Management and consulting fees of $202,893 (2021 - $202,602) are comprised of

fees to manage our Company and stock-based compensation. The stock-based

compensation recognized in the current period was $nil (2021 - $nil).

Approximately 75% of the fees to manage our Company are charged to management

and consulting fees and the other 25% is charged to mineral property

expenditures.

? Mineral property expenditures of $615,950 (2021 - $605,220) are costs incurred

on our Helmer-Bovill Property. The expenditures in the current period are

pre-development costs that have been expensed during the period. The main

components of costs during the current period included engineering and

consulting ($146,057) and metallurgy ($199,073). During the current year, the

Company continued to optimize the metallurgical processes and detailed

engineering. Effective January 31, 2019, the Company returned to the

evaluation stage for accounting purposes and therefore stopped capitalizing

development costs.

? General and miscellaneous expenses of $211,002 (2021 - $197,704) are comprised

of office and telephone expenses, payroll taxes, medical benefits, insurance

premiums, travel expenses, promotional expenses, shareholder communication

fees, transfer agent fees and filing fees. The increase during the current

period was due primarily to an increase in filing and transfer agent fees.

? Professional fees of $220,355 (2021 - $165,313) include legal fees, audit fees

and financial consulting fees. The increase during the period was due to

additional professional tax fees.

? Interest expense of $104,091 (2021 - $3,725,237) is from promissory notes that

bear interest at the rates of 12%-14% per year up to April 30, 2021 and 0.13%

per year effective May 1, 2021. Interest decreased due to the decrease in


  interest rate.



Three months ended April 30, 2022

We recorded a loss of $329,961 for the three months ended April 30, 2022 as compared to a loss of $1,239,774 for the three months ended April 30, 2021. The decrease in the loss recorded for the three months ended April 30, 2022 as compared to the three months ended April 30, 2021 is the net result of changes to a number of expenses as noted above under the years ended April 30, 2022 and 2021. In particular, there was a decrease in interest expense from $959,480 to $10,984.

Liquidity and Capital Resources

Our aggregate operating, investing and financing activities during the year ended April 30, 2022 resulted in a net cash outflow of $90,228 (2021 - outflow of $237,203). As at April 30, 2022, we had a working capital deficiency of $36,111,145.

During the year ended April 30, 2022, $1,190,228 was used in operations (2021 - $1,186,324). During the year ended April 30, 2022, we spent $nil on investing activities (2021 - $879) and we received $1,100,000 from financing activities (2021 - $950,000).

We have been financed by advances pursuant to promissory notes advanced by BV Lending LLC, an entity controlled by Allen L. Ball, a member of our Board of Directors and our largest shareholder (the "Lender"). During the year ended April 30, 2022, the Company was receiving advances pursuant to the Sixth Promissory Notes. As at April 30, 2022, the balance of the promissory notes was $34,776,937. Subsequent to April 30, 2022, the Company received $275,000 pursuant to the Sixth Promissory Notes.

As at April 30, 2021, the Third Promissory Notes, the Fifth Promissory Notes and the Sixth Promissory Notes had a maturity date of the earlier of (i) June 30, 2020 and (ii) 60 days after a pre-feasibility study has been filed on SEDAR. On June 4, 2020, the promissory notes maturity date was extended from June 30, 2020 to December 15, 2020 for no consideration. All other terms remained the same. On December 3, 2020, the Lender agreed to extend the maturity date of the promissory notes to March 15, 2021 for no consideration. On March 9, 2021, the Lender agreed to extend the



  37


maturity date to April 15, 2021 for no consideration. On April 15, 2021 the maturity date was extended to May 15, 2021 for no consideration. On May 10, 2021 the maturity date was extended to June 15, 2021 for no consideration. On June 15, 2021 the maturity date was extended to July 15, 2021 for no consideration. On July 15, 2021 the maturity date was extended to August 15, 2021. In addition, the interest rate was decreased to 0.13% per annum effective May 1, 2021 for no consideration. On August 13, 2021, the maturity date was extended to September 15, 2021 for no consideration. On September 13, 2021, the maturity date was extended to October 15, 2021 for no consideration. On October 13, 2021, the maturity date was extended to November 15, 2021 for no consideration. On November 15, 2021, the maturity date was extended to December 15, 2021 for no consideration and the Lender agreed to advance an additional $500,000 under the same terms as the Sixth Promissory Notes. On December 15, 2021, the maturity date was extended to January 15, 2022 for no consideration. On January 13, 2022, the maturity date was extended to February 15, 2022 for no consideration. On February 15, 2022, the maturity date was extended to April 15, 2022 for no consideration. On March 21, 2022, the Company entered into an amending agreement whereby the Lender agreed to advance an additional $250,000, under the same terms as the Sixth Promissory Notes. On April 14, 2022, the maturity date was extended to June 15, 2022 for no consideration. On June 14, 2022, the maturity date was extended to September 15, 2022 for no consideration and the Lender agreed to advance an additional $450,000, under the same terms as the Sixth Promissory Notes.

We have not as yet put into commercial production any mineral properties and as such have no operating revenues. Accordingly, we are dependent on debt and equity financing as its primary source of operating working capital. Our capital resources are largely determined by the strength of the junior resource markets and by the status of our projects in relation to these markets, and our ability to compete for investor support of our projects.

We remain dependent on additional financing to fund development requirements on the Helmer-Bovill property and for general corporate costs. With respect to funds required for capital cost items, State-sponsored debt financing instruments may be available on attractive terms, and we intend to pursue such financial instruments to cover portions of the capital costs associated with placing the Bovill Project deposits into production.

We do not have the ability to internally generate sufficient cash flows to support our operations for the next twelve months. We have been receiving funds from a company controlled by a director of the Company through promissory notes. We have no formal plan in place to address this going concern issue but consider that we will be able to obtain additional funds by equity financing and/or debt financing; however, there is no assurance of additional funding being available. As a result, there is substantial doubt about the Company's ability to continue as a going concern.

During 2020, 2021 and 2022, there was an outbreak of COVID-19 that has impacted the economic environment and the capital markets. As the Company is at the stage of exploration and evaluation and is looking to fund mine development leading to production, the impacts of COVID-19 are not determinable at this date. COVID-19 however, could have a material impact on the Company's financial position, results of operation and cash flows. The Company's liquidity and its ability to continue as a going concern may also be impacted.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to shareholders.





Critical Accounting Policies



Measurement Uncertainty


The preparation of these consolidated financial statements in conformity with US GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We regularly evaluate estimates and assumptions related to the useful life and recoverability of long lived assets, stock-based compensation, valuation of convertible debentures and derivative liabilities, and deferred income tax asset valuation allowances. We base our estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by us may differ materially and adversely from our estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. The most significant estimates with regard to our condensed consolidated financial statements relate to the determination of fair values of derivative liabilities and stock-based transactions.



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Stock-based Compensation


We account for all stock-based payments and awards under the fair value based method. Stock-based payments to non-employees are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable.

We account for the granting of stock options using the fair value method whereby all awards will be recorded at fair value on the date of the grant. The fair value of all stock options is expensed over their vesting period with a corresponding increase to additional paid-in capital.

Compensation costs for stock-based payments that do not include performance conditions are recognized on a straight-line basis. Compensation cost associated with a share based award having a performance condition is recognized on the probable outcome of that performance condition during the requisite service period. Share based awards with a performance condition are accrued on an award by award basis.

We use the Black-Scholes option valuation model to calculate the fair value of stock options at the date of the grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimates.

Mineral Property Acquisition and Exploration Costs

Mineral property acquisition costs are capitalized when incurred. Acquisition costs include cash consideration and the fair market value of shares issued on the acquisition of mineral property claims.

Costs related to the development of our mineral reserves are capitalized when it has been determined an ore body can be economically developed. The development stage begins when an ore body is determined to be economically recoverable based on proven and probable reserves and appropriate permits are in place, and ends when the production stage or exploitation of reserves begins. Major mine development expenditures are capitalized, including primary development costs such as costs of building access ways, tailings impoundment, development of water supply and infrastructure developments.

Exploration costs include those relating to activities carried out (a) in search of previously unidentified mineral deposits, or (b) at undeveloped concessions. Pre-development activities involve costs incurred in the exploration stage that may ultimately benefit production that are expensed due to the lack of evidence of economic development, which is necessary to demonstrate future recoverability of these expenses. Secondary development costs are incurred for preparation of an ore body for production in a specific ore block or work area, providing a relatively short-lived benefit only to the mine area they relate to, and not to the ore body as a whole.

Once production has commenced, capitalized costs will be depleted using the units-of-production method over the estimated life of the proven and probable reserves. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to the Consolidated Statements of Loss in that period.

We assess the carrying cost of our mineral properties for impairment whenever information or circumstances indicate the potential for impairment. Such evaluations compare estimated future net cash flows with our carrying costs and future obligations on an undiscounted basis. If it is determined that the future undiscounted cash flows are less than the carrying value of the property, a write down to the estimated fair value is charged to the Consolidated Statements of Loss for the period. Where estimates of future net cash flows are not available and where other conditions suggest impairment, management assesses if the carrying value can be recovered.

For significant exploration and development projects, interest is capitalized as part of the historical cost of developing and constructing assets in accordance with ASC 835-20. Interest is capitalized until the asset is ready for service. Capitalized interest is determined by multiplying the Company's weighted-average borrowing cost on general debt by the average amount of qualifying costs incurred. Once an asset subject to interest capitalization is completed and placed in service, the associated capitalized interest is expensed through depletion or impairment.

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