CanAlaska Uranium : First Quarter Report July 31, 2021 - MD&A and Financial Statements

CanAlaska Uranium Ltd. - MD&A July 31, 2021

Page 1 of 18

CanAlaska Uranium Ltd.

CVV - TSX-V CVVUF - OTCQB DH7N - Frankfurt

Management Discussion and Analysis

For the First Quarter and Three Months Ended

July 31, 2021

Dated September 14, 2021

For further information on the Company reference should be made to the Company's public filings which are available on SEDAR. Information is also available at the Company's website www.canalaska.com. In addition, reference should be made to the risk factors section of the most recently filed Annual Information Form ("AIF") or the Company's audited consolidated financial statements for the year ended April 30, 2021. The following information is prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the IASB and denominated in Canadian dollars, unless otherwise noted. This MD&A should be read in conjunction with the Company's unaudited condensed interim consolidated financial statements for the three months ended July 31, 2021.

Table of Contents:
1.	OVERVIEW OF THE COMPANY AND STRATEGY	2
2.	MILESTONES AND PROJECT UPDATES	3
3.	FINANCIAL POSITION	10
4.	EXPENDITURES REVIEW	13
5.	CASHFLOW REVIEW	14
6.	OTHER MATTERS	14
7.	QUARTERLY FINANCIAL INFORMATION	18

This MD&A contains forward-looking information. Refer to Section 6 "Forward-Looking Statements" and "Risks Factors" for a discussion of the risks, uncertainties and assumptions relating to such information.

www.canalaska.com

CanAlaska Uranium Ltd. - MD&A July 31, 2021

Page 2 of 18

1. OVERVIEW OF THE COMPANY

• Over 9 projects covering 177,000 hectares focused on Uranium, 1 project covering 52,000 hectares focused on Diamonds and 7 projects covering 30,000 hectares focused on nickel, copper and other minerals (section 1.1)
• Cash and cash equivalent resources of $7.2 million (as at July 31, 2021)
• 83,528,375 common shares issued and outstanding (September 14, 2021)

1.1 Profile and Strategy

The Company is an exploration stage company engaged in the acquisition and exploration of mineral properties, principally in Canada. The Company aims to acquire and advance its projects to a stage where they can be exploited at a profit or it can arrange joint ventures, whereby other companies provide funding for development and exploitation. The Company's principal focus has been the exploration for high-grade uranium deposits in the Athabasca Basin area of Saskatchewan and the exploration for copper/nickel in the same region. There are several projects on which the Company has expended recent efforts. The West McArthur project is under a joint venture 30% with Cameco Corporation ("Cameco"), the Cree East project was under a 50% joint venture with a Korean Consortium up to early July 2017, the Moon South project is under option to Denison Mines, the NW Manitoba project is under option to Northern Uranium Corp ("Northern Uranium") and the Quesnel project under option to Omineca Mining and Metals Ltd. Going forward it is expected that the Company will focus its effort on West McArthur, Cree East and selected base metal and precious metal opportunities. The Company is actively marketing the remainder of its projects for option, joint venture or sale.

Table 1: Canadian Strategic Property Summary
Property / Project Name	Notes	Hectares
West McArthur	Joint Venture with Cameco Corporation	36,000
Cree East	Seeking Venture Partner.	58,000
NW Manitoba	Joint Venture with Northern Uranium Corp.	23,000
Moon South	Joint Venture with Denison Mines	3,000
Hunter and Strong	Seeking Venture Partner	19,000
Manibridge	Option Agreement with D Block Discoveries Inc.	4,000
Quesnel	Option Agreement with Omineca Mining and Metals Ltd	1,000
NE Wollaston	Seeking Venture Partner	43,000
West Athabasca Kimberlite	Seeking Venture Partner.	52,000

The Company's exploration activities are managed through CanAlaska offices maintained in Vancouver, BC and Saskatoon, SK.

The Company believes that the fundamentals of the nuclear power industry and the economic superiority of uranium over other energy fuels will ensure the long-term future of global uranium markets and prices. Since 1985, CanAlaska has expended over $84 million of the total equity of $95 million on exploration and research towards the advancement of uranium, nickel and diamond discovery on our project areas. The information gained from this work has provided the Company with significant evidence about the nature and location of mineral rich hydrothermal systems in areas of the Athabasca where previous information was lacking. The increase in understanding of the geology of the target areas, and the integration of modern geophysical methods with data processing to get more precise target definition at depth gives management the confidence to continue exploration for large scale uranium deposits on our projects.

1.2 Strategic and Operating Intent

• Complete equity financing options over the next months
• Targeted marketing of uranium projects for financing
• Targeted marketing of non-core projects
• Strong commitment to option, joint venture or sale of individual exploration projects
• Evaluate alternate commodities and projects suitable for market financing, or acquisition and sale
• Company believes that it has the projects, strategic partners, people and knowledge base, corporate treasury and fund raising ability to maintain a position in the uranium exploration sector, but, due to increasingly difficult market conditions facing junior mining and junior uranium exploration companies, management has taken steps to streamline non-discretionary expenditures and financial overheads

www.canalaska.com

CanAlaska Uranium Ltd. - MD&A July 31, 2021

Page 3 of 18

As of September 13, 2021, the Company had 83,528,375 shares outstanding with a total market capitalization of $59.3 million. The Company's shares trade on the TSX Venture Exchange ("CVV") and are quoted on the OTCQB in the United States ("CVVUF") and the Frankfurt Stock Exchange ("DH7N").

The consolidated financial statements have been prepared under International Financial Reporting Standards ("IFRS") applicable to a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business. For the three months ended July 31, 2021, the Company reported a loss of $1.4 million and as at that date had cash and cash equivalents of $7.2 million, net working capital balance of $7.3 million and an accumulated deficit of $95.0 million.

The Company does not generate recurring revenues from operations and other factors as noted may cast significant doubt regarding the Company's ability to continue as a going concern. Management believes that the cash on hand is sufficient to meet corporate, administrative and selected exploration activities for at least the next twelve months. Management may either need to dilute its ownership in its properties or secure additional financing to continue to advance the development of its exploration projects. Management has taken steps to streamline non-discretionary expenditures and financial overheads and is working to option, joint venture or sell its individual exploration projects.

2. MILESTONES AND PROJECT UPDATES

1. Overview- May 1, 2021 to September 14, 2021
2. • CanAlaska - Denison Mines JV to drill Moon Lake South project (September 2021)
   • CanAlaska stakes new target in Eastern Athabasca - North Millennium project (August 2021)
   • CanAlaska Cameco JV to Drill West McArthur (August 2021)
   • CanAlaska appoints Two new Board Members and Advisor (July 2021)
   • CanAlaska appoints new Vice President Exploration (July 2021)
   • CanAlaska provides update on Manitoba Nickel projects (June 2021)
   • CanAlaska stakes fifth Thompson Nickel Belt project (June 2021)
3. Project Detail

Overview

The Company currently has 16 projects within the Athabasca basin area. The majority of the first quarter 2022 exploration spend was carried out on the Company's West McArthur project, which was under an option to Cameco and is now under a 30% joint venture with Cameco. In the first three months of fiscal 2022, the Company spent approximately $412,000 on exploration costs in the Athabasca Basin area.

Exploration spending in the first quarter of 2022 is up from the same comparative quarter of 2021. The increase exploration spend is partially due to the impact of the coronavirus global pandemic which impacted the Company's activities last year.

The following table summarizes the Company's expenditures for the three months ended July 31, 2021.

		West		Other	Other and
Table 2: ($000's)	West	Athabasca		Athabasca	Generative
Total Exploration	McArthur	Kimberlite	Waterbury	Projects	Projects	Total
Camp Cost & Operations	14	-	-	-	8	22
Drilling	93	-	-	-	-	93
General & Admin	13	12	2	21	98	146
Geochemistry	-	-	12	-	-	12
Geology	-	68	3	-	-	71
Geophysics	-	-	-	45	35	80
Other	-	-	-	5	7	12
Gross Expenditures	120	80	17	71	148	436
Reimbursement	-	-	-	(24)	-	(24)
Net Expenditures	120	80	17	47	148	412

www.canalaska.com

CanAlaska Uranium Ltd. - MD&A July 31, 2021

Page 4 of 18

The following section contains a comparative breakdown of project expenditures for the Company's significant projects.

2.2.1 West McArthur Project, Saskatchewan - Cameco

The West McArthur project in the Athabasca Basin, Saskatchewan, was optioned in April 2007 to Mitsubishi Development Pty Ltd., a subsidiary of Mitsubishi Corporation of Japan. Under the option agreement, Mitsubishi earned a 50% interest in the property and in January 2016, the Company entered into a buy back agreement with Mitsubishi for their 50% interest to then hold a 100% interest in the property. In February 2016, the Company then entered into an option agreement with Cameco Corporation. The option agreement enables Cameco to earn up to a 60% interest in the West McArthur project through total expenditures of $12.5 million until February 2022 ($725,000 received) consisting of cash payments to the Company and accelerating exploration programs, culminating in a joint venture. In October 2018, the Company entered into a 30/70 joint venture agreement with Cameco Corporation.

The West McArthur project is located between 6 and 30 kilometres west of the producing McArthur River uranium mine operated by Cameco Corp, and covers approximately 36,000 hectares. On the property, there is evidence of hydrothermal alteration extending well into the sandstone, matching the typical alteration model of Athabasca unconformity style uranium deposits. There is evidence of uranium mineralization from drill testing in multiple areas, either as enrichment (locally high grade) at the unconformity or in basement stringers. The most compelling features for further exploration are the uranium values in sandstone higher in the stratigraphy, the hematized and broken rock in the sandstone, and the pattern of basement offsets and geophysical conductivity.

The project is accessible during the winter drill season by seasonal winter ice roads and winter trails and during the summer exploration season by air and water. There is no physical plant or permanent infrastructure on the property and no source of power. However, the property is in close proximity to the McArthur River uranium mine operated by Cameco. There are multiple extensive lakes, which can provide a source of water for the project.

The mineral rights for West McArthur were acquired between October 2004 and February 2009 from the Ministry of Energy and Resources in the province of Saskatchewan, Canada. The claim numbers are as follows, S-107561,S-107562,S-107563,S-107565, S- 107773, S-108010,S-108011,S-108012,S-111412S-111413,S-111511 and S-111512. The mineral rights to West McArthur are valid and in good standing with the earliest claim, requiring renewal in October 2029 with no further exploration expenditures required. An annual assessment report is required to be filed by the Company with the Ministry of Energy and Resources to disclose the exploration activities on this claim. There is no fee for filing the annual assessment report.

The property has undergone a series of exploration programs, including extensive geophysics and drilling since 2005.

In September 2019, the Company reported that summer drilling was completed at the West McArthur uranium project. The unconformity related uranium mineralization intersected in Cameco's discovery holes WMA042 and WMA042-2, has been extended 50 metres to the south and 200 metres to the west and tied to down-hole geophysics imaging of the C10 conductor package. With downhole geophysics we have now located the C10 conductor horizon, approximately 100 metres south of the original high-grade discovery. There is highly elevated uranium, lead, cobalt, boron, nickel and copper in the mineralization and associated alteration halos in all of the drill holes where assays have been received to date. The program has successfully extended the discovery footprint of holes drilled by Cameco during their recent work programs on the property.

In October 2019, the Company reported high-grade uranium in final assay data for the recent drill program at the West McArthur uranium project. The mineralization containing high uranium, as well as base metal mineralization, is similar in character to the nearby high-grade Fox Lake uranium deposit of Cameco and Orano. Assay data for the latest drill holes, in particular for drill hole WMA055-2, has upgraded earlier U3O8 values up to 7.95%.

In October 2019, the Company reported that the latest West McArthur high-grade drill results include 6.8% U3O8 over 0.70 metres within a broad 650 metre by 400 metre geochemical halo - extending from bedrock to near-surface - provide strong support for continued drilling of the Grid 5 target zone in 2020.

In January 2020, the Company reported that crews resumed drilling at the West McArthur uranium project. The 2019 drill program successfully extended the discovery footprint of holes drilled by Cameco during their recent work programs on the property. The mineralization, containing high-grade uranium as well as base metal mineralization, is similar in character to the nearby high-grade Fox Lake uranium deposit of Cameco and Orano. Drilling in the winter will focus on a 300 metre length of the C10 conductor where current drilling has indicated the presence of a strong hydrothermal system and a well mineralized target.

www.canalaska.com

CanAlaska Uranium Ltd. - MD&A July 31, 2021

Page 5 of 18

In April 2020, the Company reported that crews were able to complete four drill holes from a planned six hole winter program at the West McArthur uranium project. Assays and data from the drill holes continue to show abundant structures in the sandstone above the unconformity near a large, yet to be tested, target. The last hole of the program WMA060, together with holes WMA054 and WMA058, confirms the model of a proximal mineralizing feeder zone oriented in a north to north-west direction.

In August 2021, the Company announced a 5,000 metre summer drill program at the West McArthur uranium project and it will fully fund the exploration in 2021 to increase its interest. Drilling to date has discovered a large sandstone alteration halo above high-grade uranium mineralization intercepted in replacement zones at the unconformity. The first drilling of the season will continue to advance this discovery with the next drill holes planned to intercept the southwestern extension of the main mineralized fault structure.

The West McArthur property is without known reserves and any proposed program is exploratory in nature.

2.2.2 Cree East Project, Saskatchewan

The Cree East project is located in the south-eastern portion of the Athabasca Basin, 35 kilometres west of the formerly producing Key Lake mine and 5 to 22 kilometres north of the south rim of the Athabasca Basin. The project is comprised of 17 contiguous mineral claims totalling approximately 58,000 hectares.

In July 2017, the Company reported that it and its Korean partners, Hanwha, KORES, KEPCO, and SK Networks, had entered into a buy back agreement for the Korean partners' 50% interest in the Cree East uranium project limited partnership. The Company bought back the 50% interest in the limited partnership earned by the Korean partners in consideration for certain indemnities which it provided to the Partners. In addition, all funds previously invested by the partners that was held in the partnership's bank account on the date of closing, was returned to the partners at closing. The Company owned an unencumbered 100% interest in the project.

The project is accessible during the winter drill season by seasonal winter ice roads and winter trails and during the summer exploration season by air and water. There is no physical plant or permanent infrastructure on the property and no source of power. There are multiple extensive lakes which can provide a source of water for the project.

The mineral rights for Cree East were acquired between November 2004 and June 2010 from the Ministry of Energy and Resources in the province of Saskatchewan, Canada. The claim numbers are as follows, S-107757,S-107774,S-107775,S-107776,S-107777, S- 107778, S-107779,S-107780,S-108357,S-108358,S-108382,S-108383,S-108384,S-108385,S-108386,S-108387 and S-111809. The mineral rights to Cree East are valid and in good standing with the earliest claim requiring renewal in November 2020 with no further exploration expenditures required. An annual assessment report is required to be filed by the Company with the Ministry of Energy and Resources to disclose the exploration activities on this claim. There is no fee for filing the annual assessment report.

www.canalaska.com