The following discussion and analysis should be read in conjunction with our consolidated financial statements for the two years ended December 31, 2022, and 2021, and the related notes thereto, which have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth under the section heading "Item 1A. Risk Factors" above and elsewhere in this Annual Report on Form 10-K. See section heading "Cautionary Note Regarding Forward-Looking Statements" above.





Results of Operations

Twelve Months Ended December 31, 2022 Compared to December 31, 2021





                                                    Twelve Months Ended
                                                12/31/22          12/31/21
Operating expenses
General and administrative                    $   5,087,128     $   4,664,565
Lease expense                                        21,000            16,000
Exploration, evaluation and project expense       5,739,534         7,909,333
Accretion expense                                    77,941            24,749
Depreciation expense                                 44,057            44,057
Total operating expenses                         10,969,660        12,658,704

Net operating loss                              (10,969,660 )     (12,658,704 )

Revaluation of warrant liability                 (7,852,349 )      15,857,500
Interest expense                                   (721,924 )               0
Foreign currency exchange gain (loss)              (176,279 )         253,236
Net income (loss)                             $ (19,720,212 )   $   3,452,032




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For the twelve months ending December 31, 2022, the Company increased general and administrative expenses by approximately $422,000. The increase was due to the following year over year variances:





Twelve months ending                12/31/2022      12/31/2021       Variance
Accounting fees                     $   309,000     $   257,000     $   52,000
Legal and other professional fees     1,397,000         500,000        897,000
Marketing expense                        50,000          87,000        (37,000 )
Payroll                                 677,000       1,548,000       (871,000 )
Corporate expenses & rent               176,000         273,000        (97,000 )
Share based compensation              2,164,000       1,560,000        604,000
Insurance                               162,000         121,000         41,000
Stock exchange fees                     132,000         239,000       (107,000 )
Other general expenses                   20,000          80,000        (60,000 )
Total                               $ 5,087,000     $ 4,665,000     $  422,000

? Accounting fees increase resulted from higher costs for review procedures along

with additional consulting fees needed for required regulatory filings and tax

compliance. Management believes these increased costs will continue in future

fiscal periods.

? Legal fees and professional fees increased due to a legal agreement that was

finalized in June 2022 along with professional consulting fees and an increase

in franchise tax fees and other expenses. Management does believe that legal

costs will be higher than prior periods moving forward due to the Company's

increased compliance costs and the implementation of regulatory changes in

relation to property disclosure requirements in our filings with the SEC.

? Marketing expense was lower as 2021 had additional amounts that were used for

company and shareholder awareness projects.

? The majority of payroll and corporate expenses was from the Company's agreement

to share office space, equipment, personnel, consultants and various

administrative services for the Company's head office located in Vancouver, BC

Canada. Management expects payroll costs to increase in 2023 due to increased

personnel and consultants added in the prior six months that will be retained

moving forward.

? The Company granted options to officers, directors and employees of the Company

pursuant to the terms of the Company's Stock Option Plan; 4,041,667 in the

first quarter 2021 (adjusted for 1,783,333 canceled options); 500,000 in the

third quarter 2021; 350,000 in the second quarter 2022; and 100,000 in the

third quarter 2022.

? Stock exchange fee variance is a result of the initial listing fee paid to the

TSX in April 2021. Annual exchange fees will continue.

For the twelve months ending December 31, 2022, there was a variance $2,169,000 for the same period in 2021 in exploration and evaluation expenses. The increase was due to the following year over year variances:

Twelve months ending 12/31/2022 12/31/2021 Variance Drilling

$ 1,572,000     $ 3,992,000     $ (2,420,000 )
Consultants/Contractors     2,607,000       1,670,000          937,000
Supplies and equipment        382,000         743,000         (361,000 )
Assay                          84,000         543,000         (459,000 )
Water haulage                       0         389,000         (389,000 )
Overhead and payroll          778,000         298,000          480,000
Permits and fees              291,000         268,000           23,000
Other                          26,000           6,000           20,000
Total                     $ 5,740,000     $ 7,909,000     $ (2,169,000 )

In the fourth quarter of 2022, the Company continued with test work on metallurgical drill core samples from the Bullfrog deposit. Preparation of a technical report for the Reward project continued.





                                       34

The revaluation of the warrant liability is based on the following warrants issued:





Issue Date     Expiration Date    Warrants Issued      Exercise Price
October 2020    October 2024          18,333,333                C$1.80
March 2021       March 2024           3,777,784                 C$2.80

Liquidity and Capital Resources

The Company has no revenue generating operations from which it can internally generate funds. To date, the Company's ongoing operations have been financed by the sale of its equity securities by way of public offerings, private placements and the exercise of incentive stock options and share purchase warrants. The Company believes that it will be able to secure additional private placements and public financings in the future, although it cannot predict the size or pricing of any such financings. This situation is unlikely to change until such time as the Company can develop a bankable feasibility study on one of its projects.

On March 4, 2021, the Company issued 7,555,556 units pursuant to a private placement at a price of C$2.25 per unit for gross proceeds of C$17 million, each unit comprised of one share of common stock of the Company and one half of one common stock purchase warrant. Each whole warrant entitles the holder to acquire one share of common stock at an exercise price of C$2.80 per share for a period of three years from the date of issuance. Finders' fees of C$450,000 were paid in connection with the private placement.

On January 20, 2023, the Company announced that it had closed a bought deal offering of units of Augusta Gold (the "Units") for aggregate gross proceeds of approximately C$11.5 million, including the full exercise of the over-allotment option in the amount of C$1.5 million. Pursuant to the Offering, a total of 6,725,147 Units were sold at a price of C$1.71 per Unit. Each Unit was comprised of one share of the Company's common stock and one-half of one common stock purchase warrant (each whole common stock purchase warrant, a "Warrant"). Each Warrant entitles the holder to acquire one share of the Company's common stock at a price of C$2.30 until January 20, 2026.





Liquidity

As of December 31, 2022, the Company had total liquidity of $333,000 in cash and cash equivalents. The Company had negative working capital of $26,141,000 and an accumulated deficit of $39,894,000. For the twelve months ended December 31, 2022, the Company had negative operating cash flows before changes in working capital of $9,582,000 and a net loss of $19,720,000.

As of December 31, 2021, the Company had total liquidity of $19,582,000 in cash and cash equivalents. The Company had working capital of $18,530,000 and an accumulated deficit of $20,174,000. For the twelve months ended December 31, 2021, the Company had negative operating cash flows before changes in working capital of $10,776,000 and a net income of $3,452,000.

The Company expects that it will operate at a loss for the foreseeable future and believes the current cash and cash equivalents and working capital will be sufficient for it to maintain its currently held properties, fund its planned exploration, and fund its currently anticipated general and administrative costs for at least the next 12 months from the date of this report. However, the Company does expect that it will be required to raise additional funds through public or private equity financings in the future in order to continue in business in the future past the immediate 12-month period. Should such financing not be available in that time-frame, the Company will be required to reduce its activities and will not be able to carry out all of its presently planned exploration and, if warranted, development activities on its currently anticipated scheduling.





Capital Management

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to pursue the development and exploration of its mineral properties and to maintain a flexible capital structure, which optimizes the costs of capital to an acceptable risk.

As of December 31, 2022, the capital structure of the Company consists of 79,204,606 shares of common stock, par value $0.0001. The Company manages the capital structure and adjusts it in response to changes in economic conditions, its expected funding requirements, and risk characteristics of the underlying assets. The Company's funding requirements are based on cash forecasts. In order to maintain or adjust the capital structure, the Company may issue new debt, new shares and/or consider strategic alliances. Management reviews its capital management approach on a regular basis. The Company is not subject to any externally imposed capital requirements.





                                       35

Contractual obligations and commitments

The Company's contractual obligations and commitments as of December 31, 2022, and their approximate timing of payment are as follows:

<1 year       1 - 3 years       4 - 5 years      >5 years        Total
Leases                $ 116,557     $     150,594     $      50,000     $ 650,000     $ 967,151
Capital Expenditure      30,000                 -                 -             -        30,000
                      $ 146,557     $     150,594     $      50,000     $ 650,000     $ 997,151

Off Balance Sheet Arrangements

We do not engage in any activities involving variable interest entities or off-balance sheet arrangements.

Critical Accounting Policies and Use of Estimates

Stock based compensation is measured at grant date, based on the fair value of the award, and is recognized as an expense over the employee's requisite service period. We estimate the fair value of each stock option as of the date of grant using the Black-Scholes pricing model. The Company determines the expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and post-vesting forfeitures. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future.

Mineral property exploration costs are expensed as incurred until such time as economic reserves are quantified. To date, the Company has not established any proven or probable reserves on its mineral properties. Costs of lease, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. The Company has chosen to expense all mineral exploration costs as incurred given that it is still in the exploration stage. Once the Company has identified proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs will be amortized over the estimated life of the probable-proven reserves. When the Company has capitalized mineral properties, these properties will be periodically assessed for impairment of value and any diminution in value. To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all exploration costs are being expensed. Costs of property acquisitions are being capitalized, and a required payment of $20,000 was made in 2018 to Mojave Gold Mining Corporation ("Mojave") as part of the Option to Purchase Agreement ("Option").

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