Nevada Zinc : NZN Q3 2022 MDA

NEVADA ZINC CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022

NOVEMBER 29, 2022

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

Introduction

The following interim management's discussion and analysis ("MD&A") of Nevada Zinc Corporation ("Nevada Zinc" or the "Company") for the three and nine month periods ended September 30, 2022, has been prepared to provide material updates to the business operations, liquidity and capital resources of the Company since its last annual MD&A for the fiscal year ended December 31, 2021. This interim MD&A does not provide a general update to the annual MD&A, or reflect any non-material events since the date of the annual MD&A.

This interim MD&A has been prepared in compliance with section 2.2.1 of Form 51-102F1, in accordance with National Instrument 51-102 - Continuous Disclosure Obligations. This discussion should be read in conjunction with the Company's annual MD&A, audited annual financial statements for the years ended December 31, 2021, and December 31, 2020, together with the notes thereto, and the unaudited condensed consolidated interim financial statements for the three and nine months ended September 30, 2022, together with the notes thereto. Results are reported in Canadian dollars, unless otherwise noted. The Company's unaudited condensed consolidated interim financial statements and the financial information contained in this interim MD&A are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and interpretations of the IFRS Interpretations Committee. The unaudited condensed consolidated interim financial statements have been prepared in accordance with International Standard 34, Interim Financial Reporting. Information contained herein is presented as of November 29, 2022, unless otherwise indicated.

For the purposes of preparing this interim 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

of zinc and other base

deposit; the actual results of

chemicals off-take price volatility;

metals and the Company

Nevada Zinc's pilot plant study will

market

penetration;

increases in

may

economically

produce

be favourable and the Company will

costs;

environmental

compliance

zinc

sulfate

monohydrate

be able to access financing to build

and

changes

in

environmental

from the deposit.

a processing plant based upon

and other local legislation and

further

engineering

and

geological

regulation;

changes in economic

study;

the

deposit's

mineralized

conditions; the Company's ability

material will be suitable for making

to retain and attract skilled staff.

zinc

chemicals,

operating,

and

development costs will not exceed

Nevada

Zinc's

expectations;

the

Company will be able to retain and

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 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

Availability of sufficient cash and

to

carry

out

anticipated

activities of the Company for the

cash

equivalents

and availability

business

plans,

including

twelve

month

period

ending

of

external

financing

on

the funding of development

November 29, 2023, and the

acceptable

terms;

zinc chemical

studies

and

exploration

funding of the costs associated

price volatility, changes in equity

costs on its Lone Mountain

therewith will be funded from the

markets;

the

uncertainties

property,

completion

of its

Company's

cash

and

cash

involved in interpreting geological

pilot

plant

study

and

equivalents and equity raises; the

data and confirming title to

subsequent studies leading

Company will be able to retain and

acquired properties;

increases in

to an ultimate

construction

attract skilled staff; all applicable

costs;

environmental

compliance

decision.

regulatory

and

governmental

and

changes

in

environmental

approvals

for

exploration

and

and other local legislation and

development

projects

and

other

regulation;

changes

in economic

operations will be received on a

conditions; the Company may be

timely basis upon terms acceptable

unable to retain and attract skilled

to Nevada Zinc; the Company

will

staff; receipt of applicable permits.

not be adversely affected by market

competition; the price of zinc

chemicals will be favourable to

Nevada Zinc; no title disputes exist

with respect to Nevada Zinc's Lone

Mountain property.

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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 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.

Since early 2021 Nevada Zinc has been actively assessing the potential to economically produce zinc chemicals for the US agricultural industry from its Lone Mountain 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 program to determine if the Company can economically produce zinc sulfate monohydrate, a micronutrient zinc-based fertilizer and animal feed from its Lone Mountain 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 completed the first phase of the program by producing bench scale high-grade zinc sulfate monohydrate from the Company's Lone Mountain zinc carbonate-oxide deposit. In May of 2022 Hazen began the pilot plant phase of the program with the objective to economically produce approximately 100 pounds of zinc sulfate monohydrate. Hazen carried out comminution work using ore from the Company's Lone Mountain deposit to establish the optimal material size in order to reduce the amount of sulphuric used in the production of a pre-concentrate. Ore samples grading 8% zinc were crushed and screened in a number of experiments leading to the successful production of a 16% zinc pre-concentrate by the end of August. Hydrometallurgical work, the final phase of the pilot program, designed to produce a

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commercial grade zinc sulfate monohydrate product began in mid September with favourable results generated to-date. The pilot plant work, including project economics, is projected to be completed in January of 2023.

Overall Performance

The Company had a net and comprehensive loss of $319,151 and $850,277 for the three and nine months ended September 30, 2022 compared to a net and comprehesive loss of $203,703 and $828,591 for the three and nine months ended September 30, 2021. The increase in the year over year loss for the three months ended September 30, 2022 of $115,448 is primarily attributable to share based payment in 2022, reduction in year over consulting fees and salaries incurred in the third quarter of 2022.

The Company had total assets of $164,268 (the Company expenses all of its exploration and acquisition costs), total liabilities of $506,756 and a shareholders' deficiency of $342,488 as at September 30, 2022, compared to total assets of $58,232, total liabilities of $842,754 and a shareholders' deficiency of $784,522 as at December 31, 2021. The increase in total assets of $106,036 is the result of the remaining proceeds from the equity financing the Company closed in March of 2022.

As at September 30, 2022, the Company had current assets of $142,895 compared to current assets of $36,859 as at December 31, 2021, and current liabilities of $506,756 as at September 30, 2022, compared to current liabilities of $842,754 as at December 31, 2021, resulting in a working capital deficit of $363,861 as at September 30, 2022, compared to a working capital deficit of $805,895 as at December 31, 2021. Upon successful completion of the Hazen pilot plant program the Company will proceed with an equity financing in Q1 2023 to fund the next development stage of Nevada Zinc's zinc fertilizer and animal feed project.

Significant Developments

On September 20, 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.

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 Corporation) and affiliated entities to the Company, in connection with the Company's mineral lease payments and mining claims maintenance fees paid over the course of 2019, and 2020. Following the debt settlement Olive holds, directly or indirectly, 17,927,406 common shares, representing approximately 18.02% of the Company's common shares issued and outstanding on a non-diluted basis as of the date

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