Oroco Resource : 2024 Q1 MDA

Oroco Resource Corp.

Management Discussion and Analysis

For the three months ended August 31, 2023

Dated as of October 30, 2023

This Management Discussion and Analysis has been prepared as of October 30, 2023 and should be read in conjunction with the Company's condensed interim consolidated financial statements and related notes for the three months ended August 31, 2023 and the audited consolidated financial statements and related notes thereto for the year ended May 31, 2023 (the "Financial Statements"). Those financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. All amounts in the financial statements and in this discussion and analysis are expressed in Canadian dollars, unless otherwise indicated.

FORWARD LOOKING INFORMATION

This management discussion and analysis ("MD&A") contains certain forward-looking statements and information relating to Oroco Resource Corp. ("the Company") and its operations that are based on the beliefs of its management as well as assumptions made by and information currently available to the Company. When used in this document, the words "anticipate," "believe," "budget", "estimate," "expect", "intends", "plans", "potential" and similar expressions, as they relate to the Company or its management and operations, are intended to identify forward looking statements.

These forward-looking statements or information relate to, among other things: the Company's future financial and operational performance; the sufficiency of the Company's current working capital, anticipated cash flow or its ability to raise necessary funds; the anticipated amount and timing of work programs; our expectations with respect to future exchange rates; the estimated cost of and availability of funding necessary for sustaining capital; forecast capital and non-operating spending; and the Company's plans and expectations for its property, exploration and community relations operations.

These forward-looking statements and information reflect the Company's current beliefs as well as assumptions made by, and information currently available to the Company and are necessarily based upon a number of assumptions that, while considered reasonable by the Company, are inherently subject to significant operational, business, economic, competitive, political, regulatory, and social uncertainties and contingencies. These assumptions include: cost estimates for exploration programs; cost of drilling programs; prices for base and precious metals remaining as estimated; currency exchange rates remaining as estimated; capital estimates; our expectation that work towards the establishment of mineral resource estimates and the assumptions upon which they are based will produce such estimates; prices for energy inputs, labour, materials, supplies and services (including transportation); no labour-related disruptions at our operations; no unplanned delays or interruptions in scheduled work; all necessary permits, licenses and regulatory approvals for our operations being received in a timely manner and can be maintained; and our ability to comply with environmental, health and safety laws, particularly given the potential for modifications and expansion of such laws. The foregoing list of assumptions is not exhaustive.

Forward-looking statements and information involve known and unknown risk, uncertainties, assumptions and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Although the Company has attempted to identify important factors that could cause actual results or events to differ materially from those expressed or implied in the forward-looking statements (see "Risks and Uncertainties" in this MD&A), there may be other factors, such as the coronavirus global pandemic, which could cause results not to be as anticipated, estimated, described, or intended. Investors are cautioned against attributing undue certainty or reliance on forward-looking statements or information.

Forward-looking statements and information contained herein are made as of the date of this MD&A and the Company does not intend, and disclaims any obligation to update or revise forward-looking statements or information, whether as a result of new information, future events or to reflect changes in assumptions or in circumstances or any other events affecting such statements or information, other than as required by applicable law.

QUALIFIED PERSON

Mr. Andrew Ware, P. Geo., a Qualified Person under NI 43-101 and a senior consulting geologist to the Company, has reviewed and approved the technical disclosure in this management discussion and analysis.

1

THE COMPANY

The Company was incorporated under the British Columbia Business Corporations Act on July 7, 2006. The Company's head office is located at Suite 1201 - 1166 Alberni Street, Vancouver, B.C., V6E 3Z3. The Company and its subsidiaries are engaged in the acquisition, exploration and development of mineral properties in Mexico with a primary focus on the confirmation and expansion of the historical resource of the Santo Tomas porphyry copper project (the "Santo Tomas Project") in Sinaloa State, Mexico.

The Company is listed on the TSX Venture Exchange ("TSX-V") under the symbol "OCO", and it also trades on the Frankfurt Stock Exchange Open Market under the trading symbol "OR6" and the US OTC exchange under the trading symbol "ORRCF.PK". The Company's website address is: "www.orocoresourcecorp.com".

The Company's subsidiaries are as follows:

	Country of	Percentage of
Name of Subsidiary	Incorporation	Ownership	Principal Activity
Minera Xochipala S.A. de C.V. ("MX")	Mexico	100%	Exploration in Mexico
Xochipala Gold S.A. de C.V. ("XG")	Mexico	86%	Exploration in Mexico
0973496 B.C. Ltd.	Canada	100%	Holding company
Altamura Copper Corp. ("Altamura")	Canada	100%	Holding company
Aureum Holding Corporation	Canada	100%	Holding company

The Company also holds: (1) an inactive, nominal company incorporated in Mexico (Desarrollos Copper, S.A. de C.V.); and

1. a majority interest in an inactive subsidiary incorporated in the United States (Aztec Copper Inc.), and its inactive subsidiary incorporated in Mexico (Prime Aztec Mexicana, S.A. de C.V.).

On March 2, 2020, pursuant to an option agreement dated September 27, 2018 (the "Altamura Option Agreement") the Company acquired 100% ownership of Altamura. Altamura held a majority interest in XG, which itself holds registered title to the seven mineral concessions (the "Core Concessions") which cover the known core of the Santo Tomas Project. For a description of the Altamura transaction, see the Company's Management Information Circular filed on SEDAR on November 22, 2019. In March 2021, XG issued 5 shares to Altamura for conversion of inter- company debt into equity, and in April 2021, the Company acquired the other XG shareholder' rights and interests in 25 shares of XG in consideration for US$1,500,000 (the "XG Share Rights Acquisition"). The Company now holds an 86.1% interest in XG.

MINERAL PROPERTIES

Santo Tomas Project, Sinaloa State, Mexico

The Company is focused on the exploration and development of its Santo Tomas Porphyry Copper Project ("Santo Tomas" or the "Project") in Sinaloa State, Mexico.

On October 17, 2023 the Company announced a Preliminary Economic Assessment ("PEA") and updated Mineral Resource Estimate ("MRE") for the North Zone and South Zone for Santo Tomas. The PEA results support a staged open pit mine and processing plant starting at 60,000 tonnes per day ("t/d") in year 1 of production, expanding to 120,000 tpd in year 2 over a 20.1-year Life of Mine ("LOM"). Production is preceded by two years of construction and pre-stripping. The PEA has been prepared by Ausenco Engineering USA South Inc. ("Ausenco"). The updated MRE and geologic model were prepared by SRK Consulting (US), Inc. of Denver, Colorado and SRK Consulting (Canada), Vancouver, BC ("SRK"). SRK (Canada) was responsible for geotechnical modeling. The mine planning and mine costs components of the PEA were prepared by Mining Plus Canada Consulting Ltd. ("Mining Plus").

Highlights of the Santo Tomas PEA include:

• US$2.33 billion pre-tax NPV (8%) and US$1.24 billion after-tax NPV (8%)
• 23.0% pre-tax IRR; 17.3% after-tax IRR.
• Total LOM payable copper production of 4,749 M lb.
• Pre-taxpayback of 4.1 years; after-tax payback of 5.0 years from first concentrate production.

2

MINERAL PROPERTIES (cont'd…)

Santo Tomas Project, Sinaloa State, Mexico (cont'd…)

• Initial capital costs estimated at US$1,339.9 million; sustaining and expansion capital costs estimated at US$1,134.5 million.
• Average annual LOM C1 Cash Cost of US$1.66/lb Cu on by-product basis.
• An ultimate pit design constrained resource of 388 Mt of Indicated and 460 Mt of Inferred material.

Santo Tomas Project PEA Overview

The Santo Tomas property comprises 9,034 ha of mineral concessions encompassing significant porphyry copper mineralization in northern Sinaloa and southwest Chihuahua, Mexico. The Project is located in the Santo Tomas Porphyry District, which extends from Santo Tomas northward to the Jinchuan Group's Bahuerachi Project located approximately 14 km to the north-northeast. The PEA was conducted using data (including 27,382 Cu assays) from 68 diamond drill holes (43,063

1. drilled by the Company and 90 legacy reverse circulation and diamond drill holes (21,075 m, for a total of 64,138 m in 158 drill holes) in the Project's North Zone and South Zone. The data from the seven exploration diamond drill holes in Brasiles Zone and the single geotechnical hole (GT001) drilled by the Company were excluded from consideration in the MRE and PEA. Oroco's entire updated drill hole database (including PEA excluded holes) contains 166 new and legacy drill holes totaling 69,556 m with lithological logging data and 29,992 Cu assays.

The commodity price assumptions for the Discounted Cash Flow ("DCF") analysis are presented in Table 1. Key results are presented in Tables 2 & 3.

Table 1:	PEA DCF Price Assumptions
	Commodity		Unit			Price*
	Cu	US $ / lb	3.85
	Mo	US $ / lb	13.50
	Au	US $ / t.oz	1,700
	Ag	US $ / t.oz	22.50

*Cash flow model assumptions only

Table 2: Mining and Production - Key Results

Key Assumptions		Unit		LOM
Exchange Rate		MXN / US$		19.76
Fuel Price		MXN / L		20.41 (US$1.03)
Production Profile		Unit		LOM
Total Open Pit Tonnage		Mt		1,831
Total Open Pit Mineralized Material Mined		Mt		848
Open Pit Strip Ratio		Waste: mill feed		1.16
Daily Throughput (Year 1 // Year 2 on)		kt/d		60 // 120
LOM concentrate production)		Years		20.1
Copper in Mill Feed		M lb		5,920
Molybdenum in Mill Feed		M lb		141.7
Gold in Mill Feed		koz Au		747.3
Silver in Mill Feed		koz Ag		54,998
LOM mill feed (Indicated // Inferred)		Mt		388 // 460
Average Cu payable / year - LOM		M lb		236
Average Cu payable / year - First 5 Years (1)		M lb		281
Payable (2) Copper LOM (in concentrate)		M lb		4,749
Payable Molybdenum LOM (in concentrate)		M lb		82.6
Payable Silver LOM (min 30 g/t payable in Cu Concentrate)		koz		26,330
Payable Gold LOM (min 1 g/t payable in Cu Concentrate)		koz		331.9
Operating Costs (US$/lb.)		Unit		LOM
C1 Cash Costs Copper (By-Product Basis) (3)		US$/lb		1.66
C3 Cash Costs Copper (By-Product Basis) (4)		US$/lb		2.00
Sustaining and Development Capital (6)		US$M		1,134.5

3

MINERAL PROPERTIES (cont'd…)

Santo Tomas Project, Sinaloa State, Mexico (cont'd…)

Table 1: PEA DCF Price Assumptions (cont'd…)

Capital Expenditures (5)

Unit

LOM

Initial Capital (6)	US$M	1,339.9
Sustaining and Development Capital (6)	US$M	1,134.5
Closure Costs (5 years, year 20 - 24)	US$M	209.2
Estimated Salvage Value	US$M	0

Notes:

1. First 5 Years at full production, starting year 2.
2. Payable metals consider mining dilution, concentrator recoveries and Treatment Charges/Refining Charges (TC/RC).
3. C1 Cash Costs consist of mining costs, processing costs, mine-level G&A and transportation costs net of by-product credits.
4. C3 Cash Costs includes C1 Cash Costs plus sustaining and expansion capital, royalties, and closure costs.
5. All capital expenditures are inclusive of contingency provisions to allow for uncertain cost elements, which are predicted to occur but are not included in the cost estimate.
6. Net of leasing capital deferment and leasing costs.

Table 3:	Key Financial Results and Costs
	Economics	Unit	LOM
NPV at 8% (pre-tax //post-tax)	US$M	2,328.9 // 1,237.6
IRR (pre-tax //post-tax)	%	23.0 // 17.3
Payback (pre-tax //post-tax)	Years	4.1 // 5.0
Revenue over LOM	US$M	20,553
Initial Capital
Mining Pre-Stripping (Capitalized Opex)	US$M	183.5
Mining Capital Equipment (1)	US$M	328.9
Total Mining (1)		US$M	512.4
Processing		US$M	976.1
Total Initial Capital (1)	US$M	1,488.5
Total Initial Capital Net of Leasing (2)	US$M	1,339.9
Sustaining Capital
Mining Equipment (3)	US$M	203.5
Processing		US$M	72.9
Total Sustaining Capital (3)	US$M	276.4
Total Sustaining Capital Net of Leasing (2)	US$M	467.5
Expansion Capital - Processing (year 2)	US$M	667.0
Operating Costs
Mining Cost per tonne mined (4)	US$ / t	2.30
Mining Cost per tonne milled (4)	US$ / t	4.77
Processing Cost per tonne milled	US$ / t	4.25
G&A Cost per tonne milled	US$ / t	0.67
Total Operating Cost (3)	US$ / t	9.68

Notes:

1. Includes the full mining capital cost without deferral of capital attributable to leasing in the amount of M$191.1 from initial capital to sustaining capital. Excludes leasing costs in the amount of M$42.4 incurred prior to production.
2. Supplier-sourcedleasing terms from October 2023 are used in the DCF model mine fleet cost calculations that include a 5-year lease period with 10.3% interest, 0.5% upfront fee, and no residual payment.
3. Includes sustaining capital mining equipment without inclusion of costs attributable to the deferral of initial mining equipment in the amount of M$191.1.
4. Excludes leasing costs.

PEA Economic Sensitivities

Project economics and cash flows are most sensitive to changes in the price of copper (Figure 1). Mined grade and recovery sensitivity is high and future studies will seek to optimize these parameters. However, the highest potential for change in economics is anticipated to result from future changes in copper pricing.

4

MINERAL PROPERTIES (cont'd…)

Santo Tomas Project, Sinaloa State, Mexico (cont'd…)

Figure 1:Post-Tax NPV and IRR Sensitivity Plots

PEA Mineral Resources

The PEA MRE prepared by SRK Consulting (U.S.), Inc. in accordance with the Canadian Institute of Mining, Metallurgy, and Petroleum ("CIM") Definition Standards (the "CIM Standards") incorporated by reference in National Instrument 43-101 ("NI 43-101"), with an effective date of October 11, 2023. The technical report will be prepared and released by the Company and will be available at www.orocoresourcecorp.com and on SEDAR (www.sedarplus.ca) under the Company's profile, within 45 days of this news release.

The mineral resource estimation process includes updated structural, lithologic, and mineralization models, though the PEA MRE has not materially changed from the previous study, effective April 27, 2023, due to the inclusion of two additional drill holes in the North Zone and updated economic assumptions based on the PEA study. The Company provided SRK with an updated exploration database including drill hole collar and downhole survey data, geological logging, assay, specific gravity, geotechnical classification, and associated information.

The resource estimation methodology involved the following procedures:

• Database compilation and verification,
• Construction of wireframe models for the major structures, lithotypes, and controls on mineralization,
• Definition of resource domains using a combination of lithotypes, structure, and mineralization grade shells,
• Data conditioning (compositing and capping) for statistical and geostatistical analyses,
• Determination of spatial continuity through variography within the estimation domains,
• Block modeling and grade interpolation for all key economic variables (Cu, Mo, Ag, Au, and Sulfur [S]) and secondary variables (arsenic [As], calcium [Ca], potassium [K], lead [Pb], and zinc [Zn]),
• Block model validation,
• Resource classification,
• Assessment of "reasonable prospects for eventual economic extraction" ("RPEEE") using a constraining economic pit shell and selection of an effective cut-off grade ("CoG"), and
• Preparation of the updated mineral resource statement.

SRK undertook the geological modeling and mineral resource estimate using Seequent Leapfrog Geo and Leapfrog Edge, respectively. The procedure involved construction of wireframe models for structural geology controls, key geological and mineralization domains, data conditioning (compositing and capping) for statistical analysis, variography, block modeling and grade interpolation followed by block model validation. Grade was estimated using a combination of ordinary kriging and

5

MINERAL PROPERTIES (cont'd…)

Santo Tomas Project, Sinaloa State, Mexico (cont'd…)

inverse distance weighting cubed estimates for copper, molybdenum, gold, and silver. Sulfur grades are estimated using inverse distance weighting squared ("IDW2") and bulk density is estimated using a combination of simple kriging and IDW2. Grade estimation was based on block dimensions of 50 m x 50 m x 10 m for the PEA model (unchanged from the previous 2023 study). The block size reflects current data spacing across the Project while considering a likely open pit mining method. Classification of mineral resources considers the geological complexity (structure, lithology, alteration, and mineralization), spatial continuity of mineralization, data quality, and spatial distribution of drilling conducted at the Project.

The PEA MRE is supported by 64,138 m of drilling in 158 holes. The drilling data represents a combination of holes completed by Oroco from 2021 to 2023 and historical drill holes but excludes drilling at Brasiles Zone and one geotechnical hole.

The PEA MRE includes the two primary mineralization zones identified at Santo Tomas: North Zone and South Zone. These zones display similar mineralization styles but are physically separated by localized post-mineralization faults and material currently defined as waste due to a lack of drilling. Consistent with the previous study, the MRE is not constrained by the location of the Huites Reservoir. Mineral resources are reported above an effective cut-off grade (CoG) of 0.15% Cu and constrained by an economic pit shell (see Table 4).

Table 4:	Mineral Resource Statement for the Santo Tomas Project, effective October 11, 2023
		Tonnes		Average Grade				In-situ Metal
Category	Zone	CuEq	Cu	Mo	Au	Ag	CuEq	Cu	Mo M	Au
Mt	Ag koz
			%	%	%	g/t	g/t	M lb	M lb	lb	koz
Indicated	North Zone	561.0	0.37	0.33	0.008	0.027	2.1	4,579	4,077	98.4	487.4	37,762
Total Indicated	561.0	0.37	0.33	0.008	0.027	2.1	4,579	4,077	98.4	487.4	37,762
	North Zone	118.3	0.33	0.30	0.006	0.018	1.7	848	771	14.9	66.8	6,556
Inferred	South Zone	430.8	0.35	0.31	0.008	0.022	2.0	3,317	2,958	73.9	309.0	27,902
	Total Inferred	549.1	0.34	0.31	0.007	0.021	2.0	4,166	3,729	88.8	375.8	34,458

Notes:
(1)	Mineral resources are not mineral reserves and do not have demonstrated economic viability.
(2)	Table abbreviations include: % = percent, g/t = grams per metric tonne, Mlb = million pounds, Koz = thousand troy ounces.
(3)	The mineral resources are reported at an effective cut-off grade (CoG) of 0.15% Cu.
(4)	All figures are rounded to reflect the relative accuracy of the estimates. Totals in the above table may not sum or recalculate from related values in
	the table due to rounding of values in the table, reflecting fewer significant digits than were carried in the original calculations.
(5)	The mineral resources exclude identified oxide mineralization due to a lack of confidence in recovery assumptions of oxidized tonnages at this
	phase of the Project.
(6)	Metal assays are capped where appropriate. At the PEA level of the Project, it is the Company's opinion that all the elements included in the copper
	equivalent calculation have a reasonable potential to be recovered and sold.
(7)	All dollar amounts are presented in U.S. dollars.
(8)	Bulk density is estimated on a block basis using specific gravity data collected on diamond drill core.
(9)	Reasonable prospects of eventual economic extraction (RPEEE) are demonstrated through use of an economic pit shell based on long-term copper
	price of $4.00/lb, molybdenum price of $13.50/lb, a gold price of $1,700/oz, and a silver price of $22.50/oz. Metal recovery factors used in the
	determination of CoG and economic pit shell for Cu, Mo, Au, and Ag have been applied based on metallurgical recovery calculations based on
	average feed grade. A 45-degree slope angle was applied.
(10)	The Huites Reservoir boundary was ignored for the purposes of mineral resource determination. This is consistent with the previous study.
(11)	The economic CoG was calculated to be 0.11% Cu but for consistency with the previous study, Oroco has elected to use an effective CoG at 0.15%
	Cu. CoG assumptions include a copper price of $4.00/lb., mining cost of $2.27/t, processing costs of $4.23/t, G&A costs at $0.65/t, mine recovery
	at 98%, mean Cu recovery at 83.7%, and royalties at 1.5%, have been applied in consideration of the RPEEE.
(12)	Equivalent Copper (CuEq) percent is calculated with the formula CuEq% = ((Cu grade * Cu recovery [83.7%] * Cu price) + (Mo grade * Mo
	recovery [59.1%] * Mo price) + (Au grade * Au recovery [58.6%] * Au price) + (Ag grade * Ag recovery [54.2%] * Ag price)) / (Cu price * Cu
	recovery [83.7%]). It assumed that the Santo Tomas Project would produce a conventional (flotation) copper concentrate product based on metal
	recoveries indicated by PEA metallurgical test work and mean Indicated Resource feed grades.
(13)	Reported contained individual metals in the table above represent in-situ metal, calculated on a 100% recovery basis, except for CuEq% which
	applies mean recovery assumptions (see Note 12)..

6

MINERAL PROPERTIES (cont'd…)

Santo Tomas Project, Sinaloa State, Mexico (cont'd…)

Mineralization has been identified outside the current economic pit shell. The PEA highlights the potential to define additional mineral resources on the property. There is identified exploration potential for additional mineralization in the southeastern and southwestern portions of the South Zone based on observations from drilling and surface outcrops in the area.

PEA Mine Design

The PEA Mine Design, prepared by Mining Plus, contemplates open pit development that ensures no incursion upon the Huites Reservoir, maintaining a 100 m berm between the reservoir high water mark and the pit limit thereby remaining outside of CONAGUA's (Mexican water authority) jurisdiction boundary (the "CONAGUA limit"). These constraints were selected by the Company. Avoiding the CONAGUA limit and applying a series of pit slope constraints derived from preliminary geotechnical domains defined by SRK from Phase 1 drilling on the Project, a Mineral Resource within the ultimate pit design (by classification and grades) for this PEA has been defined as shown in Table 5.

Table 5:	Pit Constrained Resource: Mining-Plus
				Indicated	Inferred
In-pit Resource(1) Mt			387.98	459.70
Copper %				0.340	0.297
Molybdenum %				0.008	0.008
Gold g/t				0.033	0.023
Silver g/t				2.101	1.948
Notes:

1. The Mill Feed Tonnes and Grade are Mineral Resources, not Mineral Reserves, but form part of the potential economic viability analysis.
2. All dollar amounts are presented in U.S. dollars (Note 3, below).
3. The marginal CoG was calculated to be 0.14% CuEq (Cut off NSR = 7 $/t). CoG parameters include a copper price of $3.80/lb., molybdenum price of $12.00/lb., gold price of $1650/oz., silver price of $22.0/oz., processing costs of $6.00/t, G&A costs at $1.00/t, mine recovery at 98%, developed metallurgical recovery formulas, and royalties at 1.5%. CuEq is calculated the formula CuEq% = [Cu grade * Cu recovery * (Cu price - Selling cost Cu) + Mo grade * Mo recovery *(Mo Price - selling cost Mo) + Au grade * Au recovery * (Au Price - selling cost Au) + Ag grade * Ag recovery* (Ag Price - selling cost Ag)] / [(Cu Price - selling cost) * Cu recovery].
4. Metallurgical recovery formulas were obtained from Ausenco's "Oroco Resource Corp. Santo Tomas Project Metallurgical Testwork Review June 9, 2023" report.

The Mine Design proposes a standard open-pit, truck and shovel operation with 10-meter bench intervals. Haul trucks with a capacity of 194 tonnes will be used for hauling mineralized material to the mineral processing plant, stockpile facilities and the waste rock storage facility ("WRSF"). Mining operations will use large-scale mining equipment including 20 cm diameter blast hole drills, 29 m3 hydraulic shovel, 22 m3 front end loader, and 194 tonne capacity haul trucks. Supplier-sourced capital costs from October 2023 are used in the mine fleet cost calculations.

The mine is divided into two zones, the higher-grade North Zone, which is the initial focus of mine development, and the lower- grade South Zone, which requires pre-stripping ahead of mine development. The North Zone pit is approximately 1,850 m long (N-S) and 1,000 m wide (E-W) with a depth of 680 m and the South Zone pit is 2,050 m long and 1,080 m wide with a depth of 780 m.

The mining sequence consists of four phases. The first and second phases define the North Pit, and the successive two phases define the South Pit.

The Project has an operational LOM of 22.1 years, which includes two years of pre-stripping. The pit constrained resource contains 388 million tonnes of indicated and 460 million tonnes of inferred resource and 983.6 million tonnes of waste is removed, resulting in a strip ratio of 1.16 over the life of the mine.

Mining operations will be carried out on a 24-hour per day, 365 days per year schedule. Milling will start at 60 kt/d in the first year of production, expanding to 120 kt/d in the second year.

Mill feed tonnages and corresponding resource classification are shown in Figures 2 and 3.

7

MINERAL PROPERTIES (cont'd…)

Santo Tomas Project, Sinaloa State, Mexico (cont'd…)

Figure 2:Preliminary Economic Assessment Mine Plan and Schedule

(kt)	120,000			0.50
100,000			0.45
		0.40
Material Movement
			Metal Grade (%)
80,000			0.35
		0.30
60,000			0.25
40,000			0.20
		0.15
			0.10
Total	20,000
		0.05
-			-
	Mine to Mill	Stockpile to Mill	Mine to Stockpile	Mine to Waste Dump
	Processing capacity	CuEq %	Cu%

Figure 3:Classification of Material for Processing

	Total Material Mined for Mill Feed by Classification
	50,000
(kt)	40,000
Movement	30,000
20,000
Material
10,000
	-
	Indicated	Inferred

Process Design & Plant Infrastructure

The Q2 2022 metallurgical test work program demonstrated the ability to produce a marketable copper concentrate using a conventional flotation process flowsheet. Levels of molybdenum in bulk concentrates were sufficient to produce a marketable molybdenum concentrate using conventional Cu-Mo separation flotation techniques. For purposes of the PEA, logarithmic regression analysis was performed on the flotation test work results to develop metallurgical process recoveries as a function of head grade. Based on these formulas, Ausenco forecasts the following mean recoveries for copper, molybdenum, silver, and gold at 83.3%, 59.2%, 53.9%, and 53.2%, respectively. Results from comminution test work on nine variability samples returned elevated hardness properties for some of the mineralized materials (e.g. Axb & ball mill work index of 30 and 18.3 kWh/tonne, respectively). Given these measurements and high throughputs, High Pressure Grinding Rolls ("HPGR") crushing was considered over conventional SAG milling. Figure 4 illustrates the simplified overall process flowsheet developed for the Project.

8

MINERAL PROPERTIES (cont'd…)

Santo Tomas Project, Sinaloa State, Mexico (cont'd…)

Figure 4:Simplified Process Flowsheet

The primary crusher is located at the north-east end of the South Pit (see Figure 5). Coarse crushed material is transported to a stockpile facility to the west of the process plant via an overland conveyor. An alternative to this design would involve the construction of conveyance tunnels and in-pit crushers in both the North and South pits feeding the stockpile. Material from the primary crusher is further reduced in size via secondary crushing and HPGR before feeding into twin ball mills. Ground material at a sizing of 80% passing 150 µm then advances to the flotation circuit to produce a bulk rougher product that is subsequently reground to 23 µm P80 prior to cleaner circuit upgrading. The bulk cleaner concentrate advances to copper- molybdenum separation to recover a molybdenum concentrate. Gold and silver report to the copper concentrate. The tailings are thickened and pumped to the tailings storage facility ("TSF"). Copper and molybdenum concentrates are dewatered prior to shipment.

Concentrates are trucked using the sealed containerized method to the Port of Topolobampo situated on the Gulf of California for transport to overseas smelters. The containerized method removes the capital expense of a concentrate storage facility at the port and loss of concentrate to the environment. The proximity of rail infrastructure to the Project could offer an alternative mode of concentrate transport.

Some infrastructure design includes expansion capacity design features (e.g. overland conveyor, powerline and water supply) during the initial phase so as to not interfere with production during the expansion phase.

9

MINERAL PROPERTIES (cont'd…)

Santo Tomas Project, Sinaloa State, Mexico (cont'd…)

Figure 5:Mine Infrastructure, Pits, Process Plant Layout, Tailings and Waste Rock Storage Facilities

Tailings and Waste Rock Storage Facilities

Both the waste-rock storage facility ("WRSF") and the TSF are designed in accordance with national and international standards and constructed in valleys west and east of the resource, respectively (see Figure 5). The TSF has a rock fill with upstream composite liner system for a starter embankment that transitions to a cycloned sand centerline dam for the LOM with a seepage collection system in the downstream foundation. Ditches and berms have been designed to capture non-contact water above the facility and divert it around to reduce water management in the TSF. The WRSF will be constructed from the bottom up in thick lifts and contact water from the facility will be captured with a water treatment facility at the toe of the facility prior to release. Ditches and berms direct non-contact water above the facility and divert it around.

Power Infrastructure and Water Supply

Electrical supply is either from the Huites hydroelectric plant down-stream from the Project or via built for purpose combined cycle gas turbine plant tentatively located close to the Huites power station and the Texas-Sinaloa natural gas pipeline. Both options represent low carbon footprint power sources for the estimated power requirements at similar costs. A 230-kVA power line trace from Huites Station to the Project has been laid out and costed, as has the main mine access route.

A make-up process water supply source is from wells located within 25 km of the Project and follow a gravel valley well source configuration similar to that employed during mine operations at the El Sauzal Mine site located 45km upstream of the Project and the historic Reforma Mine located 7 km to the north.

Geology and Mineralization

Porphyry Cu (Mo‐Au‐Ag) mineralization on the Santo Tomas property is closely associated with intrusives linked to the Late Cretaceous to Paleocene (90 to 40 Ma) Laramide orogeny. Santo Tomas and most of the known porphyry copper deposits in

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