M3 Metals : Management Discussion and Analysis

Management's Discussion and Analysis

Management's Discussion and Analysis

For the Year Ended August 31, 2021

Date: December 22, 2021

This Management Discussion and Analysis ("MD&A") relates to the financial position and results of operations of M3 Metals Corp. ("M3 Metals" or the "Company") for the year ended August 31, 2021. This MD&A should be read in conjunction with the Company's audited consolidated financial statements for the years ended August 31, 2021 and 2020. The Financial Statements and related notes have been prepared in accordance with International Financial Reporting Standards ("IFRS"). Unless otherwise noted, all references to currency in this MD&A are in Canadian dollars.

This discussion contains forward-looking statements that involve risks and uncertainties. Such information, although considered to be reasonable by the Company's management at the time of preparation, may prove to be inaccurate and actual results may differ materially from those anticipated in the statements made.

Overview of the Company

M3 Metals Corp. is a Canadian listed company, focused on the exploration and development of its mineral projects in North America. The Company is currently exploring the Stars project in the Omineca Mining Division located in north central British Columbia. Additionally, the Company holds interest in the Mohave Mine Gold project in the Weaver mining district, Mohave County, Arizona, USA, the Aspen gold property in British Columbia, Canada and the Block 103 iron ore project ("Schefferville") in Labrador, Canada, which hosts an initial NI 43-101 inferred resource of 7.2 billion tonnes at 29.2 per cent total iron.

In July 2020, the Company entered into a definitive mineral property option agreement ("Definitive Agreement") with Black Mountain Gold USA Corp. ("BMGUC"), previously Huffington Capital Corp. Under the Definitive Agreement, BMGUC can earn up to a 90% interest in the Mohave Mine Gold Property for a total consideration of $6,100,000 in cash, of which $5,000,000 can be paid in cash or in value of shares to the Company, and an aggregate of $3,000,000 in exploration expenditures on the Mohave Mine Gold Property. BMGUC is also responsible to keep the underlying option agreement in good standing by making the necessary cash payments and completing exploration expenditures requirement.

In September 2020, the Company entered into a mineral property option agreement ("Aspen Option Agreement") with Big Rock Resources Inc. ("Big Rock"). Under the Aspen Option Agreement, Big Rock was granted the option to acquire a 100% right, title and interest in and to the Company's Aspen Gold Property in exchange for the payment to the Company of $100,000 and the issuance of 3,000,000 Big Rock common shares to the Company. The Big Rock common shares were subsequently converted to 3,000,000 Gold State Resources Inc. ("GSR") common shares. As at date of the report, the Company is still negotiating with GSR in relation to the settlement of the $100,000 option payment. Refer to "Summary of Properties".

As at June 5, 2021, the Company was unable to fulfill its obligation under the Stars Property First Agreement (defined below under Summary of Properties) and has forfeited the option, as a result, the Company recorded a write-off of exploration and evaluation properties of $860,101 during the year ended August 31, 2021.

In December 2021, the Company completed the option in the Second Agreement and earned a 50% interest in the Stars Property.

In December 2021, the Company entered into a purchase and sale agreement with Aurwest Resources Corp. ("Aurwest") to sell the 50% interest of the Stars Property for cash payment of $450,000 and 1,500,000 common shares of Aurwest, and granted the Company a 2% net smelter return.

1 | P a g e

Management's Discussion and Analysis

Summary of Properties

Exploration and Evaluation Properties

For the year ended August 31, 2021, the Company incurred exploration and evaluation expenditures of $20,318 (before proceeds from sales of exploration and evaluation properties and recovery) as compared to $738,820 (before recovery) in the comparative year of 2020. The total cumulative acquisition and deferred exploration costs of the Company's current projects to August 31, 2021 are summarized as follows:

	Schefferville	Aspen	Stars	Mohave	Total
	$	$	$	$	$
Property acquisition costs	1	171,739	184,501	100,213	456,454
Exploration expenditures:
Drilling	-	16,921	1,925,145	-	1,942,066
Geological	199,442	56,504	187,801	391,063	834,810
Transportation	-	16,396	12,035	-	28,431
	199,443	261,560	2,309,482	491,276	3,261,761
BC mineral exploration tax credit
recoverable	-	(23,975)	(114,578)	-	(138,553)
Value of option payments received	-	(900,000)	-	(300,000)	(1,200,000)
Gain from option payment received	-	711,165	-	-	711,165
Recovery of exploration and evaluation
properties	-	-	-	(191,276)	(191,276)
Write-off of exploration and evaluation
properties	-	(48,750)	(1,703,904)	-	(1,752,654)
Reclassification to asset held for sale	-	-	(491,000)	-	(491,000)
As at August 31, 2021	199,443	-	-	-	199,443

The Schefferville Property:

Block 103

The Block 103 iron ore property ("Block 103 Project") covers 7,245 hectares within the Labrador Trough, 30 kilometres northwest of the mining town of Schefferville near the border of Quebec, Canada. Block 103 lies immediately north and parallel to Tata Steel/New Millennium Iron Corp.'s LabMag magnetite deposit and southeast of their KeMag magnetite deposit, which have a combined mineral resource of approximately 8 billion tonnes of measured and indicated resources and 2 billion tonnes of inferred resources. Block 103 is strategically located close to an existing railway that runs south linking to the shipping port of Sept Iles, Quebec.

Block 103 lies predominantly within the Schefferville Lithotectonic Zone, which includes the Greenbush Zone, however, the western edge of the claim block lies west of the Stakit Lake Fault in the Tamarack Lithotectonic Zone. The Tamarack Zone, which also hosts the LabMag and Kemag deposits, typically has only the one instance of the Sokoman Iron Formation with no thrust-fault repetition. The Schefferville Lithotectonic Zone is known in the extensive geological literature to host multiple shallow-east-dipping thrust fault that repeats the stratigraphy, including the iron oxide members of the Sokoman Formation. This fault-repetition creates the potential for significantly more tonnage per unit surface area, and these occurrences have been observed in the drilling results throughout the Greenbush Zone.

2 | P a g e

Management's Discussion and Analysis

Greenbush Zone

The drilling program on Block 103's Greenbush Zone to date has enabled the Company to outline an area that hosts significant magnetite mineralization. The outlined area, called the Greenbush Zone, is underlain by a continuous magnetite bearing horizon (Sokoman Formation). (Refer to Greenbush Zone Map, which can be found at https://www.m3metalscorp.com.)

On February 4, 2013, the Company released the results of the initial NI 43-101 mineral resource estimate on an area within the Greenbush Zone which was the primary focus of the 2012 exploration program. Watts, Griffis and McOuat ("WGM"), Consulting Geologists and Engineers of Toronto, Ontario estimated an inferred resource of 7.2 billion tonnes at 29.2% total iron (18.9% magnetic iron). This resource estimate is based on a cut-off grade of 12.5% magnetic iron (magFe%). The inferred resources cover an area with a strike length of approximately 4 kilometres (km) and a width of 2.5 km.

In March 2016, the Company released the results of a ground gravity survey conducted by TSMC on the Company's Block 103 property. As an initial follow up on the recent ground gravity program in the summer of 2015 TSMC completed 3-diamond drill holes testing only one area on the eastern edge of the Block 103 property near the newly constructed access road. There was no DSO style mineralization intersected within the 3 drill holes conducted by TSMC, partially due to the fact that drilling was concentrated close to existing access and did not adequately test the best parts of nor all the targets.

Block 103-Greenbush Zone Initial NI 43-101 Resource Report

The Block 103 deposit is predominantly composed of magnetite and a process flowsheet based on progressive particle size reduction and magnetic separation, which is conventional and proven for this type of mineralization, is being developed. Based on laboratory test results, metallurgical performance for the operation has been projected as follows:

Magnetite Recovery	93.7%
Concentrate Iron Grade	70.0%
Concentrate Silica Grade	3.4%
Concentrate Liberation Size
P100	75µ
Ore Hardness
SMC (Axb)	37
BWi (kWh/t at p80 -32um)	15.5

These results are in line with similar deposits in the region. Results to date suggest that the concentrate that will be produced and that will feed the pelletizing plant will have the following chemical composition:

Fe	SiO2	Al2 O3	MgO	CaO	Na2 O	K2 O	Ti	Mn	P	Cr
70%	3.40%	0.08%	0.10%	0.11%	0.07%	0.01%	0.02%	0.046%	0.006%	0.02%

The aforementioned results are based on the northern and eastern sectors of the deposit and are deemed to reasonably represent the first thirty years of operation according to the mine development plan envisioned at this time.

Field work is being planned for the 2021 field season that will target DSO mineralization on the Block 103 Property

Aspen Gold Property

The Aspen Property is located approximately 75 kilometers southwest of Vanderhoof, British Columbia, Canada, in the Omineca Mining Division. The property consists of 7 mineral claims totaling 4,169.81 hectares, whereas of the date of this report, all claims are owned in part or in whole, by M3 Metals as outlined below.

3 | P a g e

Management's Discussion and Analysis

The Company has entered into an agreement (the "First Agreement") with a company controlled by Andrew Bowering (the "First Optionor"), a director of the Company, to purchase a 90% interest in 12 of the mineral claims comprising the Aspen property and covering an area of 5,537 hectares through the payment of cash. Whereby the First Optionor retains 10% interest that is carried to the point at which a bankable feasibility study, if any, is completed. Upon the completion of a bankable feasibility the company and the First Optionor have agreed to enter into a joint venture agreement. There are no royalties subjected upon the 90% interest of the 12 mineral claims purchased by M3 Metals from the First Optionor under the First Agreement. Subsequently, the related party relinquished the remaining 10% interest of the property to the Company, which resulted the Company to acquire a 100% interest of the 12 mineral claims under the First Agreement.

Additionally, the Company entered into an agreement (the "Second Agreement") with TTM Resources Inc. ("TTM") to purchase a 100% interest in three of the mineral claims comprising the Aspen property and covering an area of 1,874 hectares through the payment of cash and common shares in M3 Metals. The purchase of these claims is subject to a 2% net smelter return royalty where the Company may, at any time, reduce the net smelter return royalty to 1% by paying the sum of $500,000 to TTM.

The Aspen Gold Property is strategically located within the "Nechako Uplift" block identified by New Gold Inc. Recent airborne magnetic geophysical surveys completed by Geoscience BC (2014) have identified distinct ovoid magnetic response halos (~5km in diameter) representing granitic porphyry stocks proximal to both the Blackwater deposit and Aspen. Given the proximity of these stocks to the Blackwater, Capoose, and Chu deposits in the region, they are interpreted to have a first order control on the mineralization within the district. Aspen is ideally located on the margin of one of these two distinct halos, where the Blackwater deposit sits on the margin of the other. The property has high potential to host significant Au-Ag mineralization in a similar structural and geological setting as Blackwater.

In September 2020, the Company entered into the Aspen Option Agreement with Big Rock. Under the Aspen Option Agreement, Big Rock was granted the option to acquire a 100% right, title and interest in and to the Company's Aspen Property in exchange for the payment to the Company of $100,000 and the issuance to the Company of 3,000,000 of Big Rock's common shares. As at date of the report, the Company is still negotiating with GSR in relation to the settlement of the $100,000 option payment.

Subsequently, Big Rock entered into a share exchange agreement (the "Share Exchange Agreement") with Cyon Exploration Ltd. ("Cyon"), a TSX-V listed company. Under the terms of the Share Exchange Agreement, the Company exchanged its 3,000,000 Big Rock common shares to Cyon (received). Both the Aspen Option Agreement and the Share Exchange Agreement were negotiated at arm's length and were not entered into by related parties. In September 2021, Cyon changed its name to Gold State Resources Inc.

Stars Property

In November 2017 (and subsequently amended in June 2020 and July 2021), the Company signed two separate option agreements for options to acquire up to an 80% interest in a total of 2,136 Hectares of prospective mining claims in the Omineca Mining Division located in north central British Columbia, approximately 40 kilometres south - southwest of Houston (collectively, the "Stars Property").

The Stars Property is located 60 kilometres to the north of Imperial Metals Huckleberry mine. M3 Metals' Stars Property is host to wide spread chargeability anomalies and significant copper-gold-silver mineralization outcropping at surface. The Stars Property is underlain by Lower Jurassic volcanics, and Lower Cretaceous Skeena Group sediments that are intruded by variably mineralized Late Cretaceous intermediate to felsic Bulkley Suite intrusive rocks.

4 | P a g e

Management's Discussion and Analysis

The Stars Property is fully permitted for drilling on two main zones that were first discovered in the late 1990's when new logging roads were being constructed in the area. Since then mineralization has been confirmed in shallow drilling, and consists predominately of quartz sulphide veins containing chalcocite, bornite, chalcopyrite, and pyrite in intensely altered host volcanic rocks. The outcropping mineralization, especially at the Road Zone, is interpreted to be high level porphyry style mineralization evident from euhedral chalcocite crystals with intense muscovite replacement in the wall rock. It is possible that this zone is immediately above or proximal to an enriched copper porphyry zone and that the two adjacent zones identified on surface on the property join at depth in a higher grade zone. Rock samples from the Road Zone assayed up to 3.3% Copper, 0.2 g/t Gold, and 12.2 g/t Silver. The chargeability anomalies were identified on the property by a Hunter Dickinson Group company in 2000 and are at least 3 kilometres x 3 kilometres across and open to the north, south, and east.

The first agreement (the "First Agreement") is with Pacific Empire Minerals Corp., an arm's length party which currently owns 50% of the Stars Property. Under the terms of the First Stars Agreement, the Company has the option to earn up to a 30% interest in the Stars Property. As at June 5, 2021, the Company was unable to fulfill its obligation under the First Agreement and has forfeited that option.

The second agreement (the "Second Agreement") is with Divitiae Resources Ltd. a non-arms-length party owned by Adrian Smith, P.Geo, a director of the Company, which currently owns 50% of the Stars Property. Under the terms of the Second Agreement, the Company has the option to earn up to an additional 50% interest in the Stars Property by completing the following:

	Cash payment ($)	Common shares
Upon TSX-V approval - June 5, 2018	(paid)	10,000	(issued)	20,000
On or before June 5, 2019	(paid)	20,000	(issued)	40,000
On or before June 5, 2020		-	(issued)	30,000
The earlier of: (i) on January 31, 2022; or (ii) the	(paid	50,000		-
Company completed a financing for gross proceeds	subsequently)
exceeding $100,000
On or before January 31, 2021	(paid	50,000	(issued	100,000
	subsequently)		subsequently)
Total Requirement		130,000		190,000

In December 2021, the Company completed the option in the Second Agreement and earned a 50% interest in the Stars Property. The Company then entered into a purchase and sale agreement with Aurwest to sell the 50% interest for cash payment of $450,000 and 1,500,000 common shares of Aurwest, and granted the Company a 2% net smelter return.

Mohave Mine Gold Property

On September 21, 2019, the Company entered into an option agreements with DDS Resources LLC and Mohave Mine Partnership LLC (collectively, "Optionors") to acquire, by way of option, up to 100% of certain mining claims in the Weaver mining district, Mohave County, Arizona, USA (collectively, the "Mohave Mine Gold Property").

5 | P a g e