Nevada Zinc : MDA FY 2022

NEVADA ZINC CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2022

MAY 1, 2023

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

Introduction

The following management's discussion and analysis ("MD&A") of the financial condition and results of the operations of Nevada Zinc Corporation ("Nevada Zinc", or the "Company") constitutes management's review of the factors that affected the Company's financial and operating performance for the year ended December 31, 2022. This MD&A was written to comply with the requirements of National Instrument 51- 102 - Continuous Disclosure Obligations. This discussion should be read in conjunction with the audited consolidated financial statements of the Company for the fiscal years ended December 31, 2022, and 2021, together with the notes thereto. Results are reported in Canadian dollars, unless otherwise noted. The Company's audited consolidated financial statements and the financial information contained in this MD&A are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the IFRS Interpretations Committee ("IFRIC"). In the opinion of management, all adjustments (which consist only of normal recurring adjustments) considered necessary for a fair presentation have been included. Information contained herein is presented as at May 1, 2023, unless otherwise indicated.

For the purposes of preparing this MD&A, management, in conjunction with the Board of Directors (the "Board"), considers the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of Nevada Zinc's common shares; (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) it would significantly alter the total mix of information available to investors. Management, in conjunction with the Board, evaluates materiality with reference to all relevant circumstances, including potential market sensitivity.

Further information about the Company and its operations can be obtained from the offices of the Company or on SEDAR at www.sedar.com.

Cautionary Note Regarding Forward-Looking Statements

This MD&A contains certain forward-looking information and forward-looking statements, as defined in applicable securities laws (collectively referred to herein as "forward-looking statements"). These statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "continues", "forecasts", "projects", "predicts", "intends", "anticipates" or "believes", or variations of, or the negatives of, such words and phrases, or state that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in such forward-looking statements. The forward-looking statements in this MD&A speak only as of the date of this MD&A or as of the date specified in such statement. The following table outlines certain significant forward-looking statements contained in this MD&A and provides the material assumptions used to develop such forward-looking statements and material risk factors that could cause actual results to differ materially from the forward looking statements.

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Forward-looking

Assumptions

Risk factors

statements

Nevada

Zinc's

Lone

Financing will be available for future

Availability

of

financing

for

Mountain

property

may

development

and

exploration

of

Nevada Zinc's development and

contain economic deposits

Nevada Zinc's Lone Mountain

exploration

activities;

zinc

oxide

of zinc and other base

deposit; the actual results of

and zinc chemicals off-take price

metals and the

Company

Nevada Zinc's development studies

volatility;

market

penetration;

may

economically produce

will be favourable; the deposit's

increases in costs; environmental

zinc

sulfate

from

the

mineralized material will be suitable

compliance

and

changes

in

deposit.

for making zinc chemicals including

environmental

and

other

local

zinc

oxide,

operating,

and

legislation

and

regulation;

development costs will not exceed

changes in economic

conditions;

Nevada Zinc's expectations; the

the Company's ability to retain

Company will be able to retain and

and attract skilled staff.

attract skilled staff; all requisite

regulatory

and

governmental

approvals will be received on a

timely basis upon terms acceptable

to Nevada Zinc,

and

economic

conditions are favourable to Nevada

Zinc; the off-take price for zinc

based micronutrient products

and

zinc oxide will be favourable to

Nevada Zinc; no title disputes exist

or will exist with respect to the

Company's properties.

The Company will be able

The

development

and

operating

Timing and availability of external

to

carry

out

anticipated

activities of the Company for the

financing

on

acceptable

terms;

business

plans,

including

twelve month period ending April

zinc

chemical

price

volatility,

the funding of development

30, 2024, and the funding of the

changes in equity markets; the

studies

and

exploration

costs associated therewith will be

uncertainties

involved

in

costs on its Lone Mountain

funded from the Company's equity

interpreting

geological

data

and

property.

raises; the Company will be able to

confirming

title

to

acquired

retain and attract skilled staff; all

properties;

increases

in

costs;

applicable

regulatory

and

environmental

compliance

and

governmental

approvals

for

changes

in

environmental

and

exploration

and

development

other

local

legislation

and

projects and other operations will be

regulation;

changes

in

economic

received on a timely basis upon

conditions; the Company may be

terms acceptable to Nevada Zinc;

unable to retain and attract skilled

the Company

will not be adversely

staff; receipt of applicable permits.

affected by market competition; the

price of zinc chemicals and zinc

oxide will be favourable to Nevada

Zinc; no title disputes exist with

respect to Nevada Zinc's Lone

Mountain property.

Inherent in forward-looking statements are risks, uncertainties and other factors beyond Nevada Zinc's ability to predict or control. Please also make reference to those risk factors referenced in the "Risks and Uncertainties" section below. Readers are cautioned that the above chart does not contain an exhaustive

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list of the factors or assumptions that may affect the forward-looking statements, and that the assumptions underlying such statements may prove to be incorrect. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this MD&A.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Nevada Zinc's actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. All forward-looking statements herein are qualified by this cautionary statement. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements whether as a result of new information or future events or otherwise, except as may be required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements, unless required by law.

Description of Business

Nevada Zinc is a Canadian-based resource company focused on the exploration and development of its high-grade zinc carbonate-oxide deposit located near Eureka, Nevada. The Company has a 100% ownership interest in the Lone Mountain zinc property comprised of a lease agreement (the "Lease Agreement") assigned to the Company on June 16, 2014. The Lease Agreement applies to 176 claims in Eureka County, Nevada. Under the terms of the Lease Agreement, Nevada Zinc has the right to continually lease the property for an initial 20 year term, subject to lease extensions at the end of the initial lease term and the end of subsequent lease extensions at the option of the Company. On September 30, 2015, the Company announced the purchase of the historic Mountain View Mine property that was, to that point, completely surrounded by other claims held by the Company. The Mountain View Mine property is comprised of a single patented mineral claim where historic mining operations took place more than 50 years ago. As a result of the transactions described above, plus additional staking of 26 unpatented mining claims, the Company now controls 202 claims with the Lone Mountain property now aggregating to more than 4,000 acres in one of the world's top ranked mining jurisdictions. Nevada Zinc released its initial inferred resource in July 2018, and in June 2019, the Company announced positive preliminary economic assessment results for the production of zinc concentrate from its Lone Mountain zinc deposit.

Nevada Zinc is now actively assessing the potential to economically produce zinc chemicals for the US agricultural industry as well as zinc oxide for use by zinc smelters in the production of zinc metal from its Lone Mountain high-grade zinc carbonate-oxide deposit. This potentially represents to the Company a superior economic alternative to producing and selling zinc concentrate for the production of zinc metal. In March 2021, Nevada Zinc announced the engagement of Hazen Research, Inc. ("Hazen"), Golden, Colorado, to conduct a multiphase pilot program to determine if the Company can economically produce zinc sulfate monohydrate, a micronutrient zinc-based fertilizer and animal feed from its Lone Mountain high-grade zinc carbonate-oxide deposit. The program's scope is to develop a process flowsheet using representative bulk sample material from the Lone Mountain zinc project site to produce commercial grade zinc sulfate monohydrate product samples, and to provide process plant capital and operating cost estimates. In September 2021, the Company announced that Hazen had successfully produced bench scale high-grade zinc sulfate monohydrate from the Company's Lone Mountain zinc carbonate-oxide deposit. This was one of the key objectives of the Hazen pilot program. In February 2022, the Company closed a private placement in the amount of $750,000 with a portion of the proceeds allocated to funding the completion of the Hazen pilot program. In April 2022, Hazen had acquired the equipment necessary to commence a bulk operation designed to produce approximately 50 lbs. of commercial grade high-purity zinc sulfate monohydrate followed by the cost analysis of the process flowsheet's capital and operating costs. On March 29, 2023 the Company announced that its pilot plant project had successfully produced high-grade zinc sulfate monohydrate. In early April, in order to reduce the sulphuric acid consumption in the zinc sulfate pilot plant production process the Company provided 10 kilograms of crushed sample material used in the pilot plant work for a bench scale test to determine if zinc oxide could be produced

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with a process requiring significantly less sulphuric acid as well as removing the need for solvent extraction in the production process which also requires sulphuric acid and othe reagents. The results of the bench scale test were successful and the Company is now focussed on determing if the same bech scale results can be obtained by processing 50 kilograms of uncrushed, unbeneficated ore from the Company's Lone Mountain deposit. The results of this work are projected to be available before the end of May. Zinc oxide can be converted to zinc sulfate fairly inexpensively and represents a commodity that can be sold into its own markets. Management believes that the ability to produce zinc sulfate from zinc oxide represents the potential to materially improve upon the economics to-date from the pilot plant work by simplifying the production process and significantly reducing sulphuic acid consumption and reagent inputs through the elimination of the need to employ solvent extraction in the production process. Being in a position to produce both zinc oxide and then to convert the zinc oxide to zinc sulfate would broaden the markets into which the Company could potentially sell its finished products as well as reduce economic dependency on one market segment. Prices for zinc oxide use by smelters tend to be correlated to the LME zinc price while the price of zinc sulfate is correlated to supply and demand levels in the US agricultural markets. Decisions to produce either zinc oxide of zinc sulfate from the same production facility will be largely governed by the underlying prices of the two commodities from time to time.

Overall Performance

The Company had consolidated exploration and acquisition costs of $377,151 and an operating loss of $908,417 for the year ended December 31, 2022, compared to exploration and acquisition costs of $353,280 and an operating loss of $962,106 for the year ended December 31, 2021. On a consolidated basis, the Company had total assets of $103,644 (the Company expenses all of its exploration and acquisition costs), total liabilities of $439,654 and a total shareholders' deficiency of $336,010 as at December 31, 2022, compared to total assets of $58,232, total liabilities of $842,754 and a total shareholders' deficiency of $784,522 as at December 31, 2021.

As at December 31, 2022, the Company had current assets of $82,271 compared to current assets of $36,859 as at December 31, 2021, and current liabilities of $439,654 as at December 31, 2022, compared to current liabilities of $842,754 as at December 31, 2021, resulting in a working capital deficit of $357,383 as at December 31, 2022, compared to a working capital deficit of $805,895 as at December 31, 2021.

Based upon the results of the second set of zinc oxide testing on the Company's 50 kilogram ore sample, management expects to complete a working capital equity financing in June of 2023.

Significant Developments

On February 14, 2022, the Company announced the closing of a private placement unit financing for gross proceeds of $750,000 to fund the completion of the Hazen pilot program, payment of the annual lease payment on the Llone Mountain property, federal and county claim renewal payments and for general working capital purposes. The unit financing, priced at $0.075 per unit, consisted of one common share and one half of one common share purchase warrant. The holder of a full warrant is entitled to purchase a common share of the Company at an exercise price of $0.14 per common share. The 18 month warrants have an expiry date of August 12, 2023. The Company may elect to accelerate the expiry date of the warrants in the event the closing price of Nevada Zinc's common shares equals or exceeds $0.28 for ten consecutive trading days in which case the warrants wil expire 60 days after the date on which the Company provides written notice of acceleration.

On March 22, 2022, Nevada Zinc announced that it had issued an aggregate of 5,197,813 common shares at a deemed price of $0.075 per common share, in consideration for the settlement of an aggregate of $389,836 in accrued liabilities owing to certain of its creditors in respect of intercorporate debts and management fees. A majority of the debt settlement, namely $332,236, was accrued as an intercorporate loan advanced by Olive Resource Capital Inc. ("Olive" formerly Norvista Capital

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