EXPLOITS DISCOVERY CORP.

(formerly MARINER RESOURCES CORP.)

(the "Company" or "Exploits")

Form 51-102F1

MANAGEMENT'S DISCUSSION and ANALYSIS

FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2021

The following Management's Discussion and Analysis ("MD&A") supplements, but does not form part of, the unaudited financial statements of the Company and the notes thereto for the three and nine months ended July 31, 2021, and 2020 (the "Financial Statements"). Consequently, the following discussion and analysis of the results of operations and financial condition of Exploits should be read in conjunction with the Financial Statements which have been prepared in accordance with International Financial Reporting Standards ("IFRS"). All amounts are stated in Canadian dollars unless otherwise indicated. The reader should be aware that historical results are not necessarily indicative of future performance. This MD&A has been prepared based on information known to management as of September 24, 2021.

Forward-Looking Statements

This MD&A contains "forward-looking statements" within the meaning of applicable Canadian securities legislation, which include all statements, other than statements of historical fact that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future. These include, without limitation:

  • the Company's anticipated results and developments in the Company's operations in future periods;
  • planned exploration and development of its mineral properties;
  • planned expenditures and budgets;
  • evaluation of the potential impact of future accounting changes;
  • estimates concerning share-based compensation and carrying value of properties; and
  • other matters that may occur in the future.

These statements relate to analyses and other information that are based on expectations of future performance and planned work programs.

With respect to forward-looking statements and information contained herein, the Company has made a number of assumptions with respect to, including among other things, the price of gold and other metals, economic and political conditions, and continuity of operations. Although the Company believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that forward- looking statements or information contained or incorporated by reference herein will prove to be accurate.

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements, including, without limitation:

  • fluctuations in mineral prices;
  • the Company's dependence on a limited number of mineral projects;
  • the nature of mineral exploration and mining and the uncertain commercial viability of certain mineral deposits;
  • the Company's lack of operating revenues;
  • the Company's ability to obtain necessary financing to fund the development of its mineral properties or the completion of further exploration programs;
  • governmental regulations and specifically the ability to obtain necessary licenses and permits;
  • risks related to the Company's mineral properties being subject to prior unregistered agreements, transfers, or claims and other defects in title;
  • changes in environmental laws and regulations which may increase costs of doing business and restrict the Company's operations;
  • risks related to the Company's dependence on key personnel; and
  • estimates used in the Company's financial statements proving to be incorrect.

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This is not an exhaustive list of the factors that may affect the Company's forward-looking statements. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statements. The Company's forward-looking statements are based on beliefs, expectations and opinions of management on the date the statements are made. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

Description of Business

Exploits Discovery Corp. (formerly Mariner Resources Corp.) was incorporated under the Business Corporations Act (British Columbia) on May 28, 2018. The Company's head office is at 595 Burrard St., Suite 3043, Vancouver, BC, V7X 1J1. The Company is focused on evaluating, acquiring, and exploring mineral properties with significant potential for advancement from discovery through to production, in Canada and abroad. On May 30, 2019, the common shares of the Company were listed on the Canadian Securities Exchange (the "Exchange" or "CSE") and trade under the trading symbol "NFLD".

The Company's principal property interests are its gold exploration properties located in the Exploits Subzone in Newfoundland and Labrador, as pictured here.

Acquisition of Exploits Gold Corp.

On September 18, 2020, the Company acquired a 100% interest in Exploits Gold Corp., a private company focused on gold exploration in the Exploits Subzone of central Newfoundland and Labrador. Under the terms of the agreement, the Company issued an aggregate of 18,910,752 common shares and 1,000,000 options to the shareholders of Exploits Gold Corp. via a share exchange agreement. Exploits Gold Corp. held the Jonathan's Pond property and additional claims surrounding the Company's Mount Peyton property, and as a result of this acquisition both of these properties were added to the Company'sportfolio.

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Property Acquisitions for 2020 & 2021

(more information on the property acquisitions can be found under the heading "Mineral Properties")

Middle Ridge Property

On July 8, 2020, the Company entered into an Option agreement to acquire a 100% interest in the Middle Ridge Property by making a cash payment of $240,000 and issuing 1,800,000 common shares of the Company (recorded at a fair value of $306,000 or $0.17 per share). The Property is comprised of 558 mineral claims and is located in Central Newfoundland and is subject to a 2.0% net smelter royalty ("NSR").

On July 31, 2020, the Company acquired a 100% interest in an additional 1,024 mineral claims, expanding its Middle

Ridge and True Grit Properties, by issuing 6,850,000 common shares of the Company (recorded at a fair value of $2,534,500 or $0.37 per share) allocated as $937,765 to True Grit and $1,596,735 to Middle Ridge.

Great Bend Property

On July 29, 2020, the Company staked 1,536 claims in central Newfoundland and Labrador for a total cost of $105,000, which the Company collectively now refers to as the Great Bend Property.

In August 2020, the Company acquired a 100% interest in additional mineral claims, expanding the Great Bend property, by issuing 1,000,000 common shares (with a fair value of $600,000). The Company will issue another 1,000,000 common shares upon completion of a pre-feasibility study (with a fair value of $600,000). As of October 31, 2020, 1,000,000 common shares are recorded as obligation to issue shares. These mineral claims are subject to a 2% NSR which the Company can repurchase half (1%) for $1,000,000.

On August 14, 2020, the Company acquired a 100% interest in an additional 136 mineral claims, expanding its Great Bend Property, by issuing 103,316 common shares of the Company (recorded at a fair value of $61,990, or $0.60 per share).

True Grit Property

On July 31, 2020, the Company acquired a 100% interest in the True Grit Property by issuing 150,000 common shares of the Company (recorded at a fair value of $55,500 or $0.37 per share) and made a cash payment of $14,000. The Property is comprised of 614 mineral claims and is located in Central Newfoundland. Certain mineral claims are subject to a 2.0% NSR.

On August 14, 2020, the Company acquired a 100% interest in an additional 370 mineral claims, expanding its True Grit Property, by issuing 281,081 common shares of the Company (recorded at a fair value of $168,648, or $0.60 per share).

Mount Peyton Property

On August 5, 2020, the Company acquired a 100% interest in the Mt Peyton Property by issuing a cash payment of $2,000 and issuing 500,000 common shares of the Company (recorded at a fair value of $185,000 or $0.37 per share). In addition, the Company must issue a further 5,000 common shares on the 6th through 20th anniversary of signing the agreement. The Property is comprised of 51 mineral claims and is located in Central Newfoundland.

On August 14, 2020, the Company acquired a 100% interest in an additional 920 mineral claims, expanding its Mt Peyton Property, by issuing 504,426 common shares of the Company (recorded at a fair value of $302,655, or $0.60 per share).

On September 18, 2020, the Company expanded its Mt Peyton Property with 811 additional claims through its acquisition of Exploits Gold Corp. (more information on this transaction can be found on page 2 under the heading "Acquisition of Exploits Gold Corp").

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Gazeebow Property

On August 10, 2020, the Company acquired a 100% interest in the Gazeebow Property by issuing a cash payment of $7,000 and issuing 600,000 common shares of the Company (recorded at a fair value of $360,000, or $0.60 per share). The Property is comprised of 98 mineral claims and is located in Central Newfoundland. These mineral claims are subject to a 2.0% NSR.

Dog Bay Property

On August 10, 2020, the Company entered into an Option agreement to acquire a 100% interest in the Dog Bay Property by making a cash payment of $30,000 and issuing 1,000,000 common shares of the Company (recorded at a fair value of $600,000, or $0.60 per share). In addition, the Company must issue further payments as follows:

  • $40,000 cash and 400,000 common shares on the 1st anniversary; and
  • $50,000 cash and 500,000 common shares on the 2nd anniversary; and
  • $60,000 cash and 600,000 common shares on the 3rd anniversary; and
  • $70,000 cash and 1,000,000 common shares on the 4th anniversary; and
  • $10,000 in cash or common shares on the 5th to 10th anniversary; and
  • $50,000 in cash or common shares on the 11th to 20th anniversary.

The Property is comprised of 485 mineral claims and is located in Central Newfoundland and is subject to a 2.0% NSR.

On August 14, 2020, the Company acquired a 100% interest in an additional 256 mineral claims, expanding its Dog Bay Property, by issuing 194,477 common shares of the Company (recorded at a fair value of $116,686, or $0.60 per share).

In March 2021 the Company acquired a 100% interest in additional claims in the 'Hicks-Dog Bay' area, issuing 550,000 shares of the Company (with a fair value of $264,000). These claims are subject to a 2% NSR to one of the underlying vendors, of which 1.0% may be bought back for $1 million.

Jonathan's Pond Property

In September 2020, the Company acquired Jonathan's Pond property, comprising of 127 claims, through its acquisition of Exploits Gold Corp. of which $2,533,873 is allocated to the Jonathon's Pond property. In December 2020, the company acquired an additional comprising of 45 mineral claims (11.25 square kilometers) surrounding the core of its 100-per-cent-owned Jonathan's Pond (JP) gold project located in the Exploits subzone gold belt, Newfoundland and Labrador. As consideration the Company issued 6,562,799 common shares to New Found Gold and a 2% NSR.

Exploits Discovery/Crest Resources Staking Syndicate

On June 3, 2021, Exploits Discovery Corp. entered into a 50/50 staking syndicate agreement with Crest Resources Inc. whereby Crest provided the Geological Intellectual Property for the staking thesis, and Exploits funded the staking expenses of $412,815. The syndicate acquired through staking, 4 properties all within the Exploits subzone gold belt of Newfoundland. Under the staking syndicate agreement Exploits will receive the first 1.2 times cost return on investment and further benefit will be divided on a 50/50 per-cent basis.

Overall Performance

As a junior mining issuer, the Company is highly subject to the cycles of the mineral resource sector and the financial markets as they relate to junior companies. The Company's financial performance is dependent upon many external factors. Both prices and markets for metals are volatile, difficult to predict, and subject to changes in domestic and international, political, social and economic environments. Circumstances and events beyond its control could materially affect the financial performance of the Company.

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Summary of Quarterly Results

The following table summarizes financial data for the most recently completed quarters:

Quarter ended

Jul 31, 2021

Apr 30, 2021

Jan 31, 2021

Oct 31, 2020

Jul 30, 2020

Apr 30, 2020

Jan 31, 2020

Oct 31, 2019

Jul 30, 2019

Total Revenue

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Net loss ($)

(3,906,340)

(1,897,716)

(1,777,702)

(2,464,924)

(80,896)

(30,542)

(21,548)

(11,568)

(67,728))

Basic and diluted

net loss per

(0.12)

common share

(0.04)

(0.03)

(0.17)

(0.01)

(0.00)

(0.00)

(0.00)

(0.01)

The net loss for Q2 2021 increased significantly from the Q2 2020 results primarily due to the Company's overall increase in operations in connection with its Newfoundland projects.

  • Restated for the Company's changes in accounting policy - see "change in accounting policy" for more information

Results of Operations

Three months ended July 31, 2021

The Company incurred a net loss of $3,906,340 for the quarter ended July 31, 2021 ("Current Quarter") compared to a net loss of $91,849 for the three months ended July 31, 2020 ("Prior Quarter"), a difference of $3,814,491, primarily related to the Company's increased operations in connection with its Newfoundland projects and new management. Specific variances include:

  • Management fees of $154,500 increased by $143,500 (2020 - $11,000) and include management services rendered in connection with corporate activity and project evaluation;
  • Mineral and Property Evaluation expenses increased by $2,228,535 for the three months ended July 31, 2021, of $2,266,984 from $38,449 for the three months ended July 31, 2020. The increase is due to the Company's efforts to strategically expandits holdings in the Exploits Subzone in Newfoundland;
  • Investor relations expense increased by $196,575 for the three months ended July 31, 2021 of $209,729 from $13,154 for the three months ended July 31, 2020 due to a targeted market campaign aimed at increasing shareholder awareness in the Company as well as the Exploits Subzone of Newfoundland;
  • Professional fees of $13,701 (2020 - $11,065) include accounting and bookkeeping expenses;
  • Regulatory and filing fees of $15,543 (2020 - $8,355) were incurred for transfer agent fees and expenses related to maintaining the Company's listing on the CSE.
  • Share-basedcompensation of $1,390,257 was incurred in the three months ended July 31, 2021, for stock options granted in the period compared to an expense of $nil for the three months ended July 31, 2020.
  • Expenses were offset by the fair value adjustment on investments held of $32,475 for the three months ended July 31, 2021, as compared to $nil for the three months ended July 31, 2020.

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Disclaimer

Exploits Discovery Corp. published this content on 29 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 October 2021 07:33:02 UTC.