Kutcho Copper : Management Discussion & Analysis year ended April 30, 2022

MANAGEMENT DISCUSSION AND ANALYSIS

YEAR ENDED APRIL 30, 2022

The following discussion and analysis, prepared as of August 29, 2022, should be read together with the audited consolidated financial statements for the year ended April 30, 2022 and related notes attached thereto, which are prepared in accordance with International Financial Reporting Standards. All amounts are stated in Canadian dollars unless otherwise indicated.

Statements in this report that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties, which could cause actual results to vary considerably from these statements. Readers are cautioned not to put undue reliance on forward-looking statements. Additional information related to Kutcho Copper Corp. ("Kutcho Copper" or the "Company") is available for view on SEDAR at www.SEDAR.com.

Description of Business and Operations

Kutcho Copper was incorporated pursuant to the Business Corporations Act of British Columbia and its office is at Suite 717

• 1030 West Georgia Street, Vancouver, BC. On December 14, 2017, concurrent with the acquisition of the Kutcho project described below, the Company changed its name from Desert Star Resources Ltd. to Kutcho Copper Corp. The Company's shares are listed on the TSX Venture Exchange ("TSXV") and trade under the symbol "KC" and on the OTCQX under the symbol KCCFF. The Company is engaged in the acquisition and evaluation of mineral property interests, and this activity is dependent upon management's ability to continue to procure adequate financing to investigate new exploration opportunities. Kutcho Copper is not aware of any contingent liabilities, legal proceedings, defaults or breaches, other than disclosed herein. Regulatory consent has been obtained for all significant transactions where required. There are no material deviations between the intended use of proceeds announced in financings and the actual use of those funds.

Mineral properties

Kutcho Project

The Company entered into a definitive agreement dated June 15, 2017 with Capstone Mining Corp. ("Capstone") to acquire 100% of the Kutcho high grade copper-zinc-gold-silver project ("Kutcho project"). The transaction, which entailed the acquisition of Capstone's subsidiary company, Kutcho Copper Corp. ("KCC") which owned the Kutcho project, closed on December 14, 2017 (the "Acquisition"). Concurrent with the Acquisition, KCC amalgamated with Kutcho Copper Holdings Inc., a wholly owned subsidiary of the Company.

The Kutcho project is located in northern British Columbia, approximately 100 kilometres east of Dease Lake and Highway 37, and consists of one mining lease and 65 mineral exploration claims encompassing 24,233 hectares. Full details of the Kutcho project and acquisition are contained in the Company's various news releases and December 22, 2021 Feasibility Study Technical Report which can be viewed on SEDAR at www.SEDAR.com.

On July 6, 2021, the Company bought back a royalty held by Sumitomo Metal Mining Canada, and terminated their right of first refusal ("ROFR") to purchase concentrates from the Kutcho project. The total purchase price of the royalty buy-back and ROFR termination was US$3.2 million, that has been paid.

On February 15, 2022, the Company was advised by International Royalty Corporation, a successor to Royal Gold Inc. ("Royal Gold"), that it would not exercise the option to acquire the back-in interest in the Kutcho project held by it. Upon receipt of a feasibility study, Royal Gold had a 120 day period to provide the Company written notice of its intention to earn a 50% back- in interest in the claims. Royal Gold is entitled to a Net Smelter Return ("NSR") royalty of 2% on the respective portion of the Kutcho project sold to the Company.

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Finance

In December 2017, the Company entered into a Precious Metals Purchase Agreement ("PMPA") with Wheaton Precious Metals Corp. ("Wheaton"), under which Wheaton would pay the Company staged payments totaling US$65 million (the "Deposit") for 100% of the silver and gold production from Kutcho until certain quantities have been delivered, at which point the stream will decrease to 66.67% of the silver and gold production for the life of the mine (the "Stream Reduction"). The PMPA provided for an additional expansion payment of up to US$20 million to be payable by Wheaton in the event of future processing capacity increases (the "Expansion Payment"). The Company had received US$7 million on an early deposit basis to fund expenditures at Kutcho, as provided in the PMPA. The balance of the US$65 million was payable in installments during the construction of a mine.

In December 2017, the Company closed a loan agreement with Wheaton for gross proceeds of $20 million (the "Convertible Note"). The proceeds of the Convertible Note were used in full to pay the cash portion of the purchase price of the KCC acquisition. The Convertible Note was secured by all assets of the Company, was to mature after 7 years, and bore interest at the rate of 10% per annum, compounded and payable semi-annually. It contained an early repayment clause with penalties ranging from 15% to 25%, depending on the date of repayment. The Company and Wheaton entered into various amending agreements, resulting in an extended repayment date of December 31, 2023 and interest payments deferred beyond their original date bearing interest at a rate of 15% per annum.

In November 2019, the Company and Wheaton entered into an agreement whereby Wheaton has made a non-revolving credit facility available to the Company for up to $1,300,000 with a maturity date of December 31, 2020 (the "Credit Facility"). The Credit Facility bore interest at the rate of 15% per annum.

On February 18, 2022, the Company closed an amendment agreement (the "Amendment") with Wheaton in respect of the PMPA. At the date of closing, the Company was indebted to Wheaton in an amount of $38,434,089 under the Convertible Note and the Credit Facility, including principal and accrued interest. The Amendment provided for the settlement and termination of the Company's debt instruments (the Convertible Note and the Credit Facility), both as amended with Wheaton, as consideration for the issuance to Wheaton of US$7,500,000 of common shares of Kutcho (the "Common Shares"), the removal of the Stream Reduction and the removal of the Expansion Payment. The amount settled under the Convertible Note and Credit Facility, less the value of the Common Shares issued to Wheaton, comprised an additional Deposit of Wheaton under the PMPA, bringing the total Deposit to US$87,774,981. Wheaton remains obligated to pay the remaining initial Deposit of US$58 million, subject to the terms and conditions of the PMPA, and would also make continuing cash payments equal to 20% of the applicable spot price of silver and gold for each ounce delivered under the PMPA. On closing of the transaction, the Company issued to Wheaton 10,485,958 Common Shares at a price of $0.908 per Common Share. For further details regarding the Amendment, refer to the Company's news releases of February 11, 2022 and February 22, 2022 which can be viewed on SEDAR at www.SEDAR.com.

On June 15, 2021, the Company completed a non-brokered private placement for gross proceeds of $4,100,000. The private placement is comprised of 5,200,000 common shares priced at $0.50 per share and 2,500,000 flow-through shares priced at $0.60 per share for gross proceeds of $4,100,000.

On December 16, 2021, the Company closed a private placement comprising of 5,263,158 common shares at a price of $0.95 per common share, for gross proceeds of $5,000,000.

Operations

Over the past several years, the overall objective of the Company has been to complete a feasibility study on the Kutcho project and to advance the permitting of the project for development of a mining operation.

Kutcho undertook various field and technical programs during 2018-2021 which successfully provided for comprehensive datasets required to form the basis for the preparation of the feasibility study. On December 22, 2021, the Company filed a report titled "NI 43-101 Feasibility Study Technical Report for the Kutcho Copper Project, British Columbia, Canada" which can be viewed on SEDAR at www.SEDAR.com.

The Company is now proceeding with its plan to re-enter the Environmental Assessment process as the next step towards completion of permitting for mine development. In parallel, the Company is engaging in First Nation and community consultations with the view to completing economic participation agreements with both the Tahltan and Kaska First Nations.

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Mineral Property Expenditures

The Company expended the following on acquisition and exploration and development costs on its property during the years ended April 30, 2022 and 2021:

	April 30, 2022	April 30, 2021
Property acquisition costs
Balance, beginning	$	31,852,370	$	31,852,370
Royalty repurchase		4,103,049		-
Balance, ending		35,955,419		31,852,370
Exploration and evaluation costs
Balance, beginning		14,908,616		13,854,060
Corporate social responsibility		38,528		85,604
Environmental		1,879,388		75,553
Permitting		46,400		27,160
Geotechnical		2,027,390		32,128
Metallurgy		71,958		69,515
Engineering		2,840,337		651,700
Resource		161,361		58,210
General		59,095		46,353
Geology		14,204		8,333
Capitalized borrowing costs		1,139,017		-
Balance, ending		23,186,294		14,908,616
Total	$	59,141,713	$	46,760,986

Results of Operations

As the Company has no revenue producing properties, it continues to incur operating losses. The net losses for the years ended April 30, 2022 and 2021 are summarized below.

		2022	2021
Administration expenses	$	159,125	$136,500
Consulting fees		292,634	77,322
Depreciation		1,780	9,035
Directors' fees		77,375	12,844
Interest and accretion expense		3,113,875	3,454,059
Management fees		329,637	309,426
Marketing and promotion		568,404	473,564
Office and miscellaneous		96,896	73,503
Professional fees		151,717	32,313
Stock-based compensation		1,653,792	914,669
Transfer agent and filing fees		144,340	41,162
Loss (gain) on sale of marketable securities		7,095	(284,236)
Unrealized (gain) loss on marketable securities		50,779	(206,500)
Flow-through recovery		(473,849)	(9,216)
Change in fair value of investment		(63,639)	(163,888)
Foreign exchange (gain) loss		489,222	(1,135,359)
Gain on settlement of debenture and loan		(1,699,821)	-
Loss for the year	$	4,899,362	$ 3,735,198
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The increase in administration expenses, consulting fees, management fees and office and miscellaneous costs in the 2022 year compared with 2021 resulted from an increase in corporate activities due to the current phase of operation as the Company moved through the preparation and completion of the feasibility study. The gain on the settlement of debenture in 2022 is related to the settlement of the Wheaton Convertible Note described above. Interest and accretion expense relates to the Convertible Note and Credit Facility discussed above. The marketing and advertising costs were incurred to inform investors about the Kutcho project. The costs were being recognized over the periods of the various contacts. Stock based compensation represents the value of stock options granted to directors, officers and consultants which vested in the period. The Company realized a gain of $63,639 (2021: $163,888) on the change in value of investment in a private company. The foreign exchange amounts arose from the restating of US dollar-denominated cash, receivables and payables balances due to the fluctuation of the Canadian dollar.

The Company's losses for the three months ended April 30, 2022 and 2021 are summarized below. The primary reason for the fluctuations between comparative periods are similar to those for the years ended discussed above.

						2022		2021
Administration expenses					$	34,625	$	18,000
Consulting fees						132,661		15,000
Depreciation						-		594
Directors' fees						19,287		12,844
Interest and accretion expense						345,7374		849,890
Management fees						71,250		73,109
Marketing and promotion						205,093		332,151
Office and miscellaneous						24,888		18,554
Professional fees						52,819		13,463
Stock-based compensation						(38,224)		541,255
Transfer agent and filing fees						55,064		18,083
Gain on sale of investment and marketable securities				(23,993)	(259,236)
Unrealized loss on marketable securities					32,279		16,000
Flow-through recovery						-		(9,216)
Change in fair value of investment					(35,071)	(163,888)
Foreign exchange loss						273,236	(346,601)
Gain on settlement of debenture and loan				(1,699,821)		-
Income for the period					$	(550,170)	$ 1,130,002
Summary of Quarterly Results
	Three	Three	Three	Three	Three	Three	Three		Three
	Months	Months	Months	Months	Months	Months	Months		Months
	Ended	Ended	Ended	Ended	Ended	Ended	Ended		Ended
	30/04/22	31/01/22	31/10/21	31/07/21	30/04/21	31/01/21	31/10/20		31/07/20
	$	$	$	$	$	$	$		$
Total assets	61,793,930	60,3034,656	56,170,675	56,369,938	52,131,147	48,234,448	48,425,685		45,365,105
E&E and Development assets	59,141,713	56,930,726	53,139,022	50,875,879	46,760,986	46,235,905	45,993,623		45,829,185
Working capital surplus (deficiency)	1,318,861	(3,734,493)	(3,198,965)	(145,187)	724,027	(1,402,248)	2,218,384		(1,082,494)
Shareholders' equity	21,769,261	20,267,898	17,119,947	17,883,135	14,914,196	11,854,110	12,673,799		11,432,484
Revenues	-	-	-	-	-	-	-		-
Net income (loss)	550,170	(3,001,862)	(1,166,546)	(1,281,124)	(1,130,002)	(917,256)	(1,129,933)		(558,007)
Earnings (loss) per share	(0.07)	(0.03)	(0.01)	(0.01)	(0.01)	(0.01)	(0.02)		(0.01)

The net losses incurred in the quarters ended July 31, 2020 to April 30, 2022 include the interest and accretion expenses related to the term debt described above. The net income for the quarter ended April 30, 2022 included a gain on the settlement of a convertible debt.

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Selected Annual Information

	April 30, 2022	April 30, 2021	April 30, 2020
Total revenue	$	-	$	-	$	-
Total assets	$	61,793,930	$	52,131,147	$	46,317,887
Working capital surplus (deficiency)	$	1,318,861	$	724,027	$	(1,497,320)
Total non-current financial liabilities	$	39,387,173	$	33,086,348	$	32,511,859
Net loss	$	4,899,362	$	3,735,198	$	5,035,172
Net loss per share	$	0.05	$	0.05	$	0.07

Liquidity and Capital Resources

Kutcho Copper does not currently own or have an interest in any producing resource properties and has not yet derived any revenues from the sale of mineral property interests in the last three financial years. The Company's exploration activities have been funded through the issuance of common shares pursuant to private placements, the exercise of stock options and warrants and loan financing. The Company expects that it will continue to be able to utilize this source of financing until it develops cash flow from its operations. There can be no assurance, however, that the Company will be able to obtain required financing in the future on acceptable terms, or at all. As of April 30, 2022, the Company had a cash balance of $903,409 and working capital surplus of $1,318,861. The Company has not earned cash from operations in the past nor does it expect to in near future periods.

The Company continues to pursue and take advantage of financing opportunities. In June 2021, the Company completed a private placement for gross proceeds of $4,100,000. In December 2021, the Company completed a non-brokered private placement for gross proceeds of $5,000,000. The Company also received $1,358,921on the exercise of warrants and stock options during the year.

Although management believes that it has sufficient funds available to maintain its proposed project in the near term, it will require further funding to complete its program on the Kutcho project and continues its efforts to source equity and debt finance to fund its ongoing activities.

Investor Relations

The Company does not have any investor relations arrangements.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements which may affect the Company's current or future operations or conditions.

Outstanding Share Data

The authorized capital of the Company consists of an unlimited number of common shares. As of the date of this report, there were 124,547,197 common shares issued and outstanding.

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