Outcrop Silver & Gold : Annual MD&A ended Aug 31 2021

OUTCROP SILVER & GOLD CORPORATION

(formerly Outcrop Gold Corp.)

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED AUGUST 31, 2021

The following is management's discussion and analysis ("MD&A") of the results of operations and financial conditions of Outcrop Silver & Gold Corporation (formerly Outcrop Gold Corp.) (the "Company", or "Outcrop") and should be read in conjunction with the accompanying consolidated financial statements and related notes thereto for the years ended August 31, 2021 and 2020 (the "Financial Report"), which is available on the SEDAR website at www.sedar.com.

The financial information in this MD&A is derived from the Financial Report prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and with the interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"). All dollar amounts are expressed in Canadian dollars unless otherwise indicated.

Additional information relating to the Company is available on SEDAR at www.sedar.com. The MD&A contains information to December 22, 2021.

Overall Performance

Description of Business and Overview of Projects

Outcrop is an exploration company active in Colombia with an emphasis on generating silver and gold exploration projects with world-class discovery potential.

The highlights of the Company's activities in the year ended August 31, 2021, and up to the date of this MD&A include:

1. The National Mining Agency of Colombia granted new titles comprising 5,046 hectares at the 100% owned Santa Ana high-grade silver project. The Company now holds a total of 5,988 hectares of titles to conduct exploration drilling along the main trend of veins that run from north of the historic Royal Santa Ana Mines southwest 20 kilometres to the Frias Mine.
2. During the current year, the Company discovered seven new vein targets north and south of Santa Ana with samples showing significant gold and silver concentrations up to 64.75 g Au/t and 5,242 g Ag/t in vein and shear outcrop and surface float of eroded vein cobbles.
3. Closed a bought deal offering through a short-form prospectus consisting of 21,401,500 units at a price of $0.43 per unit for gross proceeds of $9,202,645. Each unit consists of one common share and one-half share purchase warrant, each full warrant exercisable into a common share at a price of $0.60 per share until March 26, 2023.
4. Established an at-the-market equity program (the "ATM Program"), which allows the Company to issue and sell, at its discretion, up to $5,000,000 of common shares of the Company to the public from time to time at the prevailing market price when the common shares are issued.
5. Issued a total of 1,024,320 common shares following the exercise of share purchase warrants for gross proceeds of $259,866.

Outcrop Silver & Gold Corporation (formerly Outcrop Gold Corp.)

Management Discussion and Analysis

For the year ended August 31, 2021

1. Issued a total of 2,525,000 common shares following the exercise of stock options for gross proceeds of $257,750.
2. Commenced trading on the OTCQX stock exchange under the ticker symbol "OCGSF".

Colombia Update

Santa Ana Project

The 100% owned Santa Ana project comprises over 36,000 hectares located in the Municipality of Falan, Tolima Department, Colombia, approximately 15 kilometres southeast of the town of Mariquita and 190 kilometres from Bogota, Colombia's capital city. The Santa Ana Project consists of five regional parallel scale vein systems across a trend 12 kilometres wide and 30 kilometres long, and covers a significant part of the Mariquita District, the highest-grade primary silver district in Colombia, where mining records date back to at least 1585. Under colonial Spanish era control of the mines, silver grades were reported to be among the highest in Latin America with the fourteen mines of Santa Ana producing average smelter returns of 4,300 g Ag/t from veins averaging 1.4 metres wide. These colonial mines are on property controlled by Outcrop.

Historic mining depths, structural controls, host rocks and vein textures support a geologic and exploration model for a composite mesothermal and epithermal vein system having mineralization that likely extends to great depth. At Santa Ana it is unlikely that there is sharp elevation restriction common to high-grade zones in many epithermal systems with no mesozonal component.

At the core Royal Santa Ana project, located at the northern extent of just one of the regional vein systems controlled by Outcrop, seven high grade shoots have been discovered - La Ivana hanging-wall and footwall (La Porfia vein system); San Antonio, Roberto Tovar, San Juan (Royal Santa Ana vein systems); El Dorado (El Dorado and El Paraiso vein systems) and Megapozo (El Paraiso vein system). Each zone commonly contains multiple parallel veins. The veins can show both high-grade silver and high-grade gold mineralization and may be both low and high angle depending on local controls. Drilling indicates that mineralization extends from surface or near surface to depths of at least 300 to 450 metres.

Outcrop currently has two drill rigs mobilized on the Santa Ana project and has obtained promising results from targets showing seven high-grade shoot discoveries to date. Drill results indicate that each of the seven discovered shoots are exceptional in size for structural dilation, pinch and swell epithermal vein systems, each measuring greater than 250 metres in surface trace and over 250 metres down-dip, and that all shoots are open in one or more directions along their surface trace and all are open at depth. It is expected that deeper drilling of each shoot will significantly increase its current size.

A total of 183 holes have been drilled on Santa Ana for a total of 29,510 metres. La Ivana has delineation spacing of drill-holes. Outcrop has completed the first three phases of its drilling program at Santa Ana and has announced the commencement of another 18,000 metre phase four drill program on the project. Phase four will test a pipeline of greenfield targets identified through systematic target review and ranking. The greenfield targets are well advanced and drill testing can begin in early 2022. Ground and airborne geophysical surveys have been completed to identify vein structures to follow up with surface exploration. The geophysical survey footprint covers four historic mine areas. Geophysical anomalies that have the character as known mine areas will be prioritized for follow-up with prospecting and mapping

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Outcrop Silver & Gold Corporation (formerly Outcrop Gold Corp.)

Management Discussion and Analysis

For the year ended August 31, 2021

Antares Project

Outcrop Gold acquired the Antares Project in 2015 as a result of a grass-roots exploration program using the Gramalote deposit as an exploration model. Antares displays numerous large, historic hydraulically mined excavation of bulk mineralized weathered granite. These excavations align within a northeast- trending structural zone up to hundreds of metres wide. Large excavations of bulk mineralized granite are seen at both Antares and on the Gramalote Project 30 kilometres to the northeast of Antares. Outcrop Gold made four applications on its own and then subsequently signed a Lease Agreement with Activos Mineros de Colombia S.A.S. to acquire six additional applications contiguous to Outcrop's applications. The combined project area covers 10,500 hectares.

In 2017 and 2018, joint venture partner IAMGOLD conducted surface exploration work on the project. Their work produced a large and significant gold in soils anomaly over four kilometres long that provides a drill-ready target. Importantly, in early 2018, AngloGold Ashanti Limited ("AngloGold"; NYSE: AU) received all operating permits for the Gramalote open pit gold mine. Antares has less environmental and social sensitivities than Gramalote.

Argelia Project

The Argelia Project are mining applications that provide a target for multiple intermediate sulfidation epithermal veins within a structural corridor that extends at least 2.5 kilometres by 2.5 kilometres. At least eight distinct veins are inferred but working suggests more veins remain to be identified. The veins typically range from 0.25 to 3.5 metres in width. Reconnaissance samples range from 0.51 g Au/t to 40 g Au/t. Silver to gold ratio is approximately 5 to 1 or higher.

Public records show that a private British mining company mined and produced gold on the project prior to 1950. The workings presumed to represent this activity have two levels spaced approximately 100 metres apart in elevation. The upper level shows assays of 22.5 g AU/t over a 3.5 metre wide vein. The lower level shows 20 g Au/t over a two-metre-wide vein. The strongly mineralized veins on two levels probably reflect a continuous high-grade shoot providing an immediate drill target.

Oribella Project

Oribella adjoins Orosur Mining Inc.'s ("Orosur"; TSX/AIM: OMI) Anza Project, which contains the APTA vein deposit and the Charrascala porphyry-epithermal anomalies. Orosur recently reported drill results from the APTA vein including 59.55 metres of 9.61 g Au/t (source: Orosur press release dated July 6, 2021). Oribella also extends to within three kilometres of Royal Road's Nuevo Guintar Project where epithermal mineralization is reported in two drill-holes (source: AngloGold Q3-2017, "Exploration Update").

Anza is currently operated as a joint venture between Agnico Eagle Mines Ltd., Newmont Gold Mining Company and Orosur.

The APTA structures are inferred to project onto Oribella. The Oribella mineral system appears to include epithermal veins and replacements superposed on a large breccia and basalt hosted "wall-rock" gold and copper porphyry system. The projects surrounding Oribella appear to also include epithermal and porphyry-style mineralization.

Mallama Project

The Mallama Project is part of a large district that contains more than 30 mapped intermediate sulfidation epithermal veins with strike lengths of over four kilometres. In 1984, the Japanese International Cooperation Agency ("JICA") mapped, sampled, and drilled a portion of the larger vein system, of which

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Outcrop Silver & Gold Corporation (formerly Outcrop Gold Corp.)

Management Discussion and Analysis

For the year ended August 31, 2021

the Mallama Project covers a part. The El Diamante Mine is just north of Outcrop's Mallama Project and has been active for more than 30 years. The gold at El Diamante, in particular, is associated with pyrite and quartz and secondarily with sphalerite, and galena. The Diamante Mine veins and Mallama property veins share similar characteristics and Diamante is probably part of the larger Mallama vein system.

Historic sampling presented by the owners of the titles on the Mallama Project shows vein grades ranging from 33 g Au/t to 87 g Au/t with silver occurring on an average ratio of 10 to 1 silver to gold. Limited confirmation sampling assays by Outcrop geologists shows 42 g Au/t over 0.5 metres in an active artisan mine that displays numerous parallel veins.

Preliminary work by Outcrop shows significant mineralization in the Bombona Zone where systematic sampling in an area of sublevel production shows 15 samples with a weighted average grade of 23.2 g Au/t and 182.3 g Ag/t over an average of 0.69 metre vein width. Soil sampling conducted by JICA shows that the Bombona Zone correlates well with gold anomalies in soils, and eight or more parallel veins can be inferred adjacent the Bombona vein. Aligned artisanal workings suggest the Bombona Zone extends for up to four kilometres in length. Outcrop has done sufficient underground sampling in the Bombona Zone within Mallama to indicate artisan mines are producing at in-situ grades of 22 g Au/t with silver at an approximate 4 to 1 ratio. The Bombona Zone consists of a package of seven or more parallel veins of approximately one metre width, and local informal miners have workings on at least three veins. The Bombona Zone displays production portals on at least three separate veins. The historic mine workings extend within a zone over two kilometres long and drill-ready targets are provided.

Outcrop has initiated a Consulta Previa, an administrative requirement, to consult with indigenous peoples with traditional households on mining concessions, including those that make up Mallama. A portion of the project must also be subtracted from the forestry reserve. Outcrop has initiated joint meetings with the indigenous leaders and informal miners in the Bombona Zone to pursue social license to work on Mallama.

Qualified Person

The data disclosed in this MD&A has been reviewed and verified by Joseph Hebert, B.S.Geo. C.P.G., a Qualified Person as defined by National Instrument 43-101.

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Outcrop Silver & Gold Corporation (formerly Outcrop Gold Corp.)

Management Discussion and Analysis

For the year ended August 31, 2021

Results of Operations

For the years ended August 31, 2021 and 2020.

Significant or noteworthy expenditure differences between the years include:

		Year ended August 31,
		2021		2020
Loss for the year	$	(12,846,505)	$	(5,025,226)
Comprehensive loss for the year	$	(12,848,836)	$	(4,912,557)
Expenses for the year	$	(12,825,905)	$	(4,444,315)
Exploration and evaluation		7,742,535		2,111,000
	Increase due to escalation in exploration activity in Colombia at Santa Ana
	with the addition of a second drill rig on the project during the current year.
General and administrative		779,982		472,483
	Increase due primarily to current year escalation of administrative costs in
	line with the escalation in exploration activity in Colombia at Santa Ana.
Investor Relations		975,509		385,215
	Increase due primarily to current year escalation of marketing costs in new
	global investor markets and digital advertising.
Stock-based compensation		2,421,722		618,813

Increase due primarily to escalation of the Company's stock price, resulting in higher valuation and expense of the options granted in 2021 compared to the prior year.

Exploration expenditure details for the years ended August 31, 2021 and 2020.

During the year ended August 31, 2021, the Company was focused on the Santa Ana Project where it increased its drilling efforts through the addition of a second drill rig and increased staffing for its community outreach programs at the project site. During the year ended August 31, 2020 the Company was more focused on the Cauca Project and performing exploratory technical work on the site as well as due diligence associated with the Santa Ana Project and post-acquisition began to focus more efforts on Santa Ana.

Year ended August 31, 2021		Santa Ana		Other		Total
Drilling	$	3,533,461	$	-	$	3,533,461
Payroll		1,351,336		199,294		1,550,630
Field Expenses and other		1,698,396		177,225		1,815,621
Technical consulting		817,802		25,021		842,823
Total	$	7,400,995	$	341,540	$	7,742,535

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