Appia Rare Earths & Uranium : Management Discussion and Analysis

APPIA RARE EARTHS AND URANIUM CORP.

(formerly "APPIA ENERGY CORP.")

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the year ended September 30, 2021

Appia Rare Earths and Uranium Corp.

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September 30, 2021

Management's Discussion and Analysis - September 30, 2021

As of January 25, 2022

The following management's discussion and analysis ("MD&A") of the financial condition and results of operations of Appia Rare Earths and Uranium Corp. ("Appia" or the "Company") constitutes management's review of the factors that affected the Company's financial and operating performance for the year ended September 30, 2021. The MD&A was prepared as of January 25, 2022 and should be read in conjunction with the audited financial statements ("Financial Statements") for the year ended September 30, 2021, including the notes thereto. Unless otherwise stated, all amounts discussed herein are denominated in Canadian dollars. These Financial Statements of the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS") as described in Note 2 to the Financial Statements.

Appia is a Canadian mineral exploration company listed on the Canadian Securities Exchange under the trading symbol "API", and in the USA the shares trade on the OTCQB platform as "APAAF". In Germany the shares trade under the symbols A0I.F, A0I.MU and A0I.BE. Appia is focused on the rare earth element ("REE") deposits at Alces Lake, particularly high priced "critical REE's", and on exploring high-grade,near-surface uranium deposits in the Athabasca Basin area.

ALCES LAKE HIGH-GRADE REE PROJECT

Appia began this season's diamond drilling program at Alces Lake with two diamond drill rigs in mid-July and the summer field exploration consisted of a team of 11 geologists onsite. The airborne geophysical survey over the entire property was completed in July. Notable results include:

• Completion of an airborne radiometric/magnetic survey over the property has highlighted numerous extensive thorium anomalies, most notably in the previously under-explored western portion of the claim block. There are now several newly-discovered monazite occurrences;
• Acquisition by staking of 7,049.4 hectares (17,419.4 acres) of land contiguous to the existing claim block at Alces Lake, increasing 100% owned landholdings to 25,083.8 hectares (61,983.4 acres);
• One drill was dedicated to the WRCB zones, while the other moved across the claims block, testing an ever- growing list of previously undrilled and newly-discovered targets; and
• Diamond drilling continued into December with 8,075 metres in 100 holes.

Alces Lake Field Assays

Appia conducted an extensive field geology and sampling program earlier in 2021, sampling previously untested occurrences of REE across the claims block. Multiple radiometric anomalies were identified with the full-property aerial geophysics conducted this year and confirmed as REE occurrences with field work. The association between REEs and radioactivity is due to the thorium content of the REE host mineral, monazite. High-grade REE mineralization has now been identified throughout an area covering approximately 27 square kilometres. Elevated gallium (Ga2O3) values have also been identified throughout the area. Assay results have been returned from channel and grab samples and are reported in wt % TREO (total rare earth oxides) (see Table 1). Highlights include:

• High grade REE mineralization has now been identified over an estimated 27 square kilometre area
• Channel sample of 14.71 wt % TREO from Sweet Chili Heat and 11.94 wt % TREO from Diablo.
• 10.35 wt % TREO returned from grab sample at Zesty.
• 7.86 wt % TREO returned from grab sample along the Oldman River trend.
• New discovery of REEs with 2.27 wt % TREO grab sample from "Train Domain"
• Elevated Gallium values have been returned for all samples enriched in TREO

Appia Rare Earths and Uranium Corp.

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September 30, 2021

Table 1 - Summary of channel sample composites.

							Including
			Width	TREO (wt	Ga2O3 (wt	Width	TREO (wt	Ga2O3 (wt
	Zone Name	Channel	(m)	%)		%)	(m)	%)	%)
	Augier	1	7.00	0.57		0.006	1.84	1.20	0.008
	Buffalo	1	0.90	0.85		0.005	0.56	1.05	0.005
	Cool Ranch	1	6.63	0.77		0.006	0.80	3.17	0.014
	Cool Ranch	2	4.27	0.56		0.005	0.61	1.13	0.007
	Diablo	1	3.32	2.22		0.008	1.02	5.07	0.015
	Diablo	2	2.50	5.83		0.014	1.20	11.94	0.027
	Gilligan	1	4.00	1.40		0.007
	HH	1	2.16	1.83		0.007	0.87	4.35	0.013
	Roulette	1	1.00	1.97		0.008
	Roulette	2	1.30	0.96		0.006
	Sweet Chili Heat	1	3.00	2.91		0.010	0.50	14.71	0.031
	Sweet Chili Heat	2	2.03	3.94		0.014	0.70	10.38	0.030
	Sweet Chili Heat	3	2.68	4.60		0.017
	Sweet Chili Heat	4	0.25	1.60		0.010
	Zesty	1	3.04	0.49		0.005
	Zesty	2	3.83	0.26		0.003
	Zesty	3	1.25	0.71		0.004	0.20	1.64	0.008

The Company's channel sampling program consists of continuous samples, each of which did not exceed 1.2 m, taken along the exposed rock at surface.

ALCES LAKE SUMMARY

Appia's 2021 exploration program included drilling a total of 100 core holes with approximately 8,075 metres of diamond drill core. Initial assay results from the Wilson North and Richards drill holes were announced on November 29, 2021 and confirmed some of the highest recorded rare earth grades discovered to date on the Alces Lake property. In addition, high-grade REE mineralization has now been identified throughout an area covering approximately 27 km2 of the Alces Lake block. Initial assay results have been returned from channel and grab samples but the Company is still awaiting further drilling core and channel sample assay results from the 2021 program.

With the largest exploration and diamond drilling program in the Company's history this past year, exploration results will be released as received and analyzed by the Company. Analysis of the summer exploration and drilling program will follow and may lead to the preparation of an NI 43-101 (Technical Report with 3D Geophysical-geological Models) report expected in 2022. The Alces Lake project encompasses some of the highest-grade total and critical* REEs and gallium mineralization in the world, hosted within a number of surface and near-surface monazite occurrences that remain open at depth and along strike.

• Critical rare earth elements are defined here as those that are in short-supply and high-demand for use in permanent magnets and modern electronic applications such as electric vehicles and wind turbines (i.e: neodymium (Nd), praseodymium (Pr), dysprosium (Dy) and terbium (Tb)).

The Alces Lake project is located in northern Saskatchewan, the same provincial jurisdiction that is developing a "first-of-its-kind" rare earth processing facility in Canada (currently under construction by the Saskatchewan Research Council, with the Monazite Processing Unit scheduled to become operational in 2023). The Alces Lake project area is 35,682 hectares (88,173 acres) in size and is 100% owned by Appia.

Appia Rare Earths and Uranium Corp.

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September 30, 2021

Athabasca Basin Uranium Properties

In January 2022 Appia announced the acquisition of contiguous new mineral claims in the Athabasca Basin area, northwest Saskatchewan. Portions of the newly acquired Otherside claims block were previously held by Appia.

The Otherside claim block is 27,291 contiguous hectares (67,437 acres) located approximately 50 kilometres south of Fond du Lac. The claims were staked on the basis of similar geological and geophysical signatures to the Company's Loranger property as well as other known high-grade,large-tonnage uranium deposits in the Athabasca Basin including Fission Uranium Corp's Triple R deposit, NexGen Energy's Arrow deposits and others. Otherside straddles a 40 km long corridor hosting multiple discrete conductors with associated magnetic gradients and gravity lows, within the north central Athabasca Basin.

Appia now holds a total of 69,344 hectares (171,351 acres) of land on four uranium claims (Otherside, Eastside, North Wollaston and Loranger) as shown in Figure 1 below. Appia recently completed 925 line kilometres of airborne radiometric survey over North Wollaston and an additional 379 line kilometres of airborne radiometrics over Loranger to supplement the existing database on these properties. Additional VTEMTM (Versatile Time Domain Electromagnetic) surveys over both the North Wollaston and Loranger properties were commenced late in 2021 but have not yet been completed.

Figure 1 - Athabasca Basin Property Map

Appia has commenced the permitting process for a winter drilling program on the Loranger property and anticipates commencement of drilling in February 2022, depending on weather and permits. The Company is fully funded for this program.

Health and safety

The declaration by the World Health Organization that the COVID-19 infectious virus is a global pandemic delayed the start of the 2020 exploration program. Although Saskatchewan has not experienced the dire results in other Provinces, there are government-imposed restrictions on access to the properties and regulation of proposed activity.

Appia Rare Earths and Uranium Corp.

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September 30, 2021

To ensure safe work conditions are met for the workforce, the Company developed exploration guidelines that comply with the Saskatchewan Public Health Order and the specific Northern Saskatchewan Administration District Order in order to maintain social distancing and help prevent the transmission of the COVID-19 infectious virus.

Uranium and REEs Outlook

The trade war between the USA and China is jeopardizing the availability of critical REEs. The Company's Alces Lake project contains some of the highest-grade total critical REE mineralization in the world.

A shortage of critical REEs has developed, largely a result of the increase in electric vehicle production. China continues to control the pricing of REEs, but its share of the world's REE production has dropped from 80% to 60% and China has lost some of its pricing power. Some of the REE concentrates is imported, processed in China to final form and re-exported.

Since the coup in Myanmar in February 2021 the Chinese are illegally mining across the border in areas controlled by a junta- sponsored militia. Myanmar is China's largest rare earth source. In 2020 Myanmar accounted for 35,500 tons of concentrates, 74% of Chinese imports of rare earths for refining, processing and sale around the world. Around ten rare earth mines have opened illegally across an uncontrolled border in Myanmar, with considerable environmental damage and pollution of the rivers. In mid 2021 the border was closed for six months, so there was a build up of mined material at the start of 2022, but prices have not dropped so far.

For the supply of critical REEs required by the defence industry and for electronics, Washington is working on plans to reduce the dependence on China for the supply of critical REEs. There is a growing cooperation between Canada and USA in finding and producing REEs in North America, a long-term objective. A bipartisan bill was introduced in the American Senate which would force the US defence contractors to avoid use of China-sourced rare earth metals; it would also seek to create a strategic stockpile in the US.

Cameco indefinitely shut down the McArthur River uranium mine and recently suspended operations at Cigar Lake, the world's largest single largest uranium mine. Cameco is using its inventory of mined uranium and is expected to continue purchasing 5 million pounds on the spot market this year in order to satisfy its contractual delivery requirements.

The uranium demand forecast shows an increase from China, and in 2021 known supply sources are projected to be unable to match demand. Industry opinion is that a contract price of US$60 per pound is needed before any new mining project advances. The spot price remains around US$46. The World Nuclear Association recently projected an annual production shortfall of 50 million pounds in the near future, but there is idle production capacity available at this time.

The political stability of countries supplying the US with uranium and REEs has caused concern in the United States, as it relies on imports of uranium for reactors and for the supply of REEs required by the defence industry, for electronics and high strength magnets needed in the electric vehicle and wind farm applications.

Ontario Properties

Appia holds over 13,008 hectares (32,143 acres) encompassing five mineralized zones in the Elliot Lake area of northern Ontario. The zones are called Teasdale, Banana Lake, Canuc, Bouck Lake and Buckles Lake. The Elliot Lake area produced some 360 M lbs. of U3O8 from 13 underground mines between 1955 and 1996 and is the only mining camp in Canada that had significant historical commercial REE production.

No work has been carried out in recent years, as the current market price for uranium oxide does not warrant additional work at this time.

The Company is considering the next stage of the Teasdale exploration and evaluation. The longer-term outlook for uranium prices is positive and the successful recovery of the REEs, particularly the critical elements of the total rare earths encountered, is very encouraging. Factors favourable for the project include the following:

• new mine infrastructure development would be in brownfield areas already disturbed by industrial and mining activity;
• water, electrical, transportation and communications infrastructure are in place or close at hand;
• the recovery of uranium from Elliot Lake ore is well known. Based on Teasdale Lake test results, the recovery of REEs appears to face no significant technical uncertainties;

Appia Rare Earths and Uranium Corp.

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September 30, 2021