Minco Capital : Q2 MD&A

MINCO CAPITAL CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

This Management's Discussion and Analysis ("MD&A") of Minco Capital Corp. ("we," "our," "us," "Minco Capital," or the "Company") has been prepared by management based on available information up to August 23, 2022, and should be read in conjunction with the unaudited condensed interim financial statement and related notes thereto prepared by management for the six months ended June 30, 2022. The Company's condensed interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting of International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. Certain information and notes usually provided in the annual financial statements have been omitted or condensed. Therefore, this MD&A should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2021.

Except as noted, all financial amounts are expressed in Canadian dollars. All references to "$" and "dollars" are to Canadian dollars, and all references to "US$" are United States dollars. Some dollar amounts are rounded to thousands ('000) for discussion purposes.

Additional Company information is available under the Company's profile on SEDAR at www.sedar.com. The Company's audit committee reviews the condensed interim financial statements and the MD&A and recommends approval to the Company's board of directors.

Minco Capital was incorporated in 1982 under the laws of British Columbia, Canada. The Company changed its name from Minco Gold Corporation to Minco Capital Corp. on February 25, 2019. Our corporate office is in Vancouver, British Columbia. The Company's common shares are traded on the TSX Venture Exchange ("TSX-V") under the symbol "MMM" and on the OTCQB Market tier in the USA ("OTCQB") under the symbol "MGHCF."

As of the date of this MD&A, the Company had 45,110,881 common shares and 4,840,000 stock options outstanding.

Table of Contents

1.	HIGHLIGHTS FOR QUARTER ..........................................................................................................................	2
2.	INVESTMENTS AT FAIR VALUE ....................................................................................................................	2
3.	RESULTS OF OPERATIONS..............................................................................................................................	4
4.	SUMMARY OF QUARTERLY RESULTS .........................................................................................................	5
5.	LIQUIDITY AND CAPITAL RESOURCES .......................................................................................................	7
6.	OFF-BALANCESHEET ARRANGEMENTS ....................................................................................................	7
7.	RELATED PARTY TRANSACTIONS ...............................................................................................................	7
8.	SIGNIFICANT ACCOUNTING POLICIES ........................................................................................................	8
9.	FINANCIAL INSTRUMENTS.............................................................................................................................	8
10. INTERNAL CONTROLS OVER FINANCIAL REPORTING ...........................................................................	9
11.	CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION ..............................................	10

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1. Highlights for the Quarter

During the three months ended June 30, 2022, the Company:

1. acquired common shares and warrants of public companies for a total cost of $314,000, disposed of common shares of public companies for proceeds of $ 306,000, and recognized a gain of $3,000. The Company also earned $13,000 of dividend and interest income.
2. acquired and cancelled 1,133,000 common shares of the Company for a total payment of $79,000 under the NCIB program.
   Subsequent to the six months ended June 30, 2022, the Company acquired 125,000 common shares of the Company for a total payment of $7,000 under the NCIB program.

1.1. Net asset value

As of June 30, 2022, the Company's net asset value was $0.15 per share (December 31, 2021 - $0.21 per share), while the Company's common shares traded at $0.05 per share (December 31, 2021 - $0.07 per share). The Company believes that the market price of its common shares may not reflect their underlying value. Under the NCIB program, the Company has been repurchasing and cancelling its common shares and believes it is an appropriate use of the Company's funds to benefit all remaining shareholders by increasing their equity interest in the Company.

2. Investments at Fair Value

The fair values of financial instruments with quoted bid and ask prices are based on the price within the bid-ask spread that is most representative of fair value and may include closing prices in exchange markets. The Company considers the closing share price of investments issued by public entities at each reporting date as the fair value. Also, the Company applies the Black Scholes option pricing model to value public companies' share purchase warrants at the reporting date.

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The Company has the following investments as of June 30, 2022:
	Number of Shares/Units Held	Fair value
Equities of public resource companies:	#	$
Top ten resource companies by fair value
-Minco Silver Corp. (i)	11,000,000	1,980,000
-Asante Gold Corp.	333,334	533,440
-Amerigo Resources	278,900	345,836
-Western Alaska Minerals Corp.	109,069	172,329
-Global Lithium EFT	1,750	163,604
-NEO Performance Metals	11,000	136,730
-Solaris Resources Inc.	16,230	121,076
-Cobalt Blue Holding	200,000	104,454
-Sherritt International Corp.	250,000	102,500
-Rare Element Resources	120,000	94,325
Others	various	1,720,305
Equities of a private company (EL Olivar) (ii)	400,000	-
Debentures:
-Convertible debenture: IBC Advanced Alloys 8.25%	100,000	70,000
Trust units
-Sprott Physical Platinum & Palladium Trust	6,050	100,179
Equity, total		5,644,778
Share warrants, various		514,000
Total		6,158,778

The Company has the following investments as of the six months ended June 30, 2022:

1. As of June 30, 2022, the Company held 11,000,000 common shares of Minco Silver Corporation ("Minco Silver"), which was approximately 18% of Minco Silver's number of outstanding shares (December 31, 2021 - 11,000,000 common shares about 18% ownership). As of June 30, 2022, the market price closed at $0.18 per share (December 31, 2021 - $0.33 per share).
2. On December 22, 2016, the Company acquired 5.90% or 400,000 units ("Unit') of El Olivar Imperial SAC ("El Olivar"), a privately held Peruvian corporation, at US$1.00 per Unit through a private placement. Each Unit consists of one Class A voting preferred share and 1.5 Class A share purchase warrant (the "EI Warrant"), with each warrant entitling the holder to purchase one additional Class A voting share for US$1.00. Such warrants expired in 2019.

As part of the consideration for the investment in El Olivar, the Company was entitled to receive an annual cash dividend in U.S. dollars equal to 6% of the total invested amount, calculated from the closing date of investment and payable starting on June 22, 2018. However, due to delays in project construction, no dividends have been paid. The Company has not accrued the dividend receivable given that El Olivar has not started its operations and the timing and structure of the initial dividend payment are uncertain.

In accordance with Level 3 of the fair value hierarchy, the Company impaired its investment of $515,440 (US$400,000) in El Olivar in 2009. During the six months ended June 30, 2022, there was no change in management's assessment, and this investment remains impaired.

One company director is also a director, an officer, and a significant shareholder of El Olivar.

The continuity schedule of the Company's investments during the six months ended June 30, 2022, is as follows:

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			Proceeds
	December 31,		from	Realized	Unrealized	June 30,
	2021	Additions	dispositions	Gains	losses	2022
Investment in public entities:	$	$	$	$	$	$
- Shares and partnership units	8,406,971	409,425	(864,354)	169,881	(2,647,324)	5,474,599
- Share purchase warrants	436,000	17,800	-	-	60,200	514,000
Investment in trust units:	104,621	-	-	-	(4,442)	100,179
Convertible debenture:
- IBC Advanced Alloys Corp.	95,000	-	-	-	(25,000)	70,000
Total	9,042,592	427,225	(864,354)	169,881	(2,616,566)	6,158,778

3. Results of Operations

Below is a discussion of the Company's operating results for the three and six months ended June 30, 2022, and 2021:

3.1 Operating result comparison for the three months ended June 30, 2022, and 2021

Three months ended June 30,	2022	2021	Change
	$	$	$
Dividend and interest income	12,990	5,512	7,478
Realized gain from investments	2,499	36,212	(33,713)
Unrealized gain (loss) from investments	(2,672,572)	598,322	(3,270,894)
	(2,657,083)	640,046	(3,297,129)
Operating expenses	(102,364)	(113,781)	11,417
Foreign exchange gain (loss)	2,892	(10,905)	13,797
Net income (loss)	(2,756,555)	515,360	(3,271,915)

The amount of gain and loss of the investments depends on the performance of the entities that the Company invests in and will fluctuate from time to time depending on many factors, including but not limited to the overall economy, foreign exchange rate, metal prices, which are not controlled by the Company.

During the three months ended June 30, 2022 ("Q2, 2022"), the market value of the Company's investment portfolio decreased by $3,271,000 compared to the same period of the prior year. The change in the share price of Minco Silver has a significant impact on the Company's performance.

The fair market value of Minco Silver was $1,980,000 at $0.18 per share as of June 30, 2022, compared to $5,500,000 million at $0.50 per share as of June 30, 2021. As a result, the fair market value of Minco Silver decreased by $3,520,000 million compared to the same period in 2021.

During Q2, 2022, $2,657,000 of the unrealized loss from investments was mainly due to the reduction in the market value of Minco Silver by $1,210,000 ($1,980,000 at $0.18 per share on June 30, 2022, vs. $3,190,000 at $0.29 per share on March 31, 2022), and the market value of other investments in the portfolio by $1,447,000.

The movement in connection with the operating expenses and foreign exchange loss is discussed in sections 3.1.1 and 3.1.2, respectively.

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3.1.1 Operating Expenses for the three months ended June 30, 2022, and 2021

The Company's operating expenses for the three months ended June 30, 2022, and 2021 are as follows:

Three months ended June 30,		2022	2021	Change
	ref	$	$	$
Accounting and audit		6,308	5,646	662
Amortization		10,420	9,366	1,054
Consulting	a	20,625	13,125	7,500
Directors' fees		8,000	7,000	1,000
Interest expense		753	1,351	(598)
Investment evaluation and management		13,632	10,814	2,818
Legal and regulatory		9,210	10,625	(1,415)
Office and administration		7,892	6,317	1,575
Salaries and benefits	a	23,247	30,171	(6,924)
Share-based compensation	b	-	18,559	(18,559)
Travel and transportation		2,277	807	1,470
		102,364	113,781	(11,417)

The operating expenses decreased by $11,000 during Q2, 2022, compared to the same period of the prior year, mainly due to the reasons below:

(a). In December 2021, the Company announced a management change. As a result, consulting fees increased by $7,500 while the salaries and benefits decreased by $7,000 in Q2, 2022, compared to the same period of the prior year.

(b). Share-based compensation fluctuates yearly depending on the timing and fair value of options vested each year. The Company recorded $Nil of share-based compensation in Q2, 2022 (2021 - $19,000).

3.1.2 Foreign exchange loss

The Company holds cash and investments denominated in US dollars from time to time. US dollar appreciated against Canadian dollars by 3.1% in Q2, 2022 (2021 - depreciated 1.4%). As a result, the Company recorded $3,000 of foreign exchange gain in Q2, 2022 (2021 - a loss of $8,000).

3.2 Operating result comparison for the six months ended June 30, 2022, and 2021

Six months ended June 30,	2022	2021	Change
	$	$	$
Dividend and interest income	31,050	8,919	22,131
Realized gain from investments	169,881	117,057	52,824
Unrealized loss from investments	(2,616,566)	(132,817)	(2,483,749)
	(2,415,635)	(6,841)	(2,408,794)
Operating expenses	(200,901)	(235,602)	34,701
Foreign exchange loss	(430)	(19,633)	19,203
Net loss	(2,616,966)	(262,076)	(2,354,890)

The amount of gain and loss of the investments depends on the performance of the entities that the Company invests in and will fluctuate from time to time depending on many factors, including but not limited to the overall economy, foreign exchange rate, metal prices, which are not controlled by the Company.

Please refer to Section 3.1 for the discussion of unrealized loss from investments.

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