Oceanic Iron Ore : June/23 MD&A

MANAGEMENT DISCUSSION AND ANALYSIS

For the three and six months ended June 30, 2023 and 2022

Oceanic Iron Ore Corp.

Dated August 22, 2023

Oceanic Iron Ore Corp.

Management's Discussion and Analysis of Financial Condition and Results of Operations For The Three and Six Months Ended June 30, 2023 and 2022

The following is management's discussion and analysis ("MD&A") of the results and financial condition of Oceanic Iron Ore Corp. ("Oceanic" or the "Company") and should be read in conjunction with the accompanying unaudited condensed consolidated interim financial statements and related notes for the three and six months ended June 30, 2023 and 2022 (the "Interim Financial Statements), as well as the audited consolidated financial statements and related notes for the years ended December 31, 2022 and 2021 (the "Annual Financial Statements"). The Company reports its financial statements in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. All figures are reported in Canadian, dollars unless otherwise indicated.

Certain information included in this discussion may constitute forward looking statements. Forward looking statements are based on current expectations and entail various risks and uncertainties. These risks and uncertainties could cause or contribute to actual results that are materially different from those expressed or implied. Please see the section entitled "Forward Looking Statements" of this document for further detail on forward looking statements. The effective date of this report is August 22, 2023.

Description of Business

The Company was incorporated on March 8, 1986 under the British Columbia Business Corporations Act. Its common shares are traded on the TSX Venture Exchange (the "TSXV") under the symbol "FEO".

The Company is focused on the exploration and development of the Ungava Bay iron property (the "Property") in Nunavik, Québec, which the Company acquired in November 2010. The Property comprises three project areas: Hopes Advance (also referred to as the "Project" throughout), Morgan Lake and Roberts Lake, which cover over 35,999 hectares of iron formation and are located within 20 - 50 km of tidewater. The Company has a 100% interest, subject to a 2% net smelter returns royalty ("NSR") in the Property. The Company's two NSR holders are each entitled to annual advance NSR payments of $100,000 until the commencement of commercial production on the Company's Hopes Advance Project. Advanced royalty payments are deductible from actual royalty payments subsequent to the commencement of commercial production.

In December 2019, the Company announced the results of a revised and re-scoped National Instrument 43-101 Preliminary Economic Assessment in respect of the Company's Hopes Advance Project ("Study"). The objective of the Study was to rescope the Project profile and production scale using Measured and Indicated Mineral Resources estimated within three of the ten defined deposits from Hopes Advance in order to reduce the up-front capital required to bring the Project to commercial production. The Company continues to pursue a number of options to improve its financial capacity, including securing a strategic partner to further advance the Hopes Advance project, and obtaining cash flow through other forms of financing. The success of raising such funds cannot be assured.

Qualified Person

Eddy Canova, P.Geo., OGQ(403), a Qualified Person as defined by NI 43-101, has reviewed and is responsible for the technical information contained in this document.

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Oceanic Iron Ore Corp.

Management's Discussion and Analysis of Financial Condition and Results of Operations For The Three and Six Months Ended June 30, 2023 and 2022

Discussion of Operations

The following information for the three months ended June 30, 2023 and 2022 ("Q2 2023" and "Q2 2022", respectively) and six months ended June 30, 2023 and 2022 ("YTD 2023" and "YTD 2022", respectively) was derived in conjunction with the Interim Financial Statements which are available on www.sedarplus.ca.

		Q2 2023		Q2 2022		YTD 2023		YTD 2022
Expenses
Consulting and management fees	$	73,750	$	58,750	$	147,500	$	117,500
Directors' fees		7,500		7,500		15,000		15,000
License and insurance		5,852		7,161		12,427		16,992
Office and general		3,906		3,562		9,317		7,279
Professional fees expense		6,598		14,181		10,531		26,705
Rent		2,668		2,612		5,335		5,211
Share-based compensation		43,660		17,018		43,660		39,186
Transfer agent and regulatory		8,946		6,145		15,199		8,982
Wages and benefits		1,975		17,264		4,695		34,239
Loss from operations		(154,855)		(134,193)		(263,664)		(271,094)
Other income (expenses)								(24,150)
Gain (loss) on non-cash derivative liabilities		1,021,577		887,306		32,704
Convertible debenture accretion expense		(134,681)		(100,177)		(267,856)		(199,056)
Total other income (expenses)		886,896		787,129		(235,152)		(223,206)
Net income (loss) and comprehensive income (loss)	$	732,041	$	652,936	$	(498,816)	$	(494,300)

The factors affecting the changes in net loss primarily consisted of:

Expenses associated with convertible debentures

The derivative liabilities of the Company are carried at fair value, which fair value is derived by the use of binomial option models. During Q2 2023 and YTD 2023, the Company's share price reduced relative to the prior periods and a lower share price returns a lower fair value of the liability as determined by the option valuation model.

Share-based compensation

Share-based compensation increased by $26,642 and $4,474, respectively when comparing Q2 2023 to Q2 2022 and YTD 2023 to YTD 2022. The increase in both periods is related to the fact that during Q2 2023, the Company granted 1,540,000 stock options (of which one-third have vested in the period to date) compared to nil stock options granted in 2022. The share-based compensation in the comparative periods primarily relates to the vesting of 1,045,000 (of which approximately two-thirds had vested in the comparative period to date) of stock options granted during FY2021.

Liquidity, Capital Resources and Going Concern

While the condensed consolidated interim financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business as they come due, certain conditions and events could result in a material uncertainty casting significant doubt on the validity of this assumption. For the period ended June 31, 2023, the Company had an accumulated deficit of $34,421,901 a working capital deficit of $1,359,671.

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Oceanic Iron Ore Corp.

Management's Discussion and Analysis of Financial Condition and Results of Operations For The Three and Six Months Ended June 30, 2023 and 2022

The Company's ability to continue on a going concern basis for and beyond the next twelve months depends on its ability to successfully raise additional financing for continued operations and for the necessary capital expenditures required to achieve planned principal operations. The Company continues to pursue a number of options to improve its financial capacity, including securing a strategic partner to further advance the Hopes Advance project. While the Company has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms acceptable to the Company.

Factors that could affect the availability of financing include the Company's performance, the state of international debt and equity markets which may be adversely impacted by uncertainty arising from the impacts of any global pandemics, as and if they arise, investor perceptions and expectations, the retention of key executive management and the state of global financial and metals markets.

The Company's net assets and working capital position(1) were as follows:

As at	As at
June 30, 2023	December 31, 2022
$	$

Assets
Cash	508,054	662,818
Other current assets	19,704	12,845
Current assets	527,758	675,663
Mineral properties	44,276,252	44,178,442
TOTAL ASSETS	44,804,010	44,854,105
Liabilities
Current liabilities	1,887,429	1,789,325
Non-current liabilities	3,884,128	3,857,218
TOTAL LIABILITIES	5,771,557	5,646,543
NET ASSETS	39,032,453	39,207,562
WORKING CAPITAL DEFICIT (1)	(1,359,671)	(1,113,662)

1. Working capital is calculated as current assets less current liabilities

The changes in the Company's net assets and working capital position were primarily the result of the non- cash fair value losses associated with the convertible debentures. Cash reductions on a quarterly basis are kept to a minimum while the Company seeks to secure a strategic partner to further advance the Hopes Advance project.

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Oceanic Iron Ore Corp.

Management's Discussion and Analysis of Financial Condition and Results of Operations For The Three and Six Months Ended June 30, 2023 and 2022

The Company's cash flow activities have been summarized as follows:

		Q2 2023		Q2 2022		YTD 2023		YTD 2022
Cash used in operating activities	$	(66,241)	$	(22,857)	$	(122,262)	$	(77,578)
Cash used in investing activities		(3,871)		(15,867)		(32,502)		(30,050)
Cash used in financing activities		-		(67,045)		-		(134,090)
Change in cash during the period		(70,112)		(105,769)		(154,764)		(241,718)
Cash, beginning of period		578,166		157,213		662,818		293,162
Cash, end of period	$	508,054	$	51,444	$	508,054	$	51,444

The Company's undiscounted commitments as at June 30, 2023 were as follows:

	Less than 1 year		1 -3 years	More than 3 years		Total
Accounts payable and accrued liabilities	$	329,337	$	-	$	-	$	329,337
Due to related parties		320,978		-		-		320,978
Convertible debenture - liability component		1,092,681		2,189,974		2,176,350		5,459,005
Advance royalty payable		200,000		400,000		400,000		1,000,000
	$	1,942,996	$	2,589,974	$	2,576,350	$	7,109,320

As at June 30, 2023, the convertible debentures and non-cash derivative liabilities have a combined carrying value of $4,465,098, representing the discounted face value of the debentures of $3,615,303 and the fair value of the non-cash embedded derivative liability of $3,671,528, offset by the deferred loss balance of $2,821,733.

The total future cash outflows associated with the repayment of the principal of the Series A Debentures ($760,000), Series B Debenture ($837,500), Series C Debentures ($1,557,548) and Series D Debentures ($1,220,000) cannot exceed the combined amount of principal of $4,375,048. Furthermore, provided that the Company's share price trade at levels in excess of the prevailing conversion price of the Series A Debentures and the Series D Debentures ($0.07/unit), management expects that the Series A Debentures and Series D debentures may be converted into units (comprised of one common share and one share purchase warrant each) and the resulting cash outflow could be as low as $nil. As the conversion price of the Series C Debentures ($0.19/unit) and Series B Debenture ($0.10/unit) exceeds the Company's share price at June 30, 2023 ($0.07/share), future cash outflows associated with the redemption of the Series B and C Debentures could be as high as $2,395,048.

Interest associated with the debentures above are settable in cash or common shares quarterly, at the election of the Company.

On January 3, 2023, the Company elected to settle $94,107 in accrued interest payable under the Company's previously issued convertible debentures through the issuance of 1,344,374 common shares of the Company, at a price of $0.07 per share.

On March 31, 2023, the Company elected to settle $92,970 in accrued interest due under the Company's previously issued convertible debentures through the issuance of 1,093,760 common shares of the Company, at a price of $0.085 per share.

On June 30, 2023, the Company elected to settle $92,970 in accrued interest due under the Company's previously issued convertible debentures through the issuance of 1,328,141 common shares of the Company, at a price of $0.07 per share.

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