NGEx Minerals : Year End Report - Dec 31, 2021

NGEX MINERALS LTD.

2021 YEAR END REPORT

Management's Discussion and Analysis

and

Consolidated Financial Statements

For the Twelve Months Ended December 31, 2021

(AUDITED)

NGEX MINERALS LTD.

MANAGEMENT'S DISCUSSION AND ANALYSIS

YEAR ENDED DECEMBER 31, 2021

(Amounts in Canadian Dollars unless otherwise indicated)

The following management's discussion and analysis ("MD&A") of NGEx Minerals Ltd. ("NGEx Minerals" or the "Company") should be read in conjunction with the consolidated financial statements for the year ended December 31, 2021 and related notes therein. The financial information in this MD&A is reported in Canadian dollars unless otherwise indicated and is derived from the Company's annual consolidated financial statements prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. The effective date of this MD&A is April 13, 2022. Additional information about the Company and its business activities is available on SEDAR atwww.sedar.com and the Company's website www.ngexminerals.com.

NGEx Minerals was incorporated on February 21, 2019 under the Canada Business Corporations Act in connection with a plan of arrangement to reorganize the business of Josemaria Resources Inc. ("Josemaria"), which was completed on July 17, 2019 (the "Josemaria Arrangement"). Accordingly, certain comparative information presented in this MD&A has been prepared on a continuity of interest basis of accounting, which requires that prior to July 17, 2019, the assets, liabilities and results of operations and cash flows of NGEx Minerals be on a 'carve-out' basis from the consolidated financial statements and accounting records of Josemaria, in accordance with the financial reporting framework specified in subsection 3.11(6) of National Instruments 52-107, Acceptable Accounting Principles and Auditing Standards, for carve-out financial statements. As the carve-out entity did not operate as a separate legal entity prior to July 17, 2019, the financial position, results of operations and cash flows do not necessarily reflect the financial position, results of operations and cash flows had the carve-out entity operated as an independent entity during the comparative periods presented.

Some of the statements in this MD&A are forward-looking statements that are subject to risk factors set out in the cautionary note contained herein.

CORE BUSINESS

NGEx Minerals is a mineral exploration company with current exploration projects in Argentina and Chile. While the Company currently holds copper-gold and gold projects in South America, going forward it may also consider other jurisdictions and commodities with an emphasis on the quality and value-creation potential of each opportunity rather than a strict commodity or geographic focus.

The Company's current flagship asset is its Los Helados copper-gold deposit, located in Region III of Chile. The Company is the majority partner and operator of the Los Helados Project, which is subject to a Joint Exploration Agreement with its partner, Nippon Caserones Resources Co. Ltd. ("NCR"). NCR became the Company's partner on April 1, 2020 when Pan Pacific Copper ("PPC") transferred its interest in Los Helados to NCR. NCR is a subsidiary of JX Nippon Mining and Metals Corporation, a Tokyo-based mining and smelting company that also owns the Caserones Mine, located approximately 15km from Los Helados.

The Company's strategy is to create value for its shareholders through prudent management and deployment of its capital resources, by expanding and increasing the quality of its mineral resources through successful exploration and acquisitions and by advancing the engineering and other studies that are required to prepare its projects for eventual development by the Company and its partners or by third parties. The overall objective is to position the Company as a top tier mineral exploration-development investment opportunity.

The Company has a strong management team and board with extensive experience in the resource sector, particularly in Chile and Argentina, where the Company's current exploration projects are located. The board and management team have an appropriate mix of geological, engineering, financial, and business skills to advance the Company's projects and to generate value for its shareholders.

The Company's most recent Mineral Resource estimate for the Los Helados Project, with an effective date of April 26, 2019, is summarized in the following table:

Los Helados Mineral Resource (0.33% CuEq Cutoff)
Tonnage	Resource Grade	Contained Metal
Class	(million tonnes)	Cu (%)	Au (g/t)	Ag (g/t)	CuEq (%)	Cu (billion lbs)	Au (million oz)	Ag (million oz)
Indicated	2,099	0.38	0.15	1.37	0.48	17.6	10.1	92.5
Inferred	827	0.32	0.10	1.32	0.39	5.8	2.7	35.1

The key assumptions, parameters, and methods used to estimate the mineral resources are contained in the 43-101 technical report for the project, entitled "Technical Report on the Los Helados Porphyry Copper-Gold Deposit, Chile", dated August 6, 2019 and authored by F. Devine, P.Geo., G. Zandonai, RMCMC, and G. Di Prisco, P.Geo. This report is available on the Company's website atwww.ngexminerals.com or under the Company's profile at www.sedar.com.

The Company's common shares are listed on the TSX Venture Exchange under the symbol "NGEX".

2021 OPERATING HIGHLIGHTS AND OUTLOOK

Focus Shifts Back on Los Helados Amid Strong Outlook for Copper

In September 2021, the Company received and released assay results from previously unsampled core that was drilled at Los Helados in 2015. The core was collected from two geotechnical holes that were drilled into the high-grade core of the deposit, and the assay results are highlighted by the following:

•  LHDHG02A, intersected 1,101m @ 0.70% copper equivalent ("CuEq") (0.52% Cu, 0.28 g/t Au, 1.7 g/t Ag), including a high-grade interval of 224m @ 1.04% CuEq (0.79% Cu, 0.37 g/t Au, 2.7 g/t Ag); and

•  LHDHG03, which returned 1,134m @ 0.79% CuEq (0.59% Cu, 0.30 g/t Au, 1.9 g/t Ag), including a high-grade interval of 440m @ 1.03% CuEq (0.82% Cu, 0.31 g/t Au, 2.9 g/t Ag).

These results confirm the existence of high-grades over considerable lengths at Los Helados, serve as a reminder of the global significance of Los Helados as one of the largest copper discoveries in the past decade, and validate the Company's improved understanding of the deposit's geology, which was reinterpreted in 2020 as a result of a core relogging program.

Following up on these assay results, the Company began preparations in late 2021 for a drill program at the project to advance Los Helados amid a backdrop of strong copper market fundamentals. Drilling started in late January, 2022 and approximately 5,800 metres have been completed as of the date of this MD&A. Drilling is expected to continue until the onset of winter weather in May. The current drill program includes a mix of infill holes, designed to convert material within in the high-grade core of the Los Helados deposit from the Indicated category to Measured, and holes designed to test areas where geological and geophysical modelling suggests potential for extensions of the high-grade breccia zone. Initial assay results are still pending and will be released once received and analyzed by the Company.

The data generated from the current drill program at Los Helados, together with the revised geological model, will form the basis for a future update to the Mineral Resource estimate. In turn, an updated Mineral Resource will enable evaluation of alternate development scenarios for Los Helados, exploring optionality in scale of operations and mine plan strategies, which may illustrate alternate strategies for realization of value on this asset. In addition, the drill program will provide samples for additional detailed metallurgical testwork, which will allow for optimization of process flowsheets and a better understanding of variability within the orebody.

Drill Program Launched at Valle Ancho; Seeks to Complete Earn-In

During the third quarter of 2021, the Company commenced its 2021/2022 field and drill program at the Valle Ancho project, located in the Province of Catamarca, Argentina. The field program, which concluded in March 2022, completed 3,060 metres of diamond drilling in 8 holes.

To date complete results have been received from the initial two holes completed at the Nordin gold target, and are highlighted by VADH001, returning 150m at 1.05 g/t Au from surface, and VADH002 intersecting 198m at 0.63 g/t Au from surface, including 70m at 0.90 g/t Au. This mineralization occurs completely within oxidized rock and is characterized by even grade distribution throughout the depth of each hole. Initial assessment and interpretation suggest that the mineralization discovered in these two holes is consistent with the style of mineralization observed in the neighbouring Maricunga Gold Belt in Chile.

The initial assay results are an encouraging first step and confirm the prospectivity of the exploration targets generated by the Company's earlier reconnaissance work at Valle Ancho. Additional drill holes completed during this 2021/2022 drill campaign include:

•  Five holes testing the La Quebrada target, a porphyry copper-gold target 15km southeast of Nordin, where rock chip samples collected in 2019/2020 averaged 0.5 g/t Au and 0.2% Cu from oxided and leached rock, and samples collected from structurally controlled zones in the area returning values of up to 8.57 g/t Au and 114 g/t Ag; and

•  One hole testing the Anomalia 4 target, which is located midway between Nordin and La Quebrada with strongly anomalous gold values ranging from 0.5 g/t to 7.07 g/t and silver values up to 580 g/t.

Additional assay results from the recently completed drill campaign are pending and will be released once received and analyzed by the Company.

The Company's interest in the Valle Ancho project, comprised of the Valle Ancho and Interceptor properties, is held through an option agreement with the Province of Catamarca, whereby it may earn a 100% interest in Valle Ancho, by making US$8.0 million in total project expenditures by the end of 2022. As of the date of this MD&A, the Company anticipates making the remaining earn-in expenditures prior by the required deadline with additional expenses related, but not limited, to demobilization following the conclusion of the 2021/2022 field campaign, geochemical assay and analysis of the remaining core collected during the program, and ongoing technical consultation with respect to, and analysis of, the results of the Company's first drill campaign at Valle Ancho, which may include developing preliminary geological models and interpretations. The Company may also proceed with planning future exploration programs at Valle Ancho, including identification and prioritization of potential drill targets.

$25 Million Private Placement

On November 1, 2021, the Company closed a non-brokered private placement, pursuant to which the Company sold an aggregate of 31,250,000 common shares at a price of $0.80 per common share, generating aggregate gross proceeds of $25.0 million (the "Financing"). Share issuance costs related to the Financing totaled $0.7 million, and included professional fees, regulatory fees, and 5% finders' fees payable in cash on approximately $13.3 million of the gross proceeds from the Financing.

The common shares issued under the Financing were subject to a hold period, which expired on March 2, 2022.

Approximately $3.2 million of the net proceeds was used shortly after closing of the Financing to fully repay the amounts drawn against a US$3 million credit facility, and the remaining net proceeds from the Financing have been, and will continue to be, used towards furthering work programs in Chile and Argentina, as well as for general corporate and working capital purposes.

Potential Impacts of COVID-19

The Company's current plans are subject to certain risks and uncertainties, including, but not limited to, the ongoing COVID-19 pandemic. As the Company continues to monitor developments with respect to COVID-19, both globally and within its operating jurisdictions, it may implement changes to its business as may be deemed appropriate to mitigate any potential impacts to its business and its employees, contractors, visitors, and stakeholders (collectively, "Stakeholders"). Such changes may include, but are not limited to, temporary closures of the Company's project sites or offices, and deviations from the timing and nature of previous operating plans. Moreover, sustained COVID-19 outbreaks globally have resulted in operational and supply chain delays and disruption as a result of governmental regulation and preventative measures being implemented worldwide, including in Argentina and Chile. The Company could also be required to close, curtail or otherwise limit its operating activities as a result of the implementation of any such governmental regulation or preventative measures in the jurisdictions in which the Company operates, or as a result of sustained COVID-19 outbreaks at its project site or facilities. Any such closures or curtailments could have an adverse impact on the business of the Company.

RESULTS FROM OPERATIONS

Year Ended	Dec-21	Dec-20	Dec-191
Net loss ($000's)	5,457	5,893	5,307
Loss per share, basic and diluted ($)	0.04	0.05	0.04
Total assets ($000's)	25,733	5,378	10,840

1 Amounts presented in the table relating to periods prior to July 17, 2019, the completion date of the Josemaria Arrangement, have been prepared and presented in accordance with the continuity of interest basis of accounting.

NGEx Minerals is a junior exploration company and, as such, its net losses are largely driven by its exploration and project investigation activities and there is no expectation of generating operating profits until it identifies and develops a commercially viable mineral deposit.

Key financial results for the last eight quarters are provided in the table below.