AEX Gold Inc.

MANAGEMENT'S DISCUSSION AND ANALYSIS

December 31, 2020

AEX Gold Inc.

Table of content

1.

Nature of activities ..............................................................................................................

3

2.

Corporate update................................................................................................................

3

3.

Property acquisition ............................................................................................................

6

4.

Exploration and evaluation expenses..................................................................................

6

5.

Strategy and action plan ....................................................................................................

13

6.

Environmental monitoring expenses ..................................................................................

13

7.

Selected annual information...............................................................................................

13

8.

Results of operations .........................................................................................................

14

9.

Selected quarterly information ...........................................................................................

15

10.

Liquidity and capital resources...........................................................................................

17

11.

Off balance sheet arrangements........................................................................................

18

12.

Subsequent event..............................................................................................................

18

13.

Transactions between related parties ................................................................................

18

14.

Critical accounting policies, estimates, judgements and assumptions................................

19

15.

Changes in accounting policies..........................................................................................

19

16.

Financial instruments.........................................................................................................

19

17.

Contractual commitments and obligations..........................................................................

20

18.

Outstanding shares data....................................................................................................

20

19.

Stock option plan ...............................................................................................................

20

20.

Risk factors........................................................................................................................

21

21.

Management's responsibility for financial information ........................................................

26

22.

Forward looking information...............................................................................................

26

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AEX Gold Inc.

Management Discussion & Analysis

For the year ended December 31, 2020

The following management discussion and analysis (the "MD&A") of the financial condition and results of the operations of AEX Gold Inc. (the "Corporation" or "AEX") constitutes management's review of the factors that affected the Corporation's financial and operating performance for the year ended December 31, 2020. This MD&A should be read in conjunction with the Corporation's audited consolidated financial statements for the year ended December 31, 2020 (the "Financial Statements"), which are prepared in accordance with the International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). All figures are in Canadian dollars unless otherwise noted. This MD&A is current as of April 28, 2021.

The MD&A contains forward-looking statements not based on historical facts. Forward-looking statements express, as of the date of this report, our estimates, forecasts, projections, expectations and opinions as to future events or results. Forward-looking statements herein expressed are reasonable, but involve a number of risks and uncertainties, and there can be no guarantee that such statements will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements. Factors that could cause results or events to differ materially from current expectations expressed or implied by the forward-looking statements include, but are not limited to; economic conjuncture, fluctuations in the market price of precious metals, mining industry risks, uncertainty as to the calculation of mineral reserves and requirements of additional financing and the capacity of the Corporation to obtain financing.

Further information regarding the Corporation and its operations are filed electronically on the System for Electronic Document Analysis and Retrieval (SEDAR) in Canada and can be found on www.sedar.com. The following abbreviations are used to describe the periods under review throughout this MD&A:

Abbreviation

Period

2018

January 1, 2018 to December 31, 2018

Q1-19

January 1, 2019 to March 31, 2019

Q2-19

April 1, 2019 to June 30, 2019

Q3-19

July 1, 2019 to September 30, 2019

Q4-19

October 1, 2019 to December 31, 2019

2019

January 1, 2019 to December 31, 2019

Q1-20

January 1, 2020 to March 31, 2020

Q2-20

April 1, 2020 to June 30, 2020

Q3-20

July 1, 2020 to September 30, 2020

Q4-20

October 1, 2020 to December 31, 2020

2020

January 1, 2020 to December 31, 2020

2021

January 1, 2021 to December 31, 2021

1. NATURE OF ACTIVITIES

AEX was incorporated on February 22, 2017 under the Canada Business Corporations Act. The Corporation's head office is situated at 3400, One First Canadian Place, P.O. Box 130, Toronto, Ontario, M5X 1A4, Canada. The Corporation operates in one industry segment, being the acquisition, exploration and development of mineral properties. It owns interests in properties located in Greenland. Since July 2017, the Corporation's shares are listed on the TSX Venture Exchange (the "Exchange") under the AEX ticker and since July 2020, the Corporation's shares are also listed on the AIM market of the London Stock Exchange ("AIM") under the AEXG ticker (see section 2.1).

2. CORPORATE UPDATE

2.1 AIM listing

During the quarter ended September 30, 2020, the Corporation completed the admission of its entire issued share capital to trading on the AIM market and trading commenced on AIM on July 31, 2020 ("Admission") under the ticker AEXG.

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AEX Gold Inc.

Management Discussion & Analysis

For the year ended December 31, 2020

2. CORPORATE UPDATE (CONT'D)

2.2 Completion of the fundraising

On July 31, 2020, the Corporation completed the fundraising by issuing 94,444,445 common shares at a price of $0.77 per share for subscription made in Canadian dollars and GBP 0.45 per share for subscriptions made in British pounds sterling, for gross proceeds to the Corporation of $74,550,202 (the "Fundraising").

Stifel Nicolaus Europe Limited ("Stifel") acted as nominated adviser, broker and bookrunner to the Corporation in connection with the Fundraising and Admission. Cormark Securities Inc. and Paradigm Capital Inc. acted as co-managers in connection with the Fundraising (the "Agents").

The Corporation incurred total issuance costs of $6,312,546 in relation to this process.

Certain officers and directors of the Corporation purchased an aggregate of 1,177,581 common shares for $906,737. The officers and directors of the Corporation subscribed to the Fundraising under the same terms and conditions as set forth for all subscribers.

2.3 Update on the Corporation's Strategic Process

On February 10, 2021, the Corporation announced that it was deferring the development of the Nalunaq Project until further notice. The decision to defer the development of Nalunaq was taken after a thorough risk assessment review by the Corporation and its key advisors. The outcome of this assessment was that the current global macro-economic and political landscape driven by the uncertainty associated with the COVID pandemic was judged as too risky at the moment to justify a significant capital expenditure program at Nalunaq.

Consequently, the Corporation has initiated a strategic process ("Strategic Process") with its key advisors to review and evaluate a broad range of potential alternatives focused on maximizing shareholder value.

On March 19, 2021, AEX announced that it had retained the services of Ausenco, a global company providing consulting services in the minerals and metals industry, to undertake a preliminary peer review of the Corporation's Capital Cost Model. This third-party review will assist the Corporation in determining what, if any, amendments are needed to the plan and schedule, and allow the Board to present a revised plan to shareholders that reflects such amendments as we consider appropriate.

On March 25, 2021, Ausenco submitted to the Corporation its report regarding the preliminary third party assessment. The result of Ausenco's assessment was that the Corporation's revised Capital Cost Model was within the industry's benchmark for this size of project, and outlined potential cost saving alternatives for further analysis.

Additionally, early in April 2021, AEX mandated InnovExplo, a specialist in a wide range of exploration and technical services in the metals and mining industry, to review the Nalunaq Resource Model. InnovExplo is a specialist in modelling coarse gold deposits and will provide the Corporation with a peer review assessment on the Resource Model in Nalunaq's Competent Person Report of 2020.

2.4 Highlights of the 2020 work programme and results

Exploration

The 2020 exploration program at Nalunaq was designed to further investigate the down-dip extension of Main Vein from the valley floor as a continuity of the 2019 field season. Additionally, to the extent possible under the COVID environment, undertake targeted prospecting field trips on other regional assets.

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AEX Gold Inc.

Management Discussion & Analysis

For the year ended December 31, 2020

2. CORPORATE UPDATE (CONT'D)

Nalunaq

  • Further results from the Valley Block infill drilling programme include 52.4 g/t gold over 0.55 meters (AEX2008) and 5.9 g/t gold over 0.5 meters (AEX2009). Visible Gold observed in AEX2009.
  • These results support the interpretation that Valley Block is a high-grade domain with a similar footprint to South Block.

Nuna Nutaaq

  • Historic channel sampling of the main shear zone has returned high grade results with highlights of 175.1 g/t gold over 0.8 m and 35.4 g/t gold over 0.95 m, and with grab samples up to 118 g/t gold.
  • One grab sample collected from the main shear zone in 2020 returned 22.3 g/t gold.
  • A float sample of highly altered metavolcanic rock rich in malachite and pyrite was collected close to Kangerluluk fjord, approximately 100 metres east of the main shear zone and returned 3.83% copper and 34 g/t silver.

Follow up structural mapping and sampling at Kangerluluk is planned for 2021.

2.5 AEX team update

In conjunction with the Corporation's admission to AIM, it is pleased to announce that Sigurbjorn ("Siggi") Thorkelsson joined the Board of AEX as independent non-executive director, and Chair of the Audit and Risk Committee, on July 27, 2020. Mr. Thorkelsson has a wealth of experience in the financial markets, having worked at major financial institutions throughout his career.

In November 2020, in order to support the Corporation as it progresses in the development of its asset portfolio, AEX appointed Rothschild & Co as its retained financial advisor.

On January 25, 2021, the Corporation appointed Jaco Crouse as its new CFO. Mr. Crouse is a seasoned mining executive with nearly 20 years' experience in financial management, mine financial planning, business optimization and strategy development. He replaces George Fowlie who has stepped down as the CFO but remains on the Board as a Director.

2.6 Next 12 months and more outlook

As part of the Strategic Process, AEX is reviewing and strategizing with its advisors on the best course of action to undertake key activities on its properties to maximize shareholder value. The Corporation will establish a communication program to keep all stakeholders updated as it undertakes the review of all of its options.

2.7 COVID-19

During Q1-20, an outbreak of a new strain of coronavirus (COVID-19) resulted in a major global health crisis which continues to have impacts on the global economy and the financial markets. The Corporation has taken and will continue to take action to minimize the impact of the virus on its operations. Whilst the Corporation has taken significant precautions to minimize the impact of COVID-19 on its operations, there can be no certainty that there will not be an impact to the Corporation's ability to complete planned exploration, evaluation and development activities, meet obligations and existing commitments, or to obtain financing.

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AEX Gold Inc. published this content on 11 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 May 2021 13:47:00 UTC.