Tower Resources : Financial Statements

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the Three Months Ended January 31, 2023

TOWER RESOURCES LTD.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED JANUARY 31, 2023

Description of Management's Discussion and Analysis

The purpose of this Management's Discussion and Analysis ("MD&A") is to explain management's point of view regarding the past performance and future outlook of Tower Resources Ltd. (the "Company" or "Tower"). The following MD&A provides a review of activities, results of operations and the financial condition of the Company for the three months ended January 31, 2023. This MD&A should be read in conjunction with the Company's condensed interim financial statements and related notes for three months ended January 31, 2023 ("Financial Statements") and the audited financial statements and related notes thereto for the year ended October 31, 2022. The following discussion is dated and current as of April 3, 2023. This MD&A contains forward-looking information and statements which are based on the conclusions of management. The forward- looking information and statements are only made as of the date of this MD&A.

All financial information in this MD&A has been prepared in accordance with International Financial Reporting Standards ("IFRS") and all dollar amounts are expressed in Canadian dollars unless otherwise indicated.

The Company's certifying officers, based on their knowledge, having exercised reasonable diligence, are responsible to ensure that these filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by these filings, and these Financial Statements together with the other financial information included in these filings. The Board of Directors approves the Financial Statements and MD&A and ensures that management has discharged its financial responsibilities. The Board's review is accomplished principally through the Audit Committee, which meets periodically to review all financial reports, prior to filing.

Forward Looking Statements

Certain disclosures contained in this MD&A may constitute forward-looking information. This is information regarding possible events, conditions or results of operations of the Company that is based upon assumptions about future economic conditions and courses of action which is inherently uncertain. All information other than statements of historical fact may be forward-looking information.

Forward-looking information is subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, risks and uncertainties relating to the interpretation of drill results and the estimation of mineral resources, the geology, grade and continuity of mineral deposits, the possibility that future exploration and development results will not be consistent with the Company's expectations, and the outbreak of an epidemic or a pandemic, including the recent outbreak of the novel coronavirus (COVID-19), or other health crisis and the related global health emergency affecting workforce health and wellbeing. Some other risks and factors which could cause results to differ materially from those expressed in the forward-looking information contained in this MD&A are described under the heading "Risks and Uncertainties".

Readers are cautioned that any such listings of risks are not, and in fact cannot be, complete. Although the Company has attempted to identify important factors that could cause actual events and results to differ materially from those described in the forward-looking information, there may be other factors that cause events or results to differ from those intended, anticipated or estimated. The Company believes the expectations reflected in the forward-looking information are reasonable, but no assurance can be given that these expectations will prove to be correct and readers are cautioned not to place undue reliance on forward-looking information contained in this MD&A.

The forward-looking information contained in this MD&A is provided as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as otherwise required by law. All of the forward-looking information contained in this MD&A is expressly qualified by this cautionary statement.

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TOWER RESOURCES LTD.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED JANUARY 31, 2023

Description of Business and Discussion of Operations

The Company is incorporated under the Business Corporations Act (British Columbia) and is listed on the TSX Venture Exchange ("TSX-V") under the symbol TWR. The principal business of the Company is the acquisition and exploration of mineral exploration and evaluation assets in British Columbia, Canada.

The Company is a Canadian based mineral exploration company focused on the discovery and advancement of economic mineral projects in the Americas. The Company's key exploration assets are located in British Columbia, Canada. They include the Rabbit North copper‐gold porphyry project located between the New Afton and Highland Valley Copper mines, the Nechako Gold project near Artemis' Blackwater project, the Belle copper-gold porphyry project in the Toodoggone district, and the More Creek gold project in the Golden Triangle area.

The Company's current exploration focus is for gold and porphyry copper-gold deposits at Rabbit North and gold-silver deposits on its Nechako Gold property.

Overall performance

Operating expenses for the three months ended January 31, 2023 were $166,320 versus $77,529 in the comparative period ended January 31, 2022. Expenses have remained relatively consistent, with the exception of investor relations and share- based compensation, as the Company continues to minimize operating costs and conserve its cash for advancing the Rabbit North and Nechako Gold projects. Changes are further discussed in the "Results of Operations" section.

The Company had a net increase in cash of $172,319 during the three months ended January 31, 2023, for a cash balance as at January 31, 2023 of $1,542,223. The increase in the current period is primarily attributable to funds received from the issuance of shares, which was reduced by work performed on Rabbit. Refer to the "Summary of Exploration Activities" for discussion of the expenditures and properties.

Corporate activities

From November 1, 2022 to the date of this report, the Company issued no common shares pursuant to the exercise of warrants.

From November 1, 2022 to the date of this report, the Company issued 91,666 common shares, for proceeds of $16,500, pursuant to the exercise of stock options.

In December 2022, the Company issued 3,888,889 units for gross proceeds of $700,000, pursuant to a private placement financing. Each unit was comprised of one flow-through common share and one share purchase warrant, with each warrant entitling the holder to acquire one additional common share of the Company at an exercise price of $0.36 per share for a period of 24 months. 233,333 finder's warrants were issued, with each warrant entitling the holder to acquire one additional common share of the Company at an exercise price of $0.18 per share for a period of 24 months.

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TOWER RESOURCES LTD.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED JANUARY 31, 2023

Summary of Exploration Activities

During the three months ended January 31, 2023, the Company incurred $79,814 in exploration and evaluation asset expenditures compared to $305,804 for the corresponding three months ended January 31, 2022.

The following is a breakdown of the components of the Company's exploration and evaluation assets, on a property by property

basis, for the three months ended January 31, 2023:

Balance, October 31, 2022	1	4,130,383	2,483,939	-	6,614,323
Acquisition costs	-	-	-	-	-
Deferred costs
Consulting	-	4,500	-	-	4,500
Equipment rental	-	360	-	-	360
Field travel, meals, and accommodations	-	6,006	-	-	6,006
Geology	-	17,836	-	-	17,836
Laboratory and analytical	-	45,436	49	-	45,485
Project supplies and fuel	-	5,627	-	-	5,627
Additions for the period	-	79,765	49	-	79,814
Balance, January 31, 2023	1	4,210,148	2,483,988	-	6,694,137

Rabbit North property

The Rabbit North property, acquired in 2013, is comprised of 34 mineral tenures covering 16,400 hectares of which 2,850 hectares were optioned from private individuals and the remainder were staked by the Company. The staked claims are known as the Rabbit North Extension property. The Company earned a 100% interest in the optioned portion by making cash payments of $170,000, issuing 1,300,000 common shares, and funding aggregate exploration expenditures of $2,150,000. The vendors also hold a 3% net smelter return royalty ("NSR"), of which 1% of the 3% may be purchased by the Company for $2,000,000 and the second 1% of the 3% may be purchased by the Company for $1,500,000. In March 2017, the Company entered into a royalty buyback assignment agreement with Sandstorm Gold Ltd. ("Sandstorm") pursuant to which it assigned to Sandstorm the Company's right to purchase the second 1% of the Company's 2% buyback rights with respect to the optionors' NSR. Under the terms of the agreement, the Company received $50,000. If the Company makes a decision to develop the Rabbit North property and put it into production, the Company has agreed to exercise its right to buy back 1% of the NSR, contingent upon Sandstorm exercising its right to buy back the second 1% (as assigned to it), whereupon the Company will grant directly to Sandstorm a 1% NSR. As at October 31, 2022, the Company had paid a total of $150,000 in advance annual royalty payments. In March 2017, the Company entered into a NSR agreement with Sandstorm. Under the terms of the agreement, the Company received $150,000 in return for granting Sandstorm a 2% NSR on the Rabbit North Extension property. The Company will have the option to buy back 1% of the NSR from Sandstorm for cash consideration of $500,000.

The property is located in the Kamloops mining district in south-central B.C., between the New Afton underground porphyry Cu-Au mine and the Highland Valley open pit porphyry Cu mine. It is centered on the alkalic Durand Stock which measures 2 x 3 km and is compositionally similar to and of the same age as (Late Triassic to Early Jurassic) the intrusion that hosts the New Afton deposit. Previous exploration within the stock identified several zones of porphyry Cu-Au mineralization that appear to be of limited size and grade but drilling by the Company in 2017 on a magnetic anomaly - the Western Magnetite Zone - encountered stronger and more continuous mineralization in the volcanic rocks along the western margin of the stock, including 247 metres of 0.51% Cu and 0.34 g/t Au in hole RN17-015.

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TOWER RESOURCES LTD.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED JANUARY 31, 2023

Summary of Exploration Activities (continued)

Rabbit North property(continued)

In May 2021, the Company completed a 137-sample till heavy mineral survey on the Rabbit North property with the goal of using the gold grain content of the heavy mineral concentrates to quickly and selectively identify any hidden, till-covered,porphyry-typeCu-Au deposits having a high economic potential. Samples weighing approximately 10 kg were collected at 200-250 m intervals along traverses 1-2 km apart and oriented northeast-southwest across the southeast ice flow path in which the gold grains were transported during glaciation 10,000 years ago. Such a wide sample spacing is normal for an initial, reconnaissance-type gold grain survey because the method is so sensitive and deposit-specific that it can reliably detect significant Cu-Au zones located several kilometres up-ice.

Of the 137 samples, 84 were collected either directly over or close to the Durand Stock on the Rabbit North property. An unusually strong, 600-grains-per-sample gold anomaly was identified in two consecutive samples 200 m apart in a till-covered area immediately north of Dominic Lake, the largest lake on the property. Geologically, the gold anomaly was several hundred metres southwest of the stock in an area where no historical drilling had been done. The bedrock source of the gold grains was estimated to be just 200-500 m up-ice and, if of the circular porphyry type, to be 300 m in diameter. More closely spaced till sampling was planned for Q4, 2021, to further refine this target in preparation for an initial diamond drill test.

The remaining 53 samples tested the Southern Extension portion of the Rabbit North Extension property. The eastern half of the Southern Extension is 10 km directly down-ice from the Durand Stock. This is reflected in the gold grain content of the till, with most samples yielding 25-100 grains compared to the expected background level of less than 10 grains.

Roughly 50% of the samples collected on the western half of the Southern Extension yielded similarly elevated gold grain values, suggesting that the up-ice area on the Western Extension claims, west of the Durand Stock, is also fertile for porphyry Cu-Au deposits. An initial reconnaissance-scale till survey was proposed for this area.

The proposed follow-up till sampling was performed in October, the final month of the Company's 2021 fiscal year. Twenty- four infill samples were collected in a 600 m long corridor up-ice from the strong, 600-grain gold anomaly on the Core Claims. The samples were collected at 100 m intervals on three lines spaced 200 m apart, and were processed immediately on a priority basis.

The initial gold grain anomaly was found to have a width of 300 m and to maintain its strength for 600 m up-ice to the limit of sampling, defining a classic dispersal train stronger than any known trains from porphyry Cu-Au deposits. The dispersal train was named the Dominic Lake Train due to its proximity to the lake. The till hosting the train was estimated to be at least 20 m thick but known to thin out against a bedrock ridge 400 m further up-ice, limiting the potential gold source to this covered 400 m corridor. Follow-up diamond drilling was recommended to locate the indicated gold or copper-gold zone.

Seventy-nine till samples were collected on the Western Extension claims at a wide reconnaissance spacing similar to that previously used on the Southern Extension.

The recommended follow up diamond drilling on the Dominic Lake Train was performed in December 2021. Four holes totalling 875 m were completed. Drilling commenced at the northwest (up-ice) limit of sampling on the gold grain dispersal train and stepped further northwest in 100 m increments. The third hole, designated RN21-026 because it was the 26th hole drilled by Tower since acquiring the property in 2013, successfully located the source of the gold grains and showed that it is a shear-hosted gold zone rather than the porphyry copper-gold type of deposit for which the Rabbit North property is historically known. Hole RN21-026 encountered a 95 m mineralized interval averaging 1.40 g/t Au including 19.2 m averaging 4.21 g/t Au.

The gold grain results for the 79 till samples collected on the Western Extension claims were received in Q1 2022 and the geochemical analyses were received in Q2. Together they confirmed that the eastern part of the Western Extension and adjoining westernmost Core Claims, west of the Durand Creek Fault which was previously thought to truncate the gold trend, are as gold-fertile as the Durand Stock area east of the fault. The most continuous gold grain anomaly, alongside the fault, was named the Durand Creek Train. Infill till sampling was proposed on this gold dispersal train to establish specific drill targets.

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