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PJX Resources : September 30, 2020 Management Discussion and Analysis

12/03/2020 | 05:23pm EST

PJX RESOURCES INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the three and nine months ended September 30, 2020 and 2019

PJX RESOURCES INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following discussion and analysis ("MD&A") of the operating results and financial condition of PJX Resources Inc. ("PJX" or the "Company") for the three and nine months ended September 30, 2020 ("Q3 F2020") and September 30, 2019 ("Q3 F2019") should be read in conjunction with the unaudited condensed interim financial statements of the Company and notes thereto at September 30, 2020.

The unaudited condensed interim financial statements were prepared in accordance with International Financial Reporting Standards ("IFRS"). All monetary amounts are expressed in Canadian dollars.

The date of this report is November 23, 2020.

Approval

The Board of Directors of the Company has approved the disclosure contained in this MD&A.

Forward-looking Information

The Company's MD&A contains statements that constitute "forward-looking statements" within the meaning of National Instrument 51-102,Continuous Disclosure Obligations of the Canadian Securities Administrators. Forward-looking information includes, but is not limited to, information concerning PJX's exploration programs as well as PJX's strategies and future prospects. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or statements t hat certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Assumptions upon which such forward- looking information is based include, without limitation, availability of skilled labour, equipment, and materials. Many of these assumptions are based on factors and events that are not within the control of PJX and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking information include changes in market conditions, variations in ore reserves, resources, grade or recovery rates, risks relating to operations (including legislative, political, social, or economic developments in the jurisdictions in which PJX operates), economic factors, government regulation and approvals, environmental and reclamation risks, actual results of exploration activities, fluctuating metal prices and currency exchange rates, costs, changes in project parameters, conclusions of economic evaluations, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and the availability of skilled labour, failure of plant, equipment or processes to operate as anticipated, capital expenditures and requirements for additional capital, risks associated with internal control over financial reporting, and other risks of the mining industry as well as those risk factors discussed in the Long Form Prospectus of PJX available at www.sedar.com .Although PJX has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. PJX undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking information.

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 2 of 21

Nature of Operations and Going Concern

PJX is a Canadian corporation with corporate offices located at 5600 One First Canadian Place, Toronto, Ontario. The Company is listed on the TSX Venture Exchange.

The principal activities of the Company are mineral exploration on properties located near Cranbrook, British Columbia. The Company is considered to be in the exploration stage, has no producing properties and, consequently, has no current operating income or cash flow. Financing of the Company's activities to date has been obtained from equity issues.

Although the Company has taken steps to verify title to the properties on which it is conducting exploration and in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company's title. Property title may be subject to government licensing requirements or regulations, social licensing requirements, unregistered prior agreements, unregistered claims, aboriginal claims, and non-compliance with regulatory and environmental requirements. The Company's assets may also be subject to increases in taxes and royalties, renegotiation of contracts, expropriation of properties, and political uncertainty.

The condensed interim financial statements have been prepared using generally accepted accounting principles applicable to a going concern, which contemplate the realization of assets and settlement of liabilities in the normal course of business as they come due in the foreseeable future. For the nine months period ended September 30, 2020, the Company incurred a loss of $1,121,635 or $0.01 per share, (September 30, 2019: 2,225,602 or $0.02 per share), and reported an accumulated deficit of $17,251,931 (September 30, 2019: $15,831,238). As at September 30, 2020 the working capital of the Company was $1,032,437 (December 31, 2019: $1,068,275).

Additional financing is currently required to allow the Company to continue operating and to fund its planned exploration and development programs. The Company will continue to explore financing alternatives to raise capital. Although PJX has been successful in these activities in the past, the Company has no assurance on the success or sufficiency of these initiatives in the immediate future or that such financing will be available on acceptable terms. The above conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern.

The Company's condensed interim financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary if the going concern assumption were inappropriate, and these adjustments could be material.

COMPANY OVERVIEW

The Company's goal is to build shareholder value and community opportunity through the exploration, discovery, and development of mineral resources.

The Company holds 100% interest in 8 properties (the Vine, Gold Shear, DD, Eddy, Parker Copper, Zinger, Dewdney Trail, and West Basin). All properties are road accessible and proximal to power, rail and workforce in the Sullivan base metal and placer gold mining district.

Highlights for Q3 F2020

Corporate

On August 12, 2020, the Company announced the appointment of Mr. Vic Bradley to the Company's Board of Directors. Mr. Bradley is well respected for his many years of experience and knowledge in the mining industry. He founded Yamana Gold Inc. in early 1994 and served as President/CEO and then Chairman of the Board and Lead Director until 2008. He served as Chairman of Osisko Mining Corp from November 2006 up to its sale for $4.1 billion to Agnico Eagle and Yamana in June, 2014. He now serves as Chairman of Osisko Bermuda Ltd., Osisko Gold Royalties' offshore subsidiary that controls all of its assets outside of

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 3 of 21

North America. Vic has a long-standing history and familiarity of southeastern British Columbia and the Company looks forward to working with him to capitalize on PJX's gold and silver-lead-zinc potential in the Vulcan Gold Belt and Sullivan base metal mining camp.

Financial

On August 12, 2020, the Company announced:

  • the extension of the exercise period of a total of 6,833,284 outstanding share purchase warrants, (collectively, the "Warrants"). The new expiration date of the Warrants is on August 29, 2021.
  • the grant of 2,792,500 stock purchase options to certain directors, employees and consultants to acquire common shares at an exercise price of $0.20, expiring August 11, 2025.

On September 21 2020, the Company announced the undertaking of a non-brokered private placement of up to eight million units, with a 25% overallotment option at the discretion of the Company, through the issuance of Flow Through ("Flow Through Unit") and Non-flow Through Units ("Unit") at a price of $0.15 per Flow Through Unit and $0.125 per Unit respectively.

On October 2, 2020, subsequent to the period end, the Company announced the successful closing of the private placement for total proceeds of $1,230,800. The Offering was oversubscribed and the previously announced 25% overallotment option was undertaken.

Exploration

PJX continued exploration programs while following Center for Disease Control and BC Government health guidance in relation to the Coronavirus " COVID-19" pandemic.

Gold Potential

Gold exploration focused on mapping and prospecting the Gold Shear and Eddy Properties to increase our understanding of geological controls for gold mineralization in the Vulcan Gold Belt. This work is being used to help develop drill targets in advance of drilling this Fall to explore for the continuation of high-grade gold mineralization on strike and at depth of the David Gold Zone on the Gold Shear Property

In June 2020, the Company acquired 100% interest in the David 6 Claim that is on strike with the high-grade David Gold Zone on the Gold Shear Property. This acquisition allowed PJX to expand mapping, prospecting and geophysics to the south and on strike with the David Gold Zone during Q3.

PJX now owns 100% of the mineral rights to over 20 kilometres ("km") of favourable geology with potential to host multiple gold discoveries. Multiple gold zones have been identified by PJX's prospecting and mapping along the 20 km trend that have not yet been tested by drilling.

Base Metal Potential (zinc, lead, silver, copper): DD Property

Management believe that, regionally, the DD Property has the next best potential, after the Vine Property, to host a Sullivan type (zinc, lead, silver) massive sulphide deposit.

  • In July, 2020, PJX announced the signing of a definitive Option Agreement (the "Agreement") with
    DLP Resources Inc. ("DLP"), the wholly owned subsidiary of MG Capital Corporation, whereby DLP can earn up to 75% of the DD Property. Details of the Agreement can be found on page 7 in the Mineral Properties section of this document.
  • In August, 2020, the Company announced that DLP completed drilling the extension of the original PAN-18-01 hole on the DD Property, which was recently optioned from PJX Resources Inc.
  • Although no significant zinc mineralization was observed in the moderately to intensely altered siltstones of the Sullivan Horizon there is a possibility that PAN-18-01 is in a distal part of a mineralized system.

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 4 of 21

  • During the latter part of Q3 and into Q4, 2020, Quantec Geophysics carried out an expanded Magnetotelluric survey across the DD Property. Results of this survey are pending and will be used along with existing survey data to define potential targets to drill.

Strategy and Objectives

PJX's strategy is to generate value and opportunity for shareholders and local communities by using innovative technology and approaches to explore and develop areas with high potential for world class gold and base metal deposits.

The Company has strategically consolidated the mineral rights to over 50,000 hectares (500 square km) of land in the Sullivan (zinc-lead-silver) mining district and the Vulcan Gold Belt. The Company has collected and compiled an estimated $20 million of historical data. New exploration technologies and more advanced mapping and sampling techniques have been used to fill gaps in the data that can be used to vector exploration toward discovering one or multiple deposits. This work has identified over 20 new gold and base metal target areas to explore and test by drilling. The Company is now systematically testing these target areas for gold, zinc, lead, silver or copper deposit potential. The Company also continues to develop strategic partnerships to help advance the exploration and discovery potential of the many target areas.

Key Performance Drivers

The ability of the Company to continue exploration is dependent on the ability to raise capital in the market. Equity capital interest in PJX depends on the price of gold and other metals, exploration results and the market's appetite for risk.

Market volatility, the price of metals and the appetite for risk cannot be controlled by the Company. Demand for gold, silver and base metals is forecasted to continue to grow in the long term, while supply for some metals, such as zinc, is expected to decline as a number of mines have closed and new world class deposits are not being discovered. Economic downturn in response to the COVID-19 pandemic during 2020 is expected to continue to result in softening demand for base metals. Sale of metal from stockpiles may also be placing downward pressure on base metal prices in the short term. However, base metal prices are expected to rise as economies recover and prices may spike to new highs due to potential stockpile shortages. Gold and Silver markets may strengthen and possibly rise significantly in the short term in response to current economic, social and potential political challenges. Overall, metal prices are expected to strengthen in the long term as economies recover, trade war concerns are resolved, market volatility lessens and demand for metals increases in step with expanding economies.

The Company has assembled a team with more than 150 years of working experience in the mining and exploration industry and meeting its related challenges. Management believes it is well positioned to attract investor interest given its 100% interest in a large land package with favourable geology to host world class deposits in a proven mining camp. The prime objective of the Company is to focus resources on exploration activities to discover a gold or base metal deposit.

Ability to Deliver Results

In addition to legal and capital market expertise, PJX's Board is made up of members with experience in all aspects of the minerals and metals industry from early stage exploration through to production stage companies. In order to advance its exploration projects effectively, the Company contracts experienced mineral exploration professionals with many years of working experience specific to our geographic regions of interest.

MINERAL PROPERTIES

PJX has consolidated 100% of the mineral rights to the largest land package in the 60 km long Vulcan Gold Belt of the Sullivan Mining District. Four properties (Dewdney Trail, Zinger, Eddy, and Gold Shear) cover historical gold showings and have the potential to host large tonnage and/or high-grade gold deposits. The

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 5 of 21

Vine, DD, Parker-Copper, and West Basin properties have zinc, lead, copper and/or silver and gold showings with the potential to host massive sulphide deposits similar in style to the Sullivan zinc-lead-silver deposit or sediment-hosted copper deposits such as Montanore, Spar Lake or possibly Kamoa.

PJX plans to focus on drilling to test high-grade gold mineralization on the Gold Shear Property and Sullivan type zinc-lead-copper-silver potential on the Vine Property. The company also continues to identify new gold showings and advance existing gold and/or base metal targets toward a drill ready stage on other properties. DLP Resources Inc. an option to earn an interest in the DD Property by exploring for a Sullivan type target.

A summary of the Company's properties appears below. Please visit www.pjxresources.comfor additional information.

Gold Shear Property

- Historical and recent exploration support the potential for shear zone hosted, orogenic type, high- grade gold mineralization.

  • The high-grade David Gold Zone was first discovered in 1990 by prospecting.
  • Eight of 12 rock grab samples taken by PJX from the David Gold Zone at surface have over 68 grams per tonne ("g/")t gold, the highest is 193.90 g/t gold.
  • PJX's surface mapping, and compilation of historical 1990 drilling by Dragoon Resources Ltd, suggest that high-grade gold mineralization may occur as elongated zones that plunge to the north within the north trending David Shear.
  • Drilling in late 2019 confirmed the high-grade nature of gold mineralization in the David Shear. Six of nine holes drilled intersected strong gold mineralization with the highest grade being 54.77 g/t gold over one metre.
  • Geophysics indicates an area of increased conductivity at depth below the level of drilling and this area may represent a bend or break in the David Shear. Structurally controlled gold deposits often occur at bends or dilations in a shear.
  • The high-grades and widths of gold mineralization intersected on the Gold Shear Property are similar to grades and widths intersected proximal to orogenic type gold deposits elsewhere, such as
    Wallbridge's new Fenelon discovery in Quebec.
  • Additional drilling is planned to extend the current high-grade gold zone down plunge to the north and test for additional gold zones at depth where the shear may bend or dilate and form a gold deposit.

Vine Property

  • The Vine Property occurs within a sedimentary basin called the Vine Basin that is geologically similar to the Sullivan Basin hosting the Sullivan deposit located about 35 km to the north.
  • Exploration supports the potential for a massive sulphide (zinc, lead, copper, silver) discovery similar in style to a Sullivan Type or Broken Hill type deposit.
  • Drilling newly identified MT conductive geophysical targets, in 2019, intersected a New Massive Sulphide (NMS) Zone for the first time within a large East Gravity target area.
  • Four layers of conductive massive sulphide mineralization totalling 3.5 metres within the 5.5 metre wide NMS zone were intersected in a geological setting somewhat similar to the Sullivan Deposit.
  • The NMS zone has classic Durchbewegt texture that is similar in style to massive sulphide mineralization located within 1000 metres of the economic part of the Sullivan deposit.
  • Down hole EM (electromagnetic) geophysics suggests the NMS zone continues on strike to the south and west.
  • In the 1980s, Cominco believed that massive sulphide mineralization (zinc, lead, copper, silver, and gold) found at surface in the Vine vein may represent remobilized mineralization from depth. Cominco drilled to test the Sullivan horizon at depth and did not encounter massive sulphide mineralization. PJX's newly discovered NMS zone occurs 300 metres below the depth of Cominco's drilling.

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 6 of 21

    • A hole drilled by Kokanee Exploration in 1990 intersected a 3.4 metres wide massive sulphide zone, with bedded and Durchbewegt textures, approximately 700 metres south of PJX's drill hole. PJX's management and consulting geologist believe that both holes intersected the same geologic horizon hosting the NMS zone.
      • Drilling during Q1 to test the NMS horizon intersected a fault at target depth that offset the NMS horizon.
      • This newly identified syn-rift fault combined with other faults from surface mapping have, for the first time on the Vine Property, defined a similar pattern to syn-rift faults that controlled the formation of massive sulphide mineralisation at the Sullivan deposit.
    • This is a significant step in further defining the geological basin (called a graben) that could host a potential Sullivan deposit.
    • Expanded MT geophysics supports the potential that the NMS zone may extend for over 3 km to the west.
    • Additional drilling is planned to test the NMS zone between existing holes and to the west. The large target area is sufficient in size to host a Sullivan type deposit.
  1. Property
    • The DD Property occurs within a sedimentary basin, called the Panda Basin, that is geologically similar to the Vine Basin and to the Sullivan Basin that is located about 45 km to the northeast.
    • The Sullivan Deposit occurs at a geological horizon called the LMC (Lower-Middle Aldridge Contact).
    • No holes have tested the LMC horizon on the DD Property.
    • Historic holes drilled to test the LMC horizon in the vicinity of the DD Property have encountered geology that supports the potential for a Sullivan Type Deposit.
    • The thickness, alteration and anomalous zinc-lead mineralization of the LMC horizon progressively increases the closer holes are drilled to the DD Property. A similar increase in thickness, alteration and anomalous zinc-lead mineralization in the LMC horizon occurs in proximity to the Sullivan Deposit in the Sullivan Basin.
    • This points to the DD Property as the location with the best potential to host a Sullivan Type deposit in the Panda Basin.
    • From May 2016 to November 2019, Teck had an option to acquire an interest in the DD Property.
    • One 1425-metre-longsub-vertical hole (Pan-18-01), drilled by Teck in 2018, stopped short of the LMC horizon, in a gabbro sill rock unit, and needed to be extended.
    • On July 20, 2020, PJX announced signing an agreement granting DLP Resources Inc. an option to earn an interest in the DD Property according to the following terms:
      • DLP to earn a 50% undivided interest in the DD Property by spending $4 million in exploration expenditures and making a total of $250,000 cash payments to PJX over 48 months of the effective date of the agreement.
      • DLP will have the right to earn an additional undivided 25% interest (75% total interest) by delivering a bankable commercial feasibility study on the DD Property within 96 months of the effective date of the agreement.
      • Upon DLP's exercise of the Option and acquisition of a 50% or 75% interest in the DD
        Property, as applicable, the parties will enter into a joint venture agreement for the further development of the Property.
      • Should DLP elect to earn the additional 25%, PJX will not incur additional costs until a production decision is made and information is provided to PJX enabling the Company to secure bank financing of PJX's portion of the cost to go into production.
    • In August, 2020, PJX announced that DLP completed drilling the extension of the original PAN-18-

    • 01 hole on the DD Property, which was recently optioned from PJX.
    • Although no significant zinc mineralization was observed in the moderately to intensely altered siltstones of the Sullivan Horizon there is a possibility that PAN-18-01 is in a distal part of a mineralized system.

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 7 of 21

  • During the latter part of Q3 and into Q4, F2020, Quantec Geophysics carried out an expanded Magnetotelluric survey across the DD Property. Results of this survey are pending and will be used along with existing survey data to define potential targets to drill.

Other Properties

Surface mapping, prospecting, sampling and/or geophysics were carried out during the year to identify new target areas and advance other existing gold, silver, zinc, lead or copper showings to a drill ready stage on other PJX Properties.

  • Three gold showings (MC, Hill Vein and Red Zone) were identified and explored on the Eddy Property. Rock grab or chip samples from outcrop returned high-grade gold mineralization up to 108 g/t gold from the Hill Vein, 34 g/t gold from the MC and a 45cm rock chip sample of 79 g/t gold from the Red Zone area. The newly identified showings have not been drilled. Additional high-grade gold mineralization has been found on strike with these showings. Eddy Property is adjacent to the Gold Shear Property and on-strike with the David Gold Zone.
  • In July 2019, PJX received a 5-year permit from the Government of British Columbia to drill and explore the multiple gold zones on the Gold Shear and Eddy Properties.
  • Zinger Property has high concentrations of gold in soil (898 visible gold grains in one sample) and in rock grab samples (up to 34 g/t gold) in outcrop along a 6 km structural trend. Re-evaluation of drilling suggests that gold may concentrate where vertical fold structures intersect sub-horizontal fold structures at depth.
  • Parker Copper Property was staked in late 2018 to cover new showings of sediment hosted copper mineralization. The alteration and style of copper mineralization is similar to sediment hosted copper deposits in correlative rocks in the United States and the Kamoa deposit in Congo. Prospecting in 2019 suggests the favourable copper horizon may continue down dip to the west and along strike to the north.
  • Compilation work suggests that the Zeus copper-cobalt breccia pipe on the adjacent Eddy Property may be part of a feeder system to the Parker Copper sediment-hosted copper mineralization.
  • Dewdney Trail Property mapping and prospecting have identified multiple target areas with gold and/or base metal (copper, lead, zinc) potential.

In conclusion, PJX remains focused on advancing priority gold, silver, zinc, lead, and copper targets with the potential to discover one or multiple deposits. Gold targets on the Gold Shear and Eddy Properties along with silver-zinc-lead-copper targets on the Vine and DD Properties are expected to continue to be the main focus for exploration in the short term.

RESULTS OF OPERATIONS

Exploration

The following schedule describes exploration expenses, segregated by nature, incurred by PJX for the three months period ended September 30, 2020 and 2019:

Three months ended September 30,

2020

2019

Change

Geology, geophysics and geochemistry

$

123,269

$

132,829

$

(9,560)

Land rights, claims and environment

-

8,231

(8,231)

Drilling

3,350

503,753

(500,403)

Laboratory

10,509

24,758

(14,249)

Camp cost and exploration supplies

403

1,037

(634)

Exploration - travel and transportation

3,518

7,272

(3,754)

Exploration- meals

3,069

3,150

(81)

Rent - field office

-

2,488

(2,488)

Insurances

1,424

-

1,424

Option payments (receipts)

-

7,250

(7,250)

Non-flow-through exploration expenses

20,009

641

19,368

$

165,551

$

691,409

$

(525,858)

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 8 of 21

The most significant changes during the three months ended September 30, 2020, when compared to the same period of Fiscal 2019 were:

  • A decrease of $9,560 in Geology, geophysics and geochemistry ("GGG") was due to a decrease in geophysical work of approximately $38,000 and a decrease in prospecting of approximately $18,000; partially offset by increases in general geological work of $23,000 and an increase in salary allocations of approximately $23,000;
  • The decrease in drilling expenses of $500,403 is mainly due to a decrease in drilling of $369,711 at the Vine Property and $130,692 at the Gold Shear Property. No material drilling activity was recorded during Q3 F2020.
  • The decrease in laboratory charges of $14,249 is principally composed by a decrease at the Eddy Property of approximately $17,000 partially offset by an increase at the Gold Shear Property of approximately $5,000;
  • Non-flow-throughexploration expenditures increased by $19,368 principally as a result of expenses not allowed by the BC Government on Company's 2018 Mineral Exploration Tax Credit ("METC") expenses.

The following schedule describes exploration expenses, segregated by nature, incurred by PJX for the nine months period ended September 30, 2020 and 2019:

Nine months ended September 30,

2020

2019

Change

Geology, geophysics and geochemistry

$

260,029

$

320,430

$

(60,401)

Land rights, claims and environment

5,590

11,844

(6,254)

Drilling

304,613

1,018,005

(713,392)

Laboratory

27,080

28,368

(1,288)

Camp cost and exploration supplies

981

5,602

(4,621)

Exploration - travel and transportation

13,244

26,308

(13,064)

Exploration- meals

4,740

6,643

(1,903)

Rent - field office

3,500

7,001

(3,501)

Insurances

4,272

-

4,272

Option payments (receipts)

27,050

34,375

(7,325)

Non-flow-through exploration expenses

29,040

8,089

20,951

$

680,139

$

1,467,825

$

(787,686)

The most significant changes during the nine months ended September 30, 2020, when compared to the same period of Fiscal 2019 were:

  • The decrease in GGG of $60,401 is composed by a decrease in geophysical expenses of approximately $121,000, and a decrease in prospecting of approximately 35,000, partially offset by an increase in general geology of approximately $28,000, an increase in geochemistry of approximately $13,000 and an increase in salary allocated of approximately $57,000;
  • The decrease in drilling of $713,392 is attributed to decreases in drilling at the Vine Property with a reduction of approximately $577,000, a reduction of $130,000 at the Gold Shear Property and a reduction of approximately $7,000 at the Zinger Property.
  • The decrease in Exploration - travel and transportation of $13,064 is related to the overall decrease in travelling activities resulting from the COVID-19 pandemic travel limitations, principally at the Vine Property;
  • Non-flow-throughexploration expenditures increased by $20,951 are principally as a result of expenses not allowed by the BC Government on Company's 2018 METC expenses.

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 9 of 21

The following schedule describes exploration expenses for each project for the three months period ended September 30, 2020 and 2019.

Three months ended September 30,

2020

2019

Change

Dew dney Trail Property

$

5,845

$

6,524

$

(679)

Eddy Property

24,682

53,541

(28,859)

Zinger Property

8,983

500

8,483

Vine Property

13,097

431,691

(418,594)

DD Property

-

7,250

(7,250)

Gold Shear Property

92,936

153,200

(60,264)

Parker Copper Property

-

38,703

(38,703)

Others

20,008

-

20,008

BC refundable tax credits received

$

165,551

$

691,409

$

(525,858)

The most significant changes are described below:

  • The decrease in exploration expenses at the Eddy Property of $28,859 relates to a decrease in GGG expenditures of approximately $13,000 and a decrease in laboratory of approximately $17,000;
  • The decrease of $418,594 at the Vine Property is composed of a decrease in geophysics of approximately $38,000, a decrease in drilling of approximately $370,000, a decrease in travel related expenses of approximately $6,000, and a decrease in rental charges allocations of approximately $2,000,
  • The decrease at the Gold Shear Property of $60,264 is composed of a decrease in drilling expenses of approximately $131,000, partially offset by increases in geology expenses of approximately $37,000, an increase in geophysics of approximately $10,000, an increase in laboratory expenses of approximately $5,000, an increase in prospecting charges of approximately $10,000, and an increase in salary allocations of approximately $8,000;
  • No work was done at the Parker Copper Property during the three months ended September 30, 2020, compared to $38,703 in 2019 primarily related to general geology of approximately $13,000, claim management expenses of $ 7,000 and prospecting work for approximately $17,000.

The following schedule describes exploration expenses for each project for the nine months period ended September 30, 2020 and 2019.

Nine months ended September 30,

2020

2019

Change

Dew dney Trail Property

$

16,495

$

28,810

$

(12,315)

Eddy Property

46,568

125,597

(79,029)

Zinger Property

9,283

23,036

(13,753)

Vine Property

428,113

1,045,836

(617,723)

DD Property

(14,250)

8,694

(22,944)

Gold Shear Property

164,892

186,632

(21,740)

Parker Copper Property

-

49,220

(49,220)

Others

29,038

-

29,038

$

680,139

$

1,467,825

$

(787,686)

The most significant exploration expense changes for the nine months ended September 30, 2020 when compared to the same period of Fiscal 2019, by project are as follows:

  • The decrease at the Dewdney Trail Property of $12,315 is composed of decreases in geological work for approximately $12,000 and in geophysics for approximately $8,000, all partially offset by an increase in prospective work of approximately $3,000 and an increase in geological reports for $5,000;
  • At the Eddy Property, the decrease of $79,029 is composed of a decrease in geophysics of

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 10 of 21

approximately $49,000, a decrease in laboratory of approximately $20,000 and a decrease in prospecting of approximately $33,000, all offset by an increase in salaries allocated of approximately $21,000;

  • The decrease of $13,753 at the Zinger Property is composed by a decrease of approximately $2,000 in geology, a decrease of approximately $1,000 in permitting, a decrease of $2,000 in claims management, a decrease of approximately $7,000 in drilling, a decrease of approximately $5,000 in geological reports and a decrease in travel related expenses for approximately $2,000, all partially offset by an increase of approximately $6,000 in prospecting work;
  • The decrease of $617,723 at the Vine Property is composed of a decreases of approximately $75,000 in geophysics, approximately $577,000 in drilling, approximately $5,000 in exploration supplies, approximately $13,000 in travel and transportation, approximately $2,000 in exploration meals, and a decrease of approximately $7,000 in training; all partially offset by increases of approximately $4,000 in geology, approximately $13,000 in geochemistry, approximately $15,000 in laboratory, approximately $26,000 in salary allocation and an increase of approximately $4,000 in insurance related charges;
  • The decrease of $22,944 at the DD Property is mainly due to option payment received from DLP Resources for $20,000 partially offset by option payments to the original DD optionors;
  • The decrease at the Gold Shear Property of $21,740 is mainly composed of a decrease in drilling for approximately $130,000, partially offset by increases in: geology of approximately $52,000, geophysics of approximately $10,000, laboratory for approximately $5,000, land rights for approximately $4,000, salary allocation for approximately $9,000, prospecting for approximately $14,000, travel and transportation for approximately $2,000 and option payments for approximately $14,000;
  • No exploration work was done at Parker Copper Property for the nine months ended September 30, 2020, compared with $49,220 incurred during the nine months ended September 30, 2019, where approximately $14,000 were incurred in general geological work, approximately $25,000 in prospecting work and about $7,000 were incurred in claims management.

General and administration ("G&A")

The following schedule describes the general and administration expenses incurred by PJX during the three months ended September 30, 2020 compared to the same period of Fiscal 2019.

Three months ended September 30,

2020

2019

Change

Insurance

$

2,810

$

4,300

$

(1,490)

Interest, bank charges and penalties

627

528

99

Investor relations

10,634

53,823

(43,189)

Listing and regulatory fees

19,348

13,253

6,095

Office expenses

2,635

2,724

(89)

Professional fees

4,720

12,791

(8,071)

Rent

3,687

3,687

-

Salaries and benefits

44,267

66,309

(22,042)

Taxes and levies

18

-

18

Travel and transportation

230

8,090

(7,860)

$

88,976

$

165,505

$

(76,529)

The most significant changes in G&A expenses during the three months ended September 30, 2020, when compared to the same period of Fiscal 2019, were:

  • The decrease in investor relation charges of $43,189 is composed of a decrease in meals and entertainment of approximately $3,000, a decrease in investor relation subcontracts for approximately $25,000, and a decrease of approximately $15,000 in travel and accommodations;
  • The decrease in salaries and benefits is mainly related to CEO compensation allocated to projects for approximately $23,000, based in his direct involvement with exploration operations.

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 11 of 21

Travel and transportation decreased by $7,860 due to reductions in transportation for approximately $2,300 as well as meal and entertainment for approximately $5,600.

The following schedule describes the general and administration expenses incurred by PJX during the nine months ended September 30, 2020 compared to the same period of Fiscal 2019:

Nine months ended September 30,

2020

2019

Change

Insurance

$

10,979

$

13,533

$

(2,554)

Interest, bank charges and penalties

1,538

742

796

Investor relations

46,179

178,135

(131,956)

Listing and regulatory fees

38,113

29,200

8,913

Office expenses

8,388

11,907

(3,519)

Professional fees

23,440

25,653

(2,213)

Rent

5,232

9,862

(4,630)

Salaries and benefits

150,456

208,592

(58,136)

Taxes and levies

9,243

-

9,243

Travel and transportation

3,737

20,415

(16,678)

$

297,305

$

498,039

$

(200,734)

The most significant changes in general and administration expenses during the nine months ended September 30, 2020, when compared to the same period of Fiscal 2019, were:

  • The decrease in investor relations expenses of $131,956 was composed of a decrease of approximately $83,000 in investor relation services subcontracted, a reduction in meals and entertainment of approximately $7,000 and a reduction in travel and accommodation of approximately $42,000;
  • The increase in listing and regulatory charges of $8,913 is composed of increases to TSXV related charges of approximately $6,000 and press releases and associated charges for approximately $2,000;
  • The decrease in salaries and benefits is mainly related to CEO compensation allocated to projects of approximately $57,000 during the nine months ended September 30, 2020, based in his direct involvement with exploration operations.
  • The increase in taxes and levies is related to the payment of part XII tax paid on flow-through related charges during the nine months ended September 30, 2020.
  • The reduction in travel and transportation of $16,678 is mainly due to a reduction in non investor relation related traveling of approximately $3,400 and a reduction in meals and entertainment of approximately $13,200.

SUMMARY OF QUARTERLY RESULTS

The following table sets forth a breakdown of the most significant components of the exploration expenses and the G&A costs of the Company for each of the eight most recently completed quarters.

Net loss

Exploration

General and

Quarter Ended

Revenue

Total

Per Share

expenses

administration

September 30, 2020

Nil

$ (498,917)

($0.00)

$165,551

$88,976

June 30, 2020

Nil

(172,947)

(0.00)

107,690

82,868

March 31, 2020

Nil

(449,771)

(0.00)

406,898

125,461

December 31, 2019

Nil

(239,058)

(0.01)

31,881

217,351

September 30, 2019

Nil

(745,863)

(0.01)

691,409

165,505

June 30, 2019

Nil

(337,223)

(0.00)

233,675

143,410

March 31, 2019

Nil

(1,142,516)

(0.01)

542,741

189,124

December 31, 2018

Nil

(445,949)

(0.00)

281,050

238,077

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 12 of 21

LIQUIDITY AND CAPITAL RESOURCES

On December 30, 2019, the Company announced the completion of a private placement where 1,943,824 flow-through units at a price of $0.17 per flow-through unit, 3,333,334 flow-through shares at a price of $0.15 per share and 3,858,333 units at a price of $0.15 per unit, were issued for gross proceeds of $1,409,200. The Company paid finder fees for a total of $99,226 and issued 649,733 compensation warrants, valued at $30,799.

On September 21 2020, the Company announced the undertaking of a non-brokered private placement of up to eight million units, with a 25% overallotment option at the discretion of the Company, through the issuance of Flow Through ("Flow Through Unit") and Non-flow Through Units ("Unit") at a price of $0.15 per Flow Through Unit and $0.125 per Unit.

On October 2, 2020, subsequent to the period end, the Company announced the successful closing of the private placement for total proceeds of $1,230,800. The Offering was oversubscribed and the previously announced 25% overallotment option was undertaken.

As at September 30, 2020, the Company had total current assets of $1,155,860 (cash, amounts receivable, and prepayments) that will be used for general and administrative expenses as well as exploration on its properties.

The working capital of the Company has decreased from $1,259,561 at December 31, 2019 to $1,032,437 at September 30, 2020. When compared to the same quarter end on Fiscal 2019, current assets increased by $822,076 and current liabilities decreased by $20,650 for the same comparative period, representing an increase in working capital of $842,726 from the comparative period.

The Company has successfully secured its key properties and is not required to make any option payments. (See also the Commitments and Obligations section below.)

Outlook

The Company has no producing properties and, consequently, has no current operating income or cash flow. The Company's access to capital may not be available on terms acceptable to the Company or at all. Financing of the Company's activities to date has been obtained from equity issues. The continuing short- term development of the Company's properties therefore depends on the Company's ability to obtain additional financing through equity investments. For the nine months ended September 30, 2020, the Company incurred a loss of $1,121,635 or $0.01 per share and reported an accumulated deficit of $17,251,931. As at September 30, 2020 the working capital of the Company was $1,032,437. The Company's current cash position will enable it to fund the Corporation's planned operating expenses for the next twelve months however additional financing is currently required to allow the Company to fund its planned exploration and planned development programs.

The Company is focused on ensuring capital resources are spent in the most efficient manner and constantly reviews future exploration plans related to advancing its properties. The work plan will consider what work will be most beneficial for each project and the Company as balanced against the cash balance and market conditions affecting future funding.

RELATED PARTY TRANSACTIONS

The following transactions were carried out with related parties:

a) Purchase of services:

During the three and nine months ended September 30, 2020 and 2019, the Company contracted professional services from a director of PJX as described below:

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 13 of 21

Three months

Nine months

Periods ended September 30,

2020

2019

2020

2019

Fee paid to a director for geological services rendered

-

-

-

4,551

b) Key management compensation:

Key management includes directors (executive and non-executive), and senior officers (Chief Executive Officer and Chief Financial Officer). The compensation paid and payable to key management for employee services is shown below:

Three months

Nine months

Periods ended September 30,

2019

2018

2019

2018

Salaries

$

66,000

$

66,000

$

198,000

$198,000

Stock-based compensation

256,348

-

256,348

421,374

$

322,348

$

66,000

$

454,348

$619,374

c) Period-end balances arising from purchases of services and key management compensation:

September 30,

December 31,

2020

2019

Payable to officers of the Company

$

10,848

$

19,564

Payable to a law firm w here a director of the Company is a partner

-

261

$

10,848

$

19,825

Payables to related parties for purchases and services are due on thirty days after reception and bear no interest.

All transactions with related parties for purchases and services are on an arm's length basis and recorded at exchange amounts.

COMMITMENTS, CONTINGENCIES AND CONTRACTUAL OBLIGATIONS

The Company is a party to certain employment contracts. These contracts contain clauses requiring that $812,000 be paid upon a change of control of the Company. As the likelihood of these events taking place is not determinable, the contingent payments have not been reflected in the Company's September 30, 2020 financial statements.

The Company's exploration activities are subject to various federal, provincial and international laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company conducts its operations so as to protect public health and the environment and believes its operations are materially in compliance with all applicable laws and regulations. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.

Pursuant to the terms of certain flow-through share agreements, the Company needs to comply with its flow- through contractual obligations with subscribers with respect to the Income Tax Act (Canada) by incurring qualified exploration expenditures before December 31, of the year following the year in which the agreement is entered into. The Company indemnifies the subscribers of current and previous flow-through share offerings against any tax related amounts that become payable by the shareholder as a result of the Company not meeting its expenditure commitments. As of September 30, 2020, PJX has a flow-through exploration obligation of approximately $214,000 to incur before December 31, 2020.

On July 10, 2020, the Government of Canada announced it is proposing to extend the timelines for spending the capital raised via flow-through shares by 12 months. This change allows the Company to extend its flow through obligation to December 31, 2021. This is a proposed change that requires yet to be received

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 14 of 21

legislative amendments to in effect.

TREND INFORMATION

There are no major trends which are anticipated to have a material effect on the Company's financial condition and results of operations in the near future.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements, capital lease agreements or long-term debt obligations.

PROPOSED TRANSACTIONS

There are no proposed transactions that will materially affect the performance of the Company.

CRITICAL ACCOUNTING ESTIMATES AND CHANGES IN ACCOUNTING POLICIES

Critical accounting estimates and judgments

The preparation of financial statements requires management to use judgment in applying its accounting policies and estimates and assumptions about the future. Estimates and other judgments are continuously evaluated and are based on management's experience and other factors, including expectations about future events that are believed to be reasonable under the circumstances. The following discusses the most significant accounting judgments and estimates that the Company has made in the preparation of the financial statements:

  • The inputs used in accounting for share-based payment transactions in profit or loss. PJX estimates the value of stock-based compensation granted using the Black-Scholes valuation method. Several assumptions including volatility, risk-free interest rate and expected option life are significant assumptions used in determining the values of options.
  • The assumptions used for determining the amount of deferred income tax assets, liabilities, expense and recovery, including the income tax rate to be used and recoverability of deferred tax assets involve critical judgement and estimates.
  • The Company is subject to income, value added, withholding and other taxes. Significant judgment is required in determining the Company's provisions for taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. The determination of the Company's income, value added, withholding and other tax liabilities requires interpretation of complex laws and regulations. The
    Company's interpretation of taxation law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. All tax related filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the tax related accruals and deferred income tax provisions in the period in which such determination is made.
  • The inputs used in accounting for share purchase warrants transactions in the statement of financial positions. PJX estimates the warrants issued using a standard valuation method. Several assumptions including volatility, risk-free interest rate and expected warrant life are significant assumptions used in determining the values of warrants.

Changes in accounting policies:

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after January 1, 2020. Many are not applicable or do not have a significant impact to the Company and have been excluded. The following have not yet been adopted and are being evaluated to determine their impact on the Company.

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 15 of 21

IAS 1 - Presentation of Financial Statements ("IAS 1") and IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors ("IAS 8") were amended in October 2018 to refine the definition of materiality and clarify its characteristics. The revised definition focuses on the idea that information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements. The amendments are effective for annual reporting periods beginning on or after January 1, 2020.

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

The Company's financial instruments include cash and cash equivalents, accounts receivable, deposits and advances, accounts payable and accrued liabilities. Cash and cash equivalents have been designated as held- for-trading, which are measured at fair value. Accounts receivable is classified as loans and receivables, which are measured at amortized cost. Accounts payable, accrued liabilities are classified as other financial liabilities, which are measured at amortized cost. It is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from its financial instruments and that their fair values approximate their carrying value unless otherwise noted.

Fair Value

Fair value estimates are made at the balance sheet date based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties in significant matters of judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates.

The book values of the cash, other receivables, other financial assets, and accounts payable and accrued liabilities, approximate their respective fair values due to the short-term nature of these instruments. A summary of the Company's risk exposures as it relates to financial instruments are reflected below:

Financial risk

The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk, and market risk (including interest rate and commodity and equity price risk). Risk management is carried out by the Company's management team with guidance from the Board of Directors.

Credit risk

Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations. The Company's credit risk is primarily attributable to cash and deposits. Cash is held with reputable Canadian chartered banks, from which management believes the risk of loss to be minimal. Deposits are held with the British Columbia Ministry of Energy and Mines, from which management believes that the credit risk is minimal.

Liquidity risk

The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. At September 30, 2020, the Company had a cash balance of $1,113,036 (December 31, 2019: $1,259,561) to settle current liabilities of $123,423 (December 31, 2019: $208,078). All of the Company's financial liabilities have contractual maturities of less than 30 days and are subject to normal trade terms.

Market risk

Interest rate risk

The Company's current policy is to invest excess cash in interest bearing accounts at major Canadian chartered banks. The Company periodically monitors its cash management policy. As at September 30, 2020, the Company did not have any amounts invested in interest bearing accounts.

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 16 of 21

Sensitivity analysis

As of September 30, 2020, both the carrying and fair value amounts of the Company's financial instruments are the same. Based on Management's knowledge and experience of the financial markets, the Company believes that is "reasonably possible" that commodity price fluctuation could adversely affect the Company. In particular, the Company's future profitability and viability of development depends upon the world market price of mineral commodities. As of September 30, 2020, the Company was not in the production phase. As a result, commodity price risk may affect the completion of future equity transactions such as equity offerings and the exercise of stock options. This may also affect the Company's liquidity and its ability to meet its ongoing obligations.

Capital Management

When managing capital, the Company's objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management adjusts the capital structure as necessary in order to support the acquisition, exploration and development of its exploration properties. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management to sustain future development of the business.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Company's approach to capital management during the years ended December 31, 2019 and 2018. The Company is not subject to externally imposed capital requirements.

The Company is not subject to any capital requirements imposed by a lending institution or regulatory body, other than of the TSX Venture Exchange ("TSXV") which requires adequate working capital or financial resources of the greater of (i) $50,000 and (ii) an amount required in order to maintain operations and cover general and administrative expenses for a period of 6 months.

DISCLOSURE CONTROLS AND PROCEDURES

Management has established processes, which are in place to provide them sufficient knowledge to support management representations that they have exercised reasonable diligence that (i) the financial statements do not contain any untrue statement of 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 is made, as of the date of and for the periods presented by the financial statements, and (ii) the financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of the date of and for the periods presented by the financial statements.

In contrast to the certificate required under Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (MI 52-109), the Company utilizes the Venture Issuer Basic Certificate, which does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in MI 52-109. In particular, the certifying officers filing the Certificate are not making any representations relating to the establishment and maintenance of:

  1. Controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
  2. A process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP. The
    Company's certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate.

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 17 of 21

Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost-effective basis DC&P and ICFR as defined in MI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

RISKS AND UNCERTAINTIES

Exploration is the Research & Development foundation of the Minerals and Metals Industry. The mineral claims to which the Company has a right to acquire an interest or owns are in the exploration stages and are without a known body of commercial ore. The Company does not hold any interest in a mining property in production and is focused on exploration to make new discoveries with the potential to be brought into production. The Company continues to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so. Development of the mineral properties would follow only if favorable results are determined at each stage of assessment.

PJX's business of exploring mineral resources involves a variety of operational, financial and regulatory risks that are typical in the natural resource industry. The Company attempts to mitigate these risks and minimize their effect on its financial performance, but there is no assurance that the Company will be successful in achieving a return on shareholders' investment and the likelihood of success must be considered given its early stage of operations. The risks and uncertainties described in this section are not inclusive of all the risks and uncertainties to which the Company may be subject.

Liquidity and Capital Markets Risks

Global economic and other factors impact markets. The Company anticipates future expenditures will require additional infusions of capital; there can be no assurance that such financing will be available or, if available, will be on reasonable terms depending on market and other factors beyond the control of the Company. If financing is obtained by issuing common shares from treasury, control of the Resulting Issuer may change and investors may suffer additional dilution. Furthermore, if financing is not available, lease expiry dates, work commitments, rental payments or option payments, if any, may not be satisfied and could result in a loss of shareholder investment.

Dependence on Management

The Company is very dependent upon the personal efforts and commitment of its existing management. To the extent that management's services would be unavailable for any reason, a disruption to the operations of the Company could result, and other persons would be required to manage and operate the Company.

Regulatory / Political Risk

The Company's exploration properties are located in British Columbia, Canada. The Company requires permits from various government authorities and, depending on the stage of development, such operations may be governed by laws, regulations or responsibilities relating to prospecting, development, mining, production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, land use, environment, First Nations consultation and other matters. The Company works with all interested parties on an on-going basis to comply with all applicable material laws and regulations and address the interests of communities where it operates. There can be no assurance, however, that all permits which the Company may require for its operations and exploration activities will be obtainable on reasonable terms or on a timely basis or that laws, regulations, or actions would not have an adverse effect on any exploration or mining project which the Company might undertake.

Title Risks

Although the Company has exercised due diligence with respect to determining title to properties in which it has a material interest, and government records support PJX's title, there is no guarantee that title to such properties will not be challenged or impugned. The Company's mineral property interest may be challenged

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 18 of 21

by prior unregistered agreements, or transfers, or conflicting claims; or indigenous claims, and title may be affected by undetected defects.

Metal Prices

The mining industry, in general, is intensely competitive and there is no assurance that a profitable market will exist for the sale of metals produced even if commercial quantities of precious and/or base metals are discovered. Factors beyond the control of the Company may affect the marketability of metals discovered. Pricing is affected by numerous factors beyond the Company's control, such as international economic and political trends, global or regional consumption and demand patterns, increased production and smelter availability. There is no assurance that the price of metals recovered from any mineral deposit will be such that they can be mined at a profit.

Shareholder Dilution

The Company's constating documents permit the issuance of an unlimited number of common shares and a limited number of preferred shares issuable in series on such terms as the Directors determine without the approval of shareholders, who have no pre-emptive rights in connection with such issuances. In addition, the Company is required to issue common shares upon the conversion of its outstanding share purchase warrants and options in accordance with their terms. Accordingly, holders of common shares may suffer dilution.

COVID-19 Risk

The COVID-19 pandemic continues to rapidly evolve on a global scale. The unprecedented nature and heightened uncertainty surrounding the pandemic mean that the type and extent of the risks posed by COVID-19 cannot be known, quantified or predicted with any certainty.

COVID-19 continues to have significant effects related to disruptions of workforces, economies, and financial markets globally. This potentially increases the risk of significant labour force disruption (including the supply of contract labour, equipment or site access) for PJX. Labour force disruption could also affect the provision of services to the Company such as delays in the receipt of laboratory results or provision of supplies. In addition, COVID-19 has the potential to spread rapidly and place the Company's workforce at risk. The Company follows the Worksafe BC and Provincial Health Office of British Columbia guidelines to protect its workforce and its operations from the risks and potential adverse impacts of the pandemic.

The Company continues to actively monitor the situation and may take additional measures, if and to the extent warranted, as matters develop. There can be no assurance, however, that such steps and measures will be sufficient to fully mitigate all such risks and potential adverse impacts.

OUTSTANDING SHARE DATA

The following schedules reconcile shares, options and warrants issued as well as provide the fully diluted capital position of the Company as at the date of this report:

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 19 of 21

Balance at December 31, 2018

98,743,803

Shares issued on property option payment

125,000

Shares issued on private placement

9,135,491

Shares issued on exercise of w arrants

50,000

Balance at December 31, 2019

108,054,294

Shares issued on property option payment

170,000

Balance at September 30, 2020

108,224,294

Shares issued subsequent to September 30, 2020

9,350,400

Balance at the date of this report

117,574,694

Total number of w arrants issued and outstanding

40,139,701

Total number of options issued and outstanding

10,812,500

Fully diluted number of shares at the date of this report

286,101,589

On June 2, 2020 the Company issued 20,000 (valued at $1,900) common shares in relation to the purchase of the David 6 claim.

On June 2, 2020 the Company issued 50,000 common shares (valued at $4,750) in relation to the final payment for the acquisition of the DD Property.

Warrants outstanding:

The following schedule describes the warrants outstanding at the date of this report:

Number of

Exercise

Expiry Date

Warrants

price

Value

August 29, 2021

6,833,284

$

0.25

$

332,611

May 15, 2021

12,296,276

0.25

537,320

December 17, 2021

4,574,131

0.25

241,972

December 17, 2021

332,600

0.25

19,120

December 5, 2022

5,802,157

0.25

274,893

December 5, 2022

649,733

0.25

30,799

October 6, 2022

9,350,400

0.20

332,000

October 6, 2022

301,120

0.20

16,911

Balance at the date of this report

40,139,701

$

0.24

$

1,785,626

On May 5, 2020, the Company announced that it has extended the term of 12,296,276 share purchase warrants, (the "Warrants"). The Warrants were issued pursuant to a private placement announced on May 1, 2018 and accepted for filing by the TSX Venture Exchange on May 17, 2018. The Warrants were to expire on May 15, 2020 and were exercisable at $0.25 per share. The new expiration date of the Warrants is May 15, 2021. All other terms of the warrants, including the exercise price will remain unchanged. The extension of the warrants has been accepted by the TSX Venture Exchange,

On August 12, 2020, the Company announced that it has extended the term of 6,833,284 outstanding Warrants. The Warrants were issued pursuant to a private placement announced on August 25, 2016 and accepted for filing by the TSX Venture Exchange on August 30, 2016. The Warrants were due to expire on August 29, 2020 and are exercisable at $0.25 per share. The new expiration date of the Warrants is on August 29, 2021. All other terms of the warrants, including the exercise price will remain unchanged. The extension of the warrants has been accepted by the TSX Venture Exchange,

Subsequent to the period end, on October 6, 2020, the Company, in relation to a non-brokered private placement, issued a total of 9,350,400 warrants and 301,120 compensation warrants. Each common share purchase warrant, whether acquired as part of a Flow-through Unit, Unit or compensation warrant, entitles

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 20 of 21

the holder to purchase one common share at an exercise price of $0.20 for 24 months following completion of the Offering. The expiration date of the Warrants is October 5, 2022.

On November 18, 2020, 12,457,431 Warrants, exercisable at $0.25, expired unexercised.

Share based compensation:

The Company has a stock option plan (the "Plan") to provide incentive for the directors, officers, employees, consultants and service providers of the Company. The maximum number of shares which may be set aside for issuance under the Plan is 10% of the outstanding common shares.

On January 4, 2019 the Company granted an aggregate of 2,960,000 incentive stock options to employees, officers, directors and consultants of the Company, pursuant to the Company's Plan, at an exercise price of $0.25 per share. Out of the options granted, 2,820,000 were fully vested on granting and 140,000 vest every quarter over a period of 1 year. All options granted are exercisable until January 3, 2024.

On July 20, 2020, 1,380,000 options exercisable at $0.19, expired unexercised.

On August 12, 2020, the Company granted an aggregate of 2,792,500 stock purchase options to certain directors, employees and consultants to acquire common shares at an exercise price of $0.20, expiring August 11, 2025. Out of the options granted, 2,632,500 were fully vested on granting and 160,000 vest every quarter over a period of 1 year. All options granted are exercisable until January 3, 2024.

The following schedule describes the outstanding options as of the date of this report:

Exercise

Life remaining

Number

Number

Expiry Date

price

in years

outstanding

vested

November 17, 2021

$0.20

0.98

3,135,000

3,135,000

August 19, 2023

$0.25

2.73

1,925,000

1,925,000

January 3, 2024

$0.25

3.11

2,960,000

2,960,000

August 11, 2025

$0.20

4.71

2,792,500

2,622,500

Balance at the date of this report

$0.22

2.84

10,812,500

10,642,500

QUALIFIED PERSON

The above scientific and technical information has been prepared or reviewed by John Keating, P.Geo., President and Chief Executive Officer of the Company. Mr. Keating also supervises all work associated with the Company's exploration programs and is a "qualified person" within the meaning of National Instrument 43-101.

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 21 of 21

Corporate information

Directors

John Keating, P.Geo(3)

President & CEO, PJX Resources Inc. Toronto, Ontario, Canada

Linda Brennan, B.Comm(2)

CFO, PJX Resources Inc.

Vancouver, British Columbia, Canada

James Clare, LLB

Partner, Bennett Jones LLP

Toronto, Ontario, Canada

Kent Pearson, P.Geo (1) (2)

Toronto, Ontario, Canada

Joseph Del Campo, CPA, CMA (1) (2)

Toronto, Ontario, Canada

Dr. Trygve Hoy, PhD, MSc, P. Eng(1) (2)

Sooke, B.C, Canada

Victor Bradley

Monaco

  1. Audit Committee
  2. Compensation Committee
  3. Executive Chairman

Officers

John Keating, P.Geo

President & CEO, PJX Resources Inc. Toronto, Ontario, Canada

Linda Brennan, B.Comm

CFO, PJX Resources Inc.

Vancouver, British Columbia, Canada

Stock Listing

TSX Venture Exchange

Tier 2 Company,

Trading Symbol PJX

CUSIP: 72585A 10 9

Auditors

McGovern Hurley LLP

Toronto, Ontario

Legal Counsel

Bennett Jones LLP

Toronto, Ontario

Fraser Milner Casgrain, LLP

Vancouver, British Columbia

Registrar & Transfer Agent

Computershare Trust Company of Canada

Toronto, Ontario

Bank

Royal Bank of Canada

Toronto, Ontario

Executive Office

100 King Street West

Suite 5600

Toronto, Ontario Canada

M5X 1C9

Telephone: (416) 799-9205

Facsimile: (416) 644-8801

E-mail: info@pjxresources.com

Investor Relations

Further information about the Company is available on the Company's website at www.pjxresources.com

The Company's filings with Canadian securities regulatory authorities can be accessed on SEDAR at www.sedar.com

PJX Resources Inc. - Management's Discussion and Analysis for the Three and Nine Months Ended September 30, 2020 and 2019

Page 22 of 21

Disclaimer

PJX Resources Inc. published this content on 22 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 December 2020 22:22:05 UTC


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