Eloro Resources : Management Discussion and Analysis - March 31, 2022 - Eloro Resources Ltd.

Eloro Resources Ltd.

Management's Discussion and Analysis

This Management's Discussion and Analysis ("MD&A") provides discussion and analysis of the financial condition and results of operations of Eloro Resources Ltd. (the "Company") for the year ended March 31, 2022 and should be read in conjunction with the unaudited interim consolidated financial statements and the accompanying notes.

The MD&A is the responsibility of management and is dated as of July 29, 2022.

All dollar amounts in the MD&A are stated in Canadian dollars unless otherwise indicated.

Additional information relating to the Company is available on SEDAR at www.sedar.comand the Company's website at. www.elororesources.com.

Forward-Looking Statements

This MD&A may contain, without limitation, statements concerning possible or assumed future operations, performance or results preceded by, followed by or that include words such as "believes", "expects", "potential", "anticipates", "estimates", "intends", "plans" and words of similar connotation, which would constitute forward-looking statements. Forward-looking statements are not guarantees. The reader should not place undue reliance on forward-looking statements and information because they involve risks and uncertainties that may cause actual operations, performance or results to be materially different from those indicated in these forward-looking statements. The Company is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or other factors. These cautionary statements expressly qualify all forward-looking statements in this MD&A.

See page 11 for Material assumptions and risk factors for forward-looking statements.

The Company

The Company is a Canadian-based exploration and development company with a silver-tin polymetallic property in Bolivia, a gold-silver property in Peru and base metal properties and royalties in the province of Quebec.

The Company is a reporting issuer in Ontario, Alberta and British Columbia and its common shares are listed for trading on Tier 2 of the TSX Venture Exchange ("TSXV") under the symbol ELO, on the OTCQX under the symbol ELRRF, and on the Frankfurt Stock Exchange under the symbol WKN 909833.

Overall Performance

Appointment of independent advisor

On June 6, 2022, the Company appointed Peter Marrone, a shareholder of the Company, as an independent advisor to provide support and strategic advice to management on matters of project advancement and business development in relation to its Iska Iska project. Mr. Marrone is Executive Chairman of Yamana Gold Inc., which he founded in 2003 and which recently announced that it is to be acquired by Gold Fields Limited, a combination that creates a world-class, globally diversified company with regional relevance across premier, rules-based mining jurisdictions that is underpinned by low- cost, long-life mines. Mr. Marrone has a long track record of successful mining start-ups and investments with more than 35 years of mining, business and capital markets experience. Mr. Marrone also currently sits on the board of directors, and is one of the founders, of Aris Gold Corporation which holds one of the best portfolios of producing and development stage assets in Colombia. Mr. Marrone has also been the head of investment banking at a major Canadian investment bank and before that practised law in Toronto with a strong focus on corporate law, securities law and international transactions.

Grant of stock options and restricted share units

On January 19, 2022, the Company granted 2,350,000 restricted share units to officers and consultants which cannot be settled until December 31, 2025 and are subject to performance related milestones at Iska Iska.

On March 3, 2022, the Company granted 1,525,000 stock options to officers, directors and consultants, entitling the holder to purchase one common share for $4.65 until March 3, 2027.

On May 30, 2022, the Company granted to a consultant 100,000 stock options entitling the holder to purchase one common share for $3.42 until May 30, 2027.

On June 6, 2022, the Company granted to a consultant:

1. 750,000 stock options entitling the holder to purchase one common share for $3.68 until February 18, 2027; and
2. 750,000 restricted share units with a redemption date of June 6, 2025 and vest in 3 annual instalments.

Option payment advance

On July 29, 2020, the Company granted a 2% interest in its wholly-owned Bolivian subsidiary, Minera Tupiza S.R.L. ("Minera Tupiza") to an officer of Minera Tupiza. The Company has an option to increase its interest in Minera Tupiza to 99% by purchasing a 1% interest from the officer for US$3,000,000. At March 31, 2022, the Company has made installment payments of US$200,000 on account of the option. On May 24, 2022, the Company made a further instalment payment of US$300,000.

Bought deal financing

On May 19, 2022, the Company completed a bought deal financing of 3,007,710 units of at a price of $3.25 per unit for gross proceeds of $9,775,057. Each unit consisted of one common share one-half of one warrant, with each of the 1,503,855 whole warrants entitling the holder to purchase one common share for $4.75 until May 19, 2024. In connection with the financing, the Company paid a cash commission of $586,503 (representing 6% of the gross proceeds of the financing), issued 180,462 compensation warrants (representing 6% of the number of units issued pursuant to the financing) entitling the holder to purchase one common share for $3.25 until May 19, 2024.

Technical report

The Company filed an updated National Instrument 43-101 ("NI 43-101") Technical Report on Iska Iska completed by Micon International Limited ("Micon"), dated May 1, 2022, titled "Technical Report on the Exploration and Diamond Drilling of the Iska Iska Polymetallic Project, Sud Chichas Province, Department of Potosi, Bolivia" (see page 4).

Iska Iska option payment

As at March 31, 2022, the Company had made installment payments aggregating US$3,000,000, including a US$2,700,000 payment made on October 1, 2021, towards the US$10,000,000 option payment required to acquire a 99% interest in Iska Iska (see Iska Iska section below). On June 24, 2022, the Company made a further installment payment of US$400,000.

Status of use of proceeds for January 2021, March 2021 and May 2022 bought deal financings

The status of the use of proceeds outlined in the Company's December 2020 prospectus (relating to the Company's financing completed in January 2021) is as follows (as of July 19, 2022):

	Proposed	Actual
	Metres	Cost	Metres	Cost
Drilling		$		$
Santa Barbara/Huayra Kasa	6,000	1,920,000	10,000	3,660,000
Central Breccia	4,000	1,280,000
Other
Expenses of the offering		350,000		350,000
Geophysics (ground magnetics)		60,000		60,000
General office, operating expenses and other corporate purposes		990,000		990,000
Other properties in Peru (La Victoria)		125,000		87,000
Other properties in Bolivia		125,000
Contingencies		265,000		265,000
	10,000	5,115,000	10,000	5,412,000

2

The status of the use of proceeds outlined in the Company's March 2021 prospectus is as follows (as of July 19, 2022):

	Proposed	Actual
	Metres	Cost	Metres	Cost
Drilling		$		$
Santa Barbara	6,000	1,950,000	28,189	8,800,000
Central Breccia	15,000	4,875,000	5,015	1,551,000
Porco (South)	16,000	5,200,000	9,508	2,941,000
Huayra Kasa (see note)	2,000	650,000	1,427	442,000
Other targets (see note)	3,000	975,000	860	266,000
Pache (see note)	3,000	975,000	‒	‒
	45,000	14,675,000	44,999	14,000,000
Other
Infrastructure improvements		754,000		202,000
Geophysics		325,000		335,000
Resource estimate, metallurgical studies, mineralogical studies		468,000		320,000
Other		473,000		460,000
Payment of US$2,500,000 pursuant to an option to acquire a 99%		3,250,000		3,939,000
interest in Iska Iska for US$10,000,000 (paid US$3,100,000)
		5,270,000		5,256,000
Total		19,895,000		19,256,000

Note: The meterage originally allocated for Huayra Kasa/Other Targets and Pache will be reallocated for resource definition at Santa Barbara Breccia Pipe as the mineralized zone has been expanded significantly since the March 2021 Prospectus.

The status of the use of proceeds outlined in the Company's May 2022 prospectus is as follows (as of July 19, 2022):

	Proposed	Actual
	Cost	Cost
Drilling	$	$
Complete phase I work program under the Technical Report	5,000,000	‒
Commence phase II work program under the Technical Report	1,490,047	‒
Other
Expenses of the offering	760,003	760,000
Payment of US$1,000,000 pursuant to an option to acquire 99%	1,250,000	‒
interest in Iska Iska for US$10,000,000
	8,500,003	760,000

Iska Iska

On January 6, 2020, the Company signed a Definitive Agreement, whereby its Bolivian subsidiary, Minera Tupiza was granted an option to acquire a 99% interest in Iska Iska, a silver-tin polymetallic property consisting of one mineral concession totaling 900 hectares ("ha") located in southern Bolivia. In order to acquire its interest in Iska Iska, the Company will conduct an exploration and development program in the 4 years ended January 6, 2024 and issue common shares and make an option payment, as follows:

		Common shares	Option payment
		Number	$	US$
February 5, 2020 (issued)	250,000	100,000	‒
January 6, 2022	(issued)	250,000	‒	‒
January 6, 2024	(US$3,400,000 paid)	‒	‒	10,000,000
		500,000	100,000	10,000,000

3

Iska Iska is located in the Sud Chichas Province of the Department of Potosi, southern Bolivia, approximately 48 kilometres ("km") north of Tupiza city. The project is road accessible and royalty-free,wholly-controlled by the title holder, Empresa Minera Villegas S.R.L. and can be classified as a major silver-tin polymetallic porphyry-epithermal complex associated with a Miocene possibly collapsed/resurgent caldera, emplaced on Ordovician age rocks with major breccia pipes, dacitic domes and hydrothermal breccias. The caldera is 1.6km by 1.8km in dimension with a vertical extent of at least 1 km. Mineralization age is similar to Cerro Rico de Potosi and other major deposits such as San Vicente, Chorolque, Tasna and Tatasi located in the same geological trend.

Figure 1: Location Map - Iska Iska Silver-Tin Polymetallic Property, Bolivia

An updated NI 43-101 Technical Report on Iska Iska was completed by Micon, dated May 1, 2022, and is available on the Company's website and under its filings on SEDAR. Following the completion of the NI 43-101 Technical Report, the next phase in the development is geared towards the preparation of a maiden NI 43-101 compliant mineral resource estimate. To ensure that the highest level of technical and commercial standards is upheld, the Company has retained Micon as Independent Engineer to review, on an on-going basis, all its exploration activities and data collection methods. Micon is also supervising the metallurgical test-work in progress.

The Company began underground diamond drilling from the Huayra Kasa underground workings at Iska Iska on September 13, 2020. On November 18, 2020, the Company announced the discovery of a significant breccia pipe with extensive silver polymetallic mineralization just east of the Huayra Kasa underground workings and a high-gradegold-bismuth zone in the underground workings. On November 24, 2020, the Company announced the discovery of the Santa Barbara Breccia Pipe ("SBBP") approximately 150m southwest of the Huayra Kasa underground workings.

Subsequently, on January 26, 2021, the Company announced significant results from the first drilling at the SBBP including the discovery hole DHK-15 which returned 129.60 g Ag eq/t over 257.5m (29.53g Ag/t, 0.078g Au/t, 1.45%Zn, 0.59%Pb, 0.080%Cu, 0.056%Sn, 0.0022%In and 0.0064% Bi from 0.0m to 257.5m. Subsequent drilling has confirmed significant values of Ag-Sn polymetallic mineralization in the SBBP and the adjacent Central Breccia Pipe ("CBP"). A substantive mineralized envelope which is open along strike and down-dip extends around both major breccia pipes. Continuous channel sampling of the Santa Barbara Adit located to the east of SBBP returned 442 g Ag eq/t (164.96 g Ag/t, 0.46%Sn, 3.46% Pb and 0.14% Cu) over 166m including 1,092 g Ag eq/t (446 g Ag/t, 9.03% Pb and 1.16% Sn) over 56.19m. The west end of the adit intersects the end of the SBBP.

Since the initial discovery hole on the SBBP, the Company has released a number of significant drill results in the SBBP and the surrounding mineralized envelope, which along with geophysical data has defined a target zone 1400, along strike, 500m wide and that extends to a depth of 600m. This zone is open along strike to the northwest and southeast as well as to the southwest. The Company's nearer term objective is to outline a maiden NI 43-101 compliant mineral resource within this large target area. This work is advancing well with the mineral resource targeted to be completed in Q4 2022. Exploration drilling is also planned on other major targets in the Iska Iska Caldera Complex, including the Porco and Mina 2 areas.

4

On June 13, 2022, the Company provided an update on its preliminary metallurgical testwork program for Iska Iska. The work program including testwork for development of a preliminary metallurgical flowsheet and preliminary mineralogical characterization, is being carried out by Blue Coast Research Ltd. ("Blue Coast") based in Parksville, BC. The objective is to develop the preliminary flotation flowsheet to maximize lead, zinc and precious metals into saleable concentrates in the Santa Barbara polymetallic deposit and to develop a preliminary flowsheet for tin in both the Santa Barbara and the deeper tin-dominant mineralization.

Blue Coast has world-class metallurgical testing, analytical services, flowsheet development, consulting, and operational support. Their team has been augmented with the addition of Mr. Mike Hallewell, C.Eng., a senior independent mineral processing consultant based in Cornwall, England, who has extensive specialist knowledge in the recovery of tin at mining operations and exploration projects worldwide.

The metallurgical testing is being directed by Richard Gowans, P.Eng., Principal Metallurgist for Micon, who is an independent Qualified Person as defined under NI 43-101.

The metallurgical testing program at Blue Coast is progressing well. The initial focus of their work was on the Santa Barbara polymetallic mineralization for Ag, Zn and Pb recovery based on samples from discovery hole DHK15 and hole DHK-18. The tin-rich zone in hole DSB-06 was also selected for testing but at that time it was uncertain how this mineralization was connected to the Santa Barbara polymetallic deposit. However, with further drilling and solid work by the Company's geological and geophysical team, it is now known that there is extensive tin mineralization at depth beneath the polymetallic mineralization. Once testing is completed on DSB-06, the Company will be adding additional samples from tin-rich holes to enable further development of an appropriate flow sheet for tin. While arsenic and other potentially deleterious elements are being tracked during the testwork program, these are not anticipated to be a material issue at the levels in current tests.

Significantly, on July 21, 2022, the Company released the highest grade, longest intersection thus far at Iska Iska, including the highest-grade Ag to date of 44.75 g Ag/t over 349.08m from drill hole DSBU-10.

In connection with the Company's ongoing Environmental Social Governance ("ESG") initiatives,he following studies have been or are currently being carried out by Minera Tupiza's environmental staff of and environmental consultants at Iska Iska:

• Collection of existing environmental documentation on the Porvenir concession, where the Iska Iska project is under exploration, including the review of environmental legal documents.
• Environmental inspection and evaluation of the Porvenir concession.
• Implementation of warning and information signs.
• Preparation of detailed environmental studies required by the Bolivian environmental authority.
• Regular monitoring of soil, noise, air and water in accordance with current environmental regulations, in all the exploration work.
• Control of solid and liquid waste in exploration work.
• Construction of sedimentation and infiltration pits for the final disposal of sludge from the cutting of samples.
• Construction and implementation of sanitation stations.
• Evaluation of all existing underground workings on the property including Huayra Kasa, Santa Barbara, Porco and Mina 2 area.
• Preparation of a baseline environmental study for Iska Iska.

The Company has a very active program led by ESG Manager Ana Moran, Attorney at Law and Dr. Osvaldo Arce, P.Geo. Major ESG initiatives completed or ongoing include: community support for COVID-19 in Tupiza and surrounding communities, the building of sanitation stations in homes in the communities of Almona and La Torre, which are the closest communities to the Iska Iska property, 5km east and 5km southeast, respectively, working with the Women's Association of Almona and La Torre to support training courses in baking and embroidery as well as other social activities, and support for school programs including providing classroom materials, snacks during breaks and support for teachers.

Additional ESG activities planned for 2022 include: i) continued implementation of courses, workshops, classes, materials, and other requirements of social projects focused on women, children, and youth groups in Almona, La Torre and additional surrounding communities,ii) construction of additional sanitation stations in the communities of Almona, La Torre and other surrounding communities, iii) delivery of equipment for community medical centers,iv) improving educational services of the community schools by delivering computer equipment, and v) support for local community strengthening and development, through specialized services in consultation with the communities.

5