International Battery Metals : Management Discussion and Analysis

INTERNATIONAL BATTERY METALS LTD.

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the three and nine months ended October 31, 2021

Dated December 22, 2021

INTERNATIONAL BATTERY METALS LTD.

MANAGEMENT'S DISCUSSION AND ANALYSIS

Introduction

The preparation and presentation of the accompanying condensed consolidated interim financial statements, Management Discussion and Analysis ("MD&A") and all financial information in the Quarterly Report are the responsibility of management and have been approved by the Board of Directors.

The condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") applicable to the preparation of interim financial statements, including International Accounting Standards ("IAS") 34, Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB"). Financial statements, by nature, are not precise since they include certain amounts based upon estimates and judgements. When alternative methods exist, management has chosen those it deems to be the most appropriate in the circumstances.

Management, under the supervision of and the participation of the Chief Executive Office and Chief Financial Officer, have a process in place to evaluate disclosure controls and procedures and internal control over financial reporting as required by Canadian securities regulations. We, as Chief Executive Officer and Chief Financial Officer, will certify our annual filings with the CSA as required in Canada by National Instrument 52-109.

The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving the condensed consolidated interim financial statements. The Board carries out this responsibility principally through its Audit Committee which is independent from management.

The Audit Committee is appointed by the Board of Directors and reviews the condensed consolidated interim financial statements and MD&A; considers the report of the external auditors; examines the fees and expense for audit services; and recommends to the Board the independent auditors for appointment by the shareholders. The independent auditors have full and free access to the Audit Committee and meet with the Audit Committee to discuss their audit work, the Company's internal control over financial reporting and financial reporting matters. The Audit Committee reports its findings to the Board for consideration when approving the condensed consolidated interim financial statements for issuance to the shareholders.

This Management's Discussion and Analysis ("MD&A") of the financial position and results of operations of International Battery Metals Ltd., (the "Company" or "IBAT") should be read in conjunction with the annual audited consolidated financial statements of the Company for the year ended January 31, 2021, the condensed consolidated interim financial statements for the three and nine months ended October 31, 2021, and the related notes contained therein. All dollar figures included therein and in the following MD&A are quoted in Canadian dollars unless indicated otherwise. Additional information relevant to the Company and its activities can be found on SEDAR at www.sedar.com.

This MD&A is current as of December 22, 2021.

International Battery Metals Ltd. MD&A for the three and nine months ended October 31, 2021.

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Forward Looking Statements and Forward-Looking Information

The information provided in this MD&A may contain forward-looking statements and forward-looking information about IBAT within the meaning of applicable securities laws. In addition, IBAT may make or approve certain statements or information in future filings with Canadian securities regulatory authorities, in news releases, or in oral or written presentations by representatives of IBAT that are not statements of historical fact and may also constitute forward-looking statements or forward-looking information. All statements and information, other than statements of historical fact, made by IBAT that address activities, events, or developments that IBAT expect or anticipate will or may occur in the future are forward-looking statements and information, including, but not limited to, statements and information preceded by, followed by, or that include words such as "may", "would", "could", "will", "likely", "expect", "anticipate", "believe", "intends", "plan", "forecast", "budget", "schedule", "project", "estimate", "outlook", or the negative of those words or other similar or comparable words.

Forward-looking statements and information involve significant risks, assumptions, uncertainties and other factors that may cause actual future performance, achievement or other realities to differ materially from those expressed or implied in any forward-looking statements or information and, accordingly, should not be read as guarantees of future performance, achievement or realities.

Actual performance, achievement or other realities could differ materially from those expressed in, or implied by, any forward-looking statements or information in this MD&A and, accordingly, investors should not place undue reliance on any such forward-looking statements or information. Further, any forward-looking statement or information speaks only as of the date on which such statement is made, and IBAT does not undertake any obligation to update any forward-looking statements or information to reflect information, events, results, circumstances, realities or otherwise after the date on which such statement is made or to reflect the occurrence of unanticipated events, except as required by law, including securities laws. All forward-looking statements and information contained in this MD&A and other documents of IBAT are qualified by such cautionary statements. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of each such factor on IBAT's business or the extent to which any factor, or combination of factors, may cause actual realities to differ materially from those contained in any forward-looking statements.

In addition, forward-looking statements and information herein, including financial information, is based on certain assumptions relating to the business and operations of IBAT. Although IBAT has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements and forward-looking information in this MD&A, and the documents incorporated by reference herein, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There is no assurance that such statements and information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information contained in this MD&A.

International Battery Metals Ltd. MD&A for the three and nine months ended October 31, 2021.

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The Company

International Battery Metals Ltd. is an advanced technology company that is developing technologies for the extraction and processing of lithium from various sources. The objective of management is to maximize shareholder value by developing lithium extraction technologies as well as lithium resource properties and attempting to produce lithium in a cost-effective and ecologically sound manner. The Company's head office is located at Suite 1140, 625 Howe Street Vancouver BC V6C 2T6 and the Company's registered office is located at Suite 704, 595 Howe Street, Vancouver BC, V6C 2T5.

The Company was incorporated under the Business Corporations Act (British Columbia) on July 29, 2010. The fiscal year end of the Company is January 31. The Company changed its name from Rheingold Exploration Corp. to International Battery Metals Ltd. on August 23, 2017.

On February 25, 2015, the Company voluntarily delisted its common shares from the TSX Venture Exchange and commenced trading on the Canadian Securities Exchange under the symbol "RGE".

On August 23, 2017, the Company changed its name to International Battery Metals Ltd. and commenced trading on the Canadian Securities Exchange under the symbol "IBAT".

On April 12, 2018, the Company closed an asset purchase agreement with North American Lithium Inc. ("NAL") and Selective Adsorption Lithium ("SAL") a company controlled by shareholders of NAL pursuant to which the Company acquired NAL's data, analysis and reports related to lithium extraction from oil field brines for petro-lithium extraction projects.

On June 11, 2018, the Company filed for patent protection at the U.S. Patent and Trademark Office (USPTO) for a novel process to produce high purity lithium products that do not rely on electrolysis. This patent application, along with previous applications will protect directly IBAT's extraction and production process in the United States as the Company also prepares to file the application internationally. On December 20, 2021, the Company announced that it has received a notice of allowance for its mobile lithium extraction patent application from the United States Patent Office.

On August 20, 2018, the Company retained IMPACT Technology Development ("IMPACT") to help facilitate the engineering, design, and construction of its first proprietary mobile lithium extraction unit. By November 6, 2018, IMPACT had completed its Phase 2 of engineering study, design, and cost analysis, and on December 5, 2018, a successful live demonstration of the Company's lithium extraction technology was performed.

On November 8, 2018, the Company entered into a licensing agreement (the "Licensing Agreement") with Ensorcia Metals Corporation ("Ensorcia") and its wholly-owned subsidiary, Sorcia Minerals LLC ("Sorcia"), whereby the Company will license its novel lithium extraction technology to Sorcia for use in extracting Lithium Carbonate from lithium bearing brine sources in the country of Chile.

On November 20, 2018, the Company entered into a second licensing agreement with Ensorcia and its wholly-owned subsidiary, Ensorcia Argentina LLC ("EAL"), whereby the Company will license its lithium extraction technology to EAL for use in the extraction of lithium chloride from lithium bearing brine sources in the country of Argentina.

During the nine months ended October 31, 2021, the Company was actively working to finalize the engineering, sourcing equipment, and building the initial mobile lithium extraction unit. The unit is nearing completion and preliminary testing in the United States will commence early 2022 prior to its deployment

International Battery Metals Ltd. MD&A for the three and nine months ended October 31, 2021.

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to South America. The Company continues to be engaged in patent applications for its lithium extraction intellectual property and has received a notice of allowance for one of the key applications. The Company expects the patent to be issued in 2022.

Overall Performance

The key factors pertaining to the Company's overall performance for the nine months ended October 31,

2021 are as follows:

The Company had a working capital deficit of $6,329,369 as at October 31, 2021, as compared to a working capital deficit of $4,504,681 as at January 31, 2021. This increase in working capital deficit is due to an increase in the trade payables and other liabilities balance from $589,619 to $2,861,344 which is partially offset by a decrease in the balance of the derivative liability from $4,239,699 to $3,623,146 which resulted from the derecognition upon warrants exercised during the nine months ended October 31, 2021 partially offset by the change in fair value of the outstanding warrants as of October 31, 2021.

The Company had a comprehensive loss of $1,471,828 for the nine months ended October 31, 2021, as compared to comprehensive loss of $1,436,138 for the nine months ended October 31, 2020. The primary reason for the decrease in comprehensive loss was due to a gain on derecognition of derivative liability of $3,962,612 for the nine months ended October 31, 2021 compared to $nil for the nine months ended October 31, 2020 which is partially offset by a loss on the change in fair value of derivative liability of $3,346,059 for the nine months ended October 31, 2021 compared to a gain on the change in fair value of derivative liability of $406,337 for the nine months ended October 31, 2020.

The Company has negative cash flow from operations and its level of operations has been determined by the availability of capital resources. Cash used in operating activities for the nine months ended October 31, 2021 was $369,735 compared to cash provided by operating activities for nine months ended October 31, 2020 of $1,156,625.

Going Concern

As at October 31, 2021, the Company had net working capital deficit of $6,329,369. The accompanying financial statements do not reflect adjustments that would be necessary if the going concern assumption was not appropriate. If the going concern assumption was not appropriate for the accompanying financial statements, adjustments would be necessary to the statement of financial position classifications used. Such adjustments could be material. There is no assurance that the Company will identify an appropriate business for acquisition or investment, and even if so identified and warranted, it may not be able to finance such an acquisition or investment within the requisite time period. Additional funds will be required to enable the Company to pursue such an initiative, and the Company may be unable to obtain such financing on terms which are satisfactory to it. Furthermore, there is no assurance that the business will be profitable. These factors indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. Should the Company be unable to complete these plans to obtain additional financing and be unable to continue as a going concern, the Company may be forced to cease operations.

Since March 2020, several measures have been implemented in Canada and the rest of the world in response to the increased impact from novel coronavirus ("COVID-19"). The Company continues to operate its business at this time. While the impact of COVID-19 is expected to be temporary, the current circumstances are dynamic and the impacts of COVID-19 on business operations, cannot be reasonably estimated at this time. The Company anticipates this could have an adverse impact on its operations.

International Battery Metals Ltd. MD&A for the three and nine months ended October 31, 2021.

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