Filo Mining : Quarterly Report

2021 YEAR END REPORT

Management's Discussion and Analysis

and

Consolidated Financial Statements

For the Twelve Months ended December 31, 2021

(AUDITED)

FILO MINING CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS

YEAR ENDED DECEMBER 31, 2021

(Amounts in Canadian Dollars unless otherwise indicated)

The following management's discussion and analysis ("MD&A") of Filo Mining Corp. ("Filo Mining" or the "Company") should be read in conjunction with the consolidated financial statements for the year ended December 31, 2021 and related notes therein. The financial information in this MD&A is reported in Canadian dollars unless otherwise indicated and is partly derived from the Company's consolidated financial statements prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. The effective date of this MD&A is March 22, 2022. Additional information about the Company and its business activities is available on SEDAR atwww.sedar.com and the Company's website www.filo-mining.com.

Some of the statements in this MD&A are forward-looking statements that are subject to risk factors set out in the cautionary note contained herein.

CORE BUSINESS

Filo Mining is a mineral exploration company, focused on its 100% controlled Filo del Sol project ("Filo del Sol" or the "Filo del Sol Project"), which is comprised of two adjacent land holdings: the Filo del Sol property located in San Juan Province, Argentina, and the Tamberias property, located in Region III, Chile. The Filo del Sol Project is located between the prolific Maricunga and El Indio gold belts, two major mineralized trends that contain such deposits as Caspiche, La Coipa, Veladero, and El Indio. The region is a stable mining jurisdiction and hosts a number of large-scale mining operations. The project area is covered under the Mining Integration and Complementation Treaty between Chile and Argentina, which provides the framework for the development of cross border mining projects.

The Company has completed a pre-feasibility study ("PFS") on the Filo del Sol Project, with an effective date of January 13, 2019, which demonstrated the project's robust economic potential. The PFS, which was based only on the oxide portion of the current Mineral Resource and used prices of US$3.00/lb copper, US$1,300/oz gold, and US$20/oz silver, yielded an after-tax net present value ("NPV") of US$1.28 billion at a discount rate of 8%, and generated an internal rate of return of 23%. Positive valuations were also maintained across a wide range of sensitivities on key assumptions.

The Company's most recent Mineral Resource and Mineral Reserve statement for the Filo del Sol Project is shown below.

Category	Tonnes (millions)	Cu (%)	Au (g/t)	Ag (g/t)	Lbs Cu (billions)	Oz Au (millions)	Oz Ag (millions)
Mineral Resource
Indicated	425.1	0.33	0.32	10.7	3.1	4.4	146.9
Inferred	175.1	0.27	0.33	6.2	1.1	1.8	34.8
Mineral Reserve
Proven	-	-	-	-	-	-	-
Probable	259.1	0.39	0.33	15.1	2.2	2.8	126.0

The Company's Mineral Resource estimate is inclusive of the Mineral Reserve estimate as set forth above.

The technical information relating to the PFS is based on a technical report titled "NI 43-101 Technical Report, Pre-feasibility Study for the Filo del Sol Project" dated February 22, 2019, with an effective date of January 13, 2019 (the "Technical Report"). The Technical Report was prepared for Filo Mining by Ausenco Engineering Canada Inc. and is available for review under the Company's profile on SEDAR atwww.sedar.com and on the Company's website atwww.filo-mining.com.

The Filo del Sol Project continues to hold significant exploration potential, and drilling completed subsequent to the PFS has intersected long intervals of copper, gold and silver mineralization well outside of the resource envelope. Wide-spaced drilling over the past two years has discovered a higher-grade section of the mineralized structure, now called the Aurora Zone, which contains at least one section with elevated grades. The higher grade section identified to date has been named Breccia 41, after its discovery hole FSDH041, which returned 163m at 5.43% copper equivalent ("CuEq") (2.31% Cu; 2.07g/t Au; 183.0g/t Ag) from a depth of 780m within a broader interval of 858m at 1.80% CuEq (0.86% Cu; 0.70g/t Au; 48.1g/t Ag) from a depth of 188m. Hole FSDH054, collared 60m east of FSDH041, was also drilled in Breccia 41 and returned 172m at 3.22% CuEq (1.51% Cu; 1.42g/t Au; 75.9g/t Ag) from a depth of 830m within a broader interval of 1,224m at 1.26% CuEq (0.71% Cu; 0.54g/t Au; 18.0g/t Ag) from a depth of 146m. This mineralization has been transformative for the Filo del Sol Project, and further exploration thereof will be a strategic focus for the Company moving forward.

The Company's strategy is to create value for its shareholders by expanding and increasing the quality of the resources and reserves at the Filo del Sol Project through further exploration, and by advancing engineering and other studies that are required to prepare the Filo del Sol Project for eventual development by the Company or by third parties.

The Company's common shares traded on the TSX Venture Exchange under the symbol "FIL" until September 30, 2021, at which point it was voluntarily delisted in order for the Company's common shares to trade on the Toronto Stock Exchange under the same symbol effective October 1, 2021.

The Company has a strong management team and board with extensive experience in the resource sector, particularly in Chile and Argentina. The board and management team have an appropriate mix of geological, engineering, financial, and business skills to advance the Company's projects and to generate value for its shareholders.

2021 OPERATING HIGHLIGHTS

Transformative 2020/2021 Program Discovers High-grade Breccia 41

The Company's 2020/2021 drill campaign at the Filo del Sol Project concluded in May 2021, with a total of 11,280m of drilling completed in 15 holes. The highlight of the program was the discovery of Breccia 41, which was intersected by hole FSDH041, returning 163m at 5.43% CuEq (2.31% Cu; 2.07g/t Au; 183.0g/t Ag) from 780m depth within a broader interval of 858m at 1.80% CuEq (0.86% Cu; 0.70g/t Au; 48.1g/t Ag) from 188m depth. Hole FSDH041 ended in mineralization at a depth of 1,046m, with the final 20m averaging 1.19% CuEq (0.65% Cu; 0.72g/t Au; 2.3g/t Ag).

Wide-spaced drilling over the past two years has discovered a higher-grade section of the deposit, the Aurora Zone, extending along a north-south length of at least 700m. Breccia 41 represents one section of elevated grades within this larger Aurora Zone. Both the Aurora Zone and Breccia 41 remain open along strike in both directions and their full depth extent and east-west lateral width also remain open.

Other highlights from the 2020/2021 drill program include:

•  Hole FSDH046, which returned the longest mineralized intersection at the project to date, confirming strong mineralization to over 1,400m below surface. The hole returned 676m at 0.92% CuEq (0.57% Cu; 0.34g/t Au; 11.3g/t Ag) from a depth of 380m within a broader interval of 1,378m at 0.71% CuEq (0.45% Cu; 0.29g/t Au; 6.1g/t Ag) from a depth of 78m;

•  Hole FSDH049 returned 425m at 1.55% CuEq (0.42% Cu; 0.44g/t Au; 91.5g/t Ag); included within the long intercept was the then highest-grade silver intersection on the project to date, with 4m at 5,045.0 g/t Ag from a depth of 236m contained within a broader silver interval of 56m at 629.1 g/t Ag from a depth of 228m; and

•  Hole FSDH051, which is the most northerly hole drilled into the deposit to date, returned 344m at 0.50%

  CuEq (0.26% Cu; 0.21g/t Au; 9.4g/t Ag) from 246m, extending the mineralized zone by 750m to the north.

  Overall, the 2020/2021 drill program successfully extended the known continuous mineralization of the deposit over a distance of approximately 4,500m north-south, 1,000m east-west and almost 1,500m deep.

Complete assay results for the 2020/2021 drill program are summarized in the table below:

Hole-ID	From (m)	To (m)	Length (m)	Cu (%)	Au (g/t)	Ag (g/t)	CuEq1 (%)
FSDH037	118.0	134.0	16.0	0.39	0.45	4.8	0.76
plus	208.0	240.0	32.0	0.25	0.21	0.6	0.40
plus	380.0	882.0	502.0	0.41	0.13	27.8	0.75
incl.	380.0	484.0	104.0	0.19	0.07	119.9	1.30
incl.	396.0	404.0	8.0	0.21	0.09	473.0	4.44
FSDH040	94.0	211.5	117.5	0.45	0.29	2.4	0.69
incl.	94.0	120.0	26.0	1.15	0.28	2.3	1.37
FSDH041	188.0	1,046.0	858.0	0.86	0.70	48.1	1.80
incl.	376.0	1,046.0	670.0	1.07	0.85	60.9	2.23
incl.	780.3	943.3	163.0	2.31	2.07	183.0	5.43
incl.	780.3	864.0	83.7	3.13	2.40	272.2	7.27
FSDH042	262.0	310.0	48.0	0.00	1.01	0.7
FSDH043	300.0	1,068.0	768.0	0.29	0.10	2.0	0.39
incl.	774.3	1,068.0	293.7	0.47	0.16	2.6	0.61
incl.	980.0	1,068.0	88.0	0.61	0.19	3.3	0.78
FSDH044	58.0	1,000.0	942.0	0.42	0.32	2.2	0.67
incl.	350.0	1,000.0	650.0	0.51	0.37	2.5	0.80
FSDH045	118.0	142.0	24.0	0.19	0.35	6.8	0.50
plus	268.0	286.0	18.0	0.22	0.93	5.3	0.94
FSDH046	77.7	1,456.0	1,378.3	0.45	0.29	6.1	0.71
incl.	302.0	1,456.0	1,154.0	0.50	0.32	7.1	0.80
incl.	380.0	1,056.0	676.0	0.57	0.34	11.3	0.92
FSDH047	86.0	493.5	407.5	0.29	0.16	2.1	0.43
incl.	324.0	493.5	169.5	0.39	0.20	2.9	0.57
FSDH048	38.0	1,118.5	1,080.5	0.52	0.43	5.3	0.88
incl.	498.0	850.0	352.0	0.63	0.64	6.7	1.16
FSDH049	0.0	30.0	30.0	0.01	1.38	1.9
plus	90.0	515.3	425.3	0.42	0.44	91.5	1.55
incl.	220.0	364.6	144.6	0.58	0.61	249.9	3.22
incl.	228.0	284.0	56.0	0.67	0.51	629.1
incl.	236.0	240.0	4.0	0.57	0.36	5,045.0
FSDH050	276.0	476.8	200.8	0.26	0.28	16.2	0.60
incl.	329.2	356.0	26.9	0.49	0.34	7.8	0.81
and incl.	424.0	476.8	52.8	0.36	0.40	48.8	1.08
FSDH051	246.0	590.0	344.0	0.26	0.21	9.4	0.50
incl.	280.0	316.0	36.0	0.16	0.91	50.5	1.26

376.0

530.0

154.0

0.41

0.14

5.0

0.56

1 CuEq for drill intersections is calculated based on US$3.00/lb Cu, US$1,500/oz Au and US$18/oz Ag, with 80% metallurgical recoveries assumed for all metals. The formula is: CuEq % = Cu % + (0.7292

* Au g/t) + (0.0088 * Ag g/t).

Exploration Success Continues with Ambitious 2021/2022 Drill Program

Following camp winterization and maintenance efforts undertaken from June through to early August 2021, the Company commenced its 2021/2022 drill campaign at Filo del Sol in late August 2021, marking the earliest launch to a drill campaign in the project's history. The program commenced with three rigs, and ramped up to five rigs prior to the end of the year, with the first holes focused around the Breccia 41 area.

Assay results received to date from the ongoing drill program continue to showcase the potential for world-class size and grades at Filo del Sol. Hole FSDH055A returned the best precious metal intersections on the project to date, with 64m at 1,213.8g/t Ag and 0.49g/t Au from a depth of 362m. In addition, hole FSDH054 was collared 60m east of, and drilled parallel to, FSDH041 and intersected 172m at 3.22% CuEq (1.51% Cu; 1.42g/t Au; 75.9g/t Ag) from 830m depth within a broader interval of 1,224m at 1.26% CuEq (0.71% Cu; 0.54g/t Au; 18.0g/t Ag) from a depth of 146m. The mineralization intersected by FSDH054 is completely outside of the current Mineral Resource, successfully extended Breccia 41, and remains open to the west, east, north and at depth.

Assay results to date from the 2021/2022 drill program are summarized in the table below:

Hole-ID	From (m)	To (m)	Length (m)	Cu (%)	Au (g/t)	Ag (g/t)	CuEq1 (%)
FSDH054	146.0	1,369.5	1,223.5	0.71	0.54	18.0	1.26
plus	435.9	442.0	6.1	0.59	0.24	127.5	1.89
plus	498.0	1,090.0	592.0	1.15	0.84	31.9	2.04
incl.	830.0	1,001.5	171.5	1.51	1.42	75.9	3.22
FSDH055A	362.0	426.0	64.0	0.01	0.49	1,213.8
incl.	374.4	402.0	27.6	0.01	0.50	2,439.2
incl.	380.0	388.0	8.0	0.01	0.45	5,280.0

1 CuEq for drill intersections is calculated based on US$3.00/lb Cu, US$1,500/oz Au and US$18/oz Ag, with 80% metallurgical recoveries assumed for all metals. The formula is: CuEq % = Cu % + (0.7292

* Au g/t) + (0.0088 * Ag g/t).

CORPORATE UPDATE

$100 Million Strategic Investment by BHP

On March 11, 2022, the Company closed a non-brokered private placement of 6,270,000 common shares to BHP Western Mining Resources International Pty Ltd, a wholly owned subsidiary of BHP Group Limited (collectively, "BHP"), at a price of $15.95 per common share for total gross proceeds of $100 million (the "Private Placement"). No finder's fee or commissions were payable in connection with the Private Placement.

Upon closing of the Private Placement, BHP owned approximately 5% of the Company's issued and outstanding common shares on an undiluted basis. The common shares acquired by BHP pursuant to the Private Placement are subject to a statutory four-month hold period in accordance with applicable securities regulations.