Azarga Uranium : Management’s Discussion and Analysis dated May 13, 2021

Azarga Uranium Corp.

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the six months ended June 30, 2021

(Expressed in U.S. Dollars)

AZARGA URANIUM CORP.

ForManagemethe six months's Discussionended June 30,and2021Analysis

The following is management's discussion and analysis ("MD&A") of the results of operations and financial condition of Azarga Uranium Corp. ("Azarga Uranium"), together with its subsidiaries (collectively referred to as the "Company"), for the six months ended June 30, 2021 and up to the date of this MD&A. The MD&A has been prepared to provide material updates to the business operations, financial condition, liquidity and capital resources of the Company since its last management's discussion and analysis for the fiscal year ended December 31, 2020 (the "Annual MD&A").

This MD&A should be read in conjunction with the Annual MD&A and the audited consolidated financial statements for the year ended December 31, 2020, together with the notes thereto, and the accompanying unaudited condensed consolidated interim financial statements and related notes thereto for the six months ended June 30, 2021.

All financial information in this MD&A is derived from the Company's condensed consolidated interim financial statements for the six months ended June 30, 2021 prepared in accordance with International Financial Reporting Standards ("IFRS"). All references to $ in this MD&A refer to the United States dollar and all references to C$ refer to the Canadian dollar.

Additional information relating to the Company, including the Annual Information Form, is available under the Company's profile on SEDAR at www.sedar.com.

The effective date of this MD&A is August 11, 2021.

DESCRIPTION OF THE BUSINESS

Azarga Uranium was incorporated on February 10, 1984 under the laws of the Province of British Columbia, Canada. Azarga Uranium's common shares are publicly traded on the Toronto Stock Exchange ("TSX") (Symbol: AZZ), the Frankfurt Stock Exchange (Symbol: P8AA), and the OTCQB Venture Market (Symbol: AZZUF). The Company is an integrated uranium exploration and development company.

The Company controls uranium properties in the United States of America (the "USA"), located in South Dakota, Wyoming, Utah and Colorado, with a primary focus of developing in-situ recovery ("ISR") uranium projects. The Dewey Burdock ISR uranium project in South Dakota, USA (the "Dewey Burdock Project") is the Company's initial development priority and has been issued its Nuclear Regulatory Commission ("NRC") license and final Class III and Class V Underground Injection Control ("UIC") permits from the Environmental Protection Agency (the "EPA"). The Company also owns the Gas Hills, Juniper Ridge, Dewey Terrace and Aladdin Projects in Wyoming, the Centennial Project in Colorado, and uranium exploration properties in Wyoming, Utah, and Colorado.

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AZARGA URANIUM CORP.

ForManagemethe six months's Discussionended June 30,and2021Analysis

OPERATIONAL HIGHLIGHTS

Theand toCompany'sthe date ofsignificantthis MD&Aeventsare asandfollows:highlights for the six months ended June 30, 2021

• • Further to an ordinary rebalance in the
• SolactiveGlobal XGlobalUraniumUraniumETF &InclusionNuclear Components Total Return Index (the "Index"), effective August 2, 2021, the Company was included in the Index composition for the Global X Uranium ETF (NYSE:URA).
• • In May 2021, the Company filed an updated National
• InstrumentGas Hills Project43-101 ("NI 43-101") resource estimate for its Gas Hills Uranium Project in Wyoming, USA (the "Gas Hills Project"). Measured and indicated uranium resources increased to 10.8 million pounds U3O8 from 4.7 million pounds U3O8, a 128% increase. Of the 10.8 million pounds U3O8, 7.7 million pounds U3O8 are located below the water table and ideally suited to ISR mining techniques. Subsequently, in August 2021, the Company filed a maiden independent preliminary economic assessment ("PEA") for the ISR resources at its Gas Hills Project. The base case economic assessment resulted in a pre-income tax internal rate of return ("IRR") of 116% and a pre-income tax net present value ("NPV") of $120.9 million when applying an eight percent discount rate. Using the same discount rate, the post-income tax IRR is 101% and the post-income tax NPV is $102.6 million.
• • In March 2021, the Company announced that AK Jensen
• InvestmentStrategic InvestorManagement Ltd through its Tees River Uranium Fund and Tees River Critical Resources Fund increased its ownership of the Company to 10.94% of the issued and outstanding common shares on a non-diluted basis and 12.58% on a fully diluted basis.

COVID-19

In March 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, has adversely affected workforces, economies, and financial markets globally. To date, this pandemic has had a limited impact on the Company's operations as the Company has continued to advance its business objectives and raise capital. However, it is not possible for the Company to ultimately predict the duration or magnitude of the adverse impacts of the outbreak and its effects on the Company's business or ability to raise funds.

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AZARGA URANIUM CORP.

ForManagemethe six months's Discussionended June 30,and2021Analysis

INDUSTRY TRENDS AND OUTLOOK

Although uranium prices have recovered from their lows, the Company believes that the

•
following key elements will contribute to further improvements in the uranium sector:
	Gl	bal reactor pipeline indicates growth - the global reactor pipeline consists
	of	9221 nuclear	reactors	that are operable,	under construction, planned or
					1	1
	proposed. Of the 922 nuclear reactors, 443 reactors are operable . A total of 154
	nuclear reactors are under construction or planned, which represents
	approximately 35% of the current operating fleet. China and India lead the world
	in	terms of the	number	of nuclear power	plants under construction,	with
				1
	seventeen and six, respectively . China continues to accelerate their nuclear
	growth plans and intends to have 70 GWe of installed capacity by 20252 (currently
•		1
50 GWe ).			exceed primary p oduction - in
	Nuclearproductionactor requirem nts significantly3
	2021, expected uranium	3demand is 181 million pounds, whereas, expected
•	primary	is 126	million pounds.
	United States Nuclear Fuel Work ng Group - in February 2020, the fiscal 2021
	budget proposal requested $1.5 billion over a 10-year period to establish a United
	States uranium reserve. Subsequently, in April 2020, the United States Nuclear
	Fuel Working Group ("NFWG") released its report detailing the Strategy to
	Restore American Nuclear Energy Leadership. This strategy is designed to restore
	America's competitive nuclear advantages and proposes, among other items, that
	the U.S. Government "take immediate and bold action to revive and strengthen the
	uranium mining industry". The strategic objectives will "restore the viability of
	the entire front-end of the nuclear fuel cycle". A summary of the other most
	relevant points included in the NFWG report pertaining to the U.S. uranium mining
	•
	industry include:
		U.S. government purchases of 17-19 million pounds of uranium, through a
	•	competitive procurement process from domestic producers.
		The Department of Energy will end the uranium bartering program and
		reevaluate the Department of Energy's excess uranium inventory management
	•	policy.
		Streamlined regulatory reform and land access for uranium extraction.

Further, in December 2020, the approved Omnibus Budget Bill appropriated $75 million to the Department of Energy to establish a United States uranium reserve.

1. World Nuclear Association - World Nuclear Power Reactors & Uranium Requirements (July 2021)
2. TD Securities Inc. (March 2021)
3. TD Securities Inc. (July 2021)

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AZARGA URANIUM CORP.

ForManagemethe six months's Discussionended June 30,and2021Analysis

•	Russian Suspension Agreem nt ("RSA") extended - the RSA has been extended
	to 2040 and reduces the delivery of nuclear fuel into the USA from Russia. Under
	the previous agreement, Russian exports were limited to approximately 20% of
	USA enrichment demand; however, under the amended agreement, this
	percentage would drop to an average of 17% over a 20-year period. This has the
	potential to support increased domestic production in the USA.
Despite the Company's belief that a uranium sector turnaround has commenced, its
strategies are focused on making prudent plans to progress its business, while conserving
its financial resources. At this time, the Company's strategy involves the following key
•
elements:
	Continue with the advancement of the Dewey Burdock Project - the EPA
	issued the Company their final Class III and Class V UIC permits in November 2020.
	The major federal permits, being the EPA permits and the NRC license, have now
	been issued for the Dewey Burdock Project, and as a result, the Company is
	focused on obtaining the required state permits, which have already been
	recommended for approval by the South Dakota Department of Agriculture and
	Natural Resources ("DANR") (formerly the South Dakota Department of
	Environment and Natural Resources) staff.
	In parallel with finalizing permitting at the Dewey Burdock Project, the Company
	will continue to evaluate project-financing options, with a view to having a funding
•	solution in place prior to or concurrent with the finalization of permits.
	F cus on isdentifyontinuinguranium resources at the Dewey Terrace Proj ct - the
	Company	c	the evaluation and analysis of historical data at the Dewey
	Terrace Project with the goal of identifying and quantifying additional uranium
•	mineralization.
	A vancing	he Gas Hills Project - In August 2021, the Company filed a maiden
	independent PEA on its Gas Hills Project. The base case economic assessment
	resulted in a pre-income tax IRR of 116% and a pre-income tax NPV of $120.9
	million when applying an eight percent discount rate. Using the same discount
	rate, the post-income tax IRR is 101% and the post-income tax NPV is $102.6
	million. The Company is now focused on commencing the permitting process and
•	growing the ISR-amenable resources at the Gas Hills Project.
	Fu ure uranium p oduction off-take - the Company will continue engaging with
	potential customers for future uranium production off-take. Although the
	Company plans to continue these discussions in parallel with the advancement of

the Dewey Burdock Project, the level of these activities will be dependent on the market environment.

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