Palamina : June 30, 2022 Management's Discussion and Analysis

PALAMINA CORP.

MANAGEMENT DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2022

This Management Discussion and Analysis ("MD&A") reviews the financial condition and results of operations of Palamina Corp. ("Palamina" or the "Company") for the six month period ended June 30, 2022. The MD&A was prepared as of August 25, 2022 and should be read in conjunction with the unaudited interim consolidated financial statements for the six month periods ended June 30, 2022 and 2021, including the notes thereto and the audited consolidated financial statements for the years ended December 31, 2021 and 2020 and the notes thereto. All figures are in Canadian dollars unless stated otherwise. Additional information relevant to the Companies activities, including the Company's audited consolidated financial statements can be found on SEDAR at www.sedar.com.

All statements, other than of historical fact included herein, including without limitation, statements regarding potential mineralization, reserves and exploration results and future plans and objectives of the Company are forward looking statements and involve various risks and uncertainties, which are detailed in the Section "Risk Factors" of this MD&A. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements.

OVERVIEW

Palamina Corp. ("Palamina" or the "Company") is an exploration stage company focused on the exploration for economic mineral deposits in Peru through its wholly owned subsidiary, Palamina SAC ("Palamina Peru"), and to a lesser extent in Mexico through its wholly owned subsidiary, Palamina S.A. de C.V. ("Palamina Mexico"). Palamina was incorporated on April 23, 2015 under the Business Corporations Act (Ontario). The Company's head office is located at 145 King Street West, Suite 2870 Toronto, ON M5H 1J8. Palamina is a reporting issuer pursuant to the securities laws of Ontario, British Columbia, Alberta, and Saskatchewan and is listed on the TSX Venture Exchange under the symbol PA.

Management's strategy for building Palamina into a profitable resource company and maximizing shareholder value is to acquire and explore properties with the potential to host significant economic deposits within prolific mining districts in Peru. The Company explores primarily for gold and silver, with the objective of enhancing the value of its properties either by direct exploration or through joint ventures to third parties. This strategy diversifies the business risks inherent in developing a single property.

Going Concern Uncertainty

The Company is at an early stage of development and, as is common with many exploration companies, it relies on financings to fund its exploration and acquisition activities. The Company had a surplus of current assets over current liabilities of $710,649 at June 30, 2022; had not yet achieved profitable operations; had accumulated losses of $13,863,102 at June 30, 2022; and expects to incur further losses in the development of its business. Palamina does not have adequate cash resources to fund its operations over the next twelve months and will require additional financing in order to conduct its planned work programs on its mineral properties, meet its ongoing levels of corporate overhead and discharge its liabilities as they come due. There can be no certainty as to the ability of the Company to raise sufficient additional financing in order to continue to operate, and accordingly, there is a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern.

Palamina Corp.

Management Discussion & Analysis

Six Month Period Ended June 30, 2022

COVID-19

At the end of 2019, a novel strain of coronavirus ("COVID-19") was reported in China. The COVID-19 outbreak has developed rapidly in 2020, with a significant number of infections around the world. On March 11, 2020, it was labelled a pandemic by the World Health Organization. During 2020 and 2021, attempts at containment of COVID-19 have resulted in decreased economic activity, which has adversely affected the broader global economy. The rapid development and fluidity of the situation precludes any prediction as to the ultimate impact of COVID-19; however, the Company seeks the best possible information to enable the assessment of the risks involved to implement appropriate measures to respond. During the year ended December 31, 2021, the Company has implemented a COVID-19 policy drawing on industry specific guidelines set out by federal and provincial governments and works in conjunction with its local health authority to safeguard the health of its employees and the local communities where it operates. The Company has not been materially impacted by the presence of COVID-19.

CORPORATE HIGHLIGHTS

• On August 23 of 2022 Winshear Gold Corp. closed an oversubscribed $652,300 private placement. Palamina subscribed for 1,550,000 Units for a total holding of 13,422,000 shares and 1,321,000 warrants to maintain its 19.9% partially diluted share position in the Company.
• In February of 2022 Palamina added J. Blackwell (P. Geo.), as a geological consultant and Renzo Ceccarelli Lombardi (MScF.) as an environmental and social management consultant.
• On November 12, 2021 Palamina common shares started trading on the OTCQB Venture Market under the symbol "PLMNF" in the United States and continue to trade on the TSX Venture Exchange as its primary listing under the symbol "PA" in Canada.
• On September 15, 2021 Palamina converted debt in Winshear Gold Corp. to increase its equity ownership to 19.5% of the issued and outstanding common shares of Winshear. Subsequent to quarter end, Palamina purchased an additional 255,000 shares of Winshear privately to increase its equity interest to 19.9%.
• On July 20, 2021 Palamina announced it has engaged T2W Market Liquidity Inc. ("T2W") effective July 19, 2021, to provide market liquidity services for its common shares listed on the TSX Venture Exchange.
• On July 16, 2021 Palamina approved 1,790,000 incentive stock options to officers, directors and consultants of the Company. The Stock Options have an exercise price of $0.33 per share.
• On July 15, 2021 Winshear Gold Corp. filed a memorial claim of C$124,781,945 against Tanzania for the expropriation of Winshear Tanzania's retention licences which formerly covered the SMP Gold Deposit area in SW Tanzania. Winshear is fully funded in its arbitration case against Tanzania. Palamina currently holds a 19.94% equity interest in Winshear Gold.
• On June 18, 2021 Palamina completed an oversubscribed non-brokered private placement for gross proceeds of $5,000,000 A total of 20,000,000 units were purchased at $0.25 per unit. GoldSpot Discoveries Corp., a publicly listed artificial-intelligence focused technology and investment company and Eric Sprott, participated in the financing for 3% and 12% respectively.
• On June 10, 2021 Palamina entered into a services agreement with Goldspot Discoveries Corp. ("Goldspot"). The service agreement provides for a pre-payment of $350,000 for strategic technical services to be provided by Goldspot to Palamina over a 12 month period.

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Palamina Corp.

Management Discussion & Analysis

Six Month Period Ended June 30, 2022

OPERATIONAL HIGHLIGHTS

• In August of 2022, drone surveying and reconnaissance sampling and mapping programs were carried out at the Inca Gold, Cristel Gold and Panorama Gold projects.
• In July, August of 2022 mapping / sampling programs were carried out on the Usicayos Gold and Galena Silver Copper Projects
• On July 26, 2022 Palamina announced drill results from 2 diamond drill holes completed in the Veta Zone in May of 2022
• On July 4 & 5, 2022 Palamina Peru acquired two internal titled mineral concessions from two separate owners totaling 130 hectares within the Galena Silver Copper Project securing two historic mine areas
• On June 10, 2022 Palamina Peru acquired an internal claim covering 200 hectares within the Usicayos Gold Project securing 100% of the main mineralized gold trend
• On May 16, 2022 Palamina resumed diamond drilling in the Veta Zone at the Usicayos Gold Project
• On May 3 Palamina staked the Yin and Cristel Gold Projects in the Puno Orogenic Gold Belt
• In March of 2022 Palamina staked an additional 2,400 hectares at its Galena Silver Copper Project (formerly known as the Lagos Project) based on recommendations from Goldspot Discoveries. Palamina also initiated a mapping and sampling program in the Gris and Santa Rosa Zones at Galena.
• In February of 2022 Palamina contracted Geades Consulting SAC to complete an FTA (Ficha Tecnica Ambiental or "Environmental Permit") at the Galena Silver Copper Project (formerly know as the Lagos Project) to allow up to 40 drill holes from 20 drill platforms.
• On February 9, 2021 Palamina announced resumption of exploration at its 100% owned Galena Silver Copper Project (formerly known as the Lagos Project) to include completion of a mapping / sampling program, test Induced Polarization (IP) and magnetometer study.
• On December 16, 2021 Palamina completed its inaugural drill program in the Veta discovery zone at its Usicayos gold project in Peru. A total of 4 holes were drilled over 1,704.5 metres in 2021.
• On September 30, 2021 Palamina commenced its inaugural diamond drill program at its flagship Usicayos Gold Project in Peru.
• On August 2, 2021 MINEM (Ministry of Energy and Mines in Peru) issued Palamina a resolution approving the name change of the Company's flagship project to the Usicayos Project.
• On July 12, 2021 the Company contracted Energold Drilling Peru SAC to conduct a 2,600 m drill program at Usicayos to drill test the Veta Zone.

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Palamina Corp.

Management Discussion & Analysis

Six Month Period Ended June 30, 2022

Qualified Person

Mr. J. Blackwell (P. Geo.), a Qualified Person as defined by National Instrument 43-101, has reviewed the technical information of the property portfolio section of this MD&A regarding exploration advances on the Palamina S.A.C. ("Palamina Peru") mining concessions and applications. Mr. Blackwell is a technical advisor to Palamina. Mr. Blackwell has visited Palamina's primary projects in Peru and reviewed work practices, geological reports and supporting data acquired and produced by Palamina's exploration team and reported in this MD&A.

Mr. Yury Valdivieso, Palamina's lead geologist and project manager in Peru, is responsible for the execution of all exploration programs. Mr. Valdivieso has a MSc. in economic geology and is a member of the Society of Economic Geologists (SEG), the Geological Society of Peru (SGP) and the College of Engineers of Peru (CIP).

PROPERTY PORTFOLIO

Peru Properties

Focus on Puno Orogenic Gold Belt

The Puno Orogenic Gold Belt (POGB) is an auriferous, southeasterly trending metasedimentary-hosted belt located in southern Peru which follows the Andean trend and covers an area of approximately 175 km NW-SE by 75 km NE-SW in the Puno region of Peru. The POGB is a section of a larger 3,400 km long belt of orogenic gold deposits extending from Argentina in the south, through Bolivia and the Puno region, to the Pataz region in northern Peru. The POGB is flanked on the northeast by the gold producing Madre de Dios region in Peru. The belt contains numerous orogenic gold occurrences. Palamina's exploration targets in this region are 'pizarra' or slate-hosted gold systems.

Orogenic gold mineralization in the Puno region occurs in association with regional-scale structures, generally hosted by deformed and folded slates and related metasediments. Palamina is targeting continuous, tabular zones of orogenic gold mineralization within fine-grained, sheared, locally metamorphosed sedimentary rocks. Mineralization may occur in discrete, stacked horizons as bedding- or shear-parallel horizons within the host rock. Gold mineralization typically consists of native gold in distinctive "packages" of fine-grained quartz veins, veinlets and micro-veinlets. Globally, orogenic-type gold deposits are known to extend to vertical depths greater than 1,000 m. Important examples of slate hosted deposits in the POGB in Peru include Ollachea & La Rinconada.

The orogenic gold belt in Puno hosts more than 100 known hard-rockgold-mineralized occurrences and over 50 mining operations are being operated by small and medium-scale artisanal miners. Palamina believes the POGB has considerable potential to contain a compelling number of additional yet undiscovered orogenic gold deposits. Erosion of these gold-bearing structures (by both fluvial and glacial processes) are widely considered to be the source for the extensive alluvial gold deposits located in the low-lying Madre de Dios region of Peru's Amazon basin.

There has been a significant up-grading of road access in the Puno region (example: Pacific-Atlantic

interoceanic highway) and power infrastructure (example: 206 MW San Gaban hydro-electric facility). It is Palamina's belief that these infrastructure developments greatly assist exploration of the POGB and will well support future mine developments in the region.

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Palamina Corp.

Management Discussion & Analysis

Six Month Period Ended June 30, 2022

Airborne Geophysical Survey

Orogenic gold mineralization in the POGB frequently has an association with pyrrhotite (an iron sulphide mineral that is magnetic), associated with swarms of quartz veins and veinlets generally restricted to discrete, continuous packages in regional shear zone structures hosted by fine-grained sedimentary units. In August 2018. New-Sense Geophysics Limited completed an approximate 3,000-line km helicopter- borne magnetic/radiometric geophysical survey over Palamina Peru's Usicayos and Cori gold projects and Winshear Gold's Gaban gold project in the POGB. This geophysical study is being used to assist in identifying drill targets at Usicayos and in locating further shear zones under cover on the Gaban and Cori Projects.

Comparison with other Gold Projects in the Puno Orogenic Gold Belt (POGB):

The Ollachea orogenic gold deposit, located 60 km northwest of Usicayos, reportedly occurs along a structurally deformed east-west trending regional shear structure on the edge of the SE trending POGB. Similarly, 75 km southeast of Usicayos, the large orogenic gold occurrence at La Rinconada also features a significant east-west inflection zone. Midway between Ollachea and La Rinconada, the Usicayos Gold Project also lies along a comparably deformed east-west trending structural jog.

GoldSpot Discoveries Corp. Study of the POGB and Santa Lucia Districts

GoldSpot Discoveries Corp. ("GoldSpot") along with Eric Sprott participated for 15% of Palamina's June 30, 2021 financing. GoldSpot has since been contracted to complete an Artificial Intelligence ("AI") study of the POGB and Santa Lucia districts in order to generate AI target areas with the potential to host significant mineralization based on known data processed through their machine learning technologies. In the first quarter of 2022 GoldSpot presented Palamina with its interim results. The most significant of the AI target areas was subsequently covered by the Company's YIN claim in May 2022.

Usicayos Gold Project

At the Usicayos Gold Project, Palamina has applied for the mineral rights and has title to 14,012 hectares of mineral concessions. The Usicayos Gold Project is located near the town of Usicayos (centrally located along the western periphery of the POGB). The Usicayos concessions extend east and west of the town of Usicayos at elevations ranging from 3,200 to 4,700 m. Rock exposure in the area is generally excellent as the properties sit predominantly above the tree line.

At Usicayos, Palamina has prioritized a 2.4 km mineralized gold trend for drilling consisting of 3 separate gold zones trending southeast to northwest for drilling; Cayos, Veta and Veta NE. Veta was the initial discovery zone followed by the Cayos zone, The Veta NE zone was identified in 2020. In September of 2021 Palamina started its inaugural diamond drill program in the Veta Zone and completed 4 diamond drill holes over a 600 metre strike length before commencement of the rainy season in mid-December 2021. Drilling in the Veta Zone was designed to test multiple mineralized gold structures defined at surface over an 800 metre strike length. In May of 2022 Palamina resumed drilling with two additional drill holes scheduled to test the remaining 200 metres of mineralized strike length to the north east; Drill holes VE-05-22 and hole VE-06-22 were both completed from a fifth drill pad .

The geological make up of the 2.4 km SW-NE mineralized trend is dominated by low grade metamorphosed sequences of fine-grained sedimentary rocks including siltstone and shale with lesser mudstone and fine-grained sandstone units. SW-NE trending domains of intense shearing, folding and faulting of the sedimentary sequences is variably evident throughout area. Individual quartz veins range between millimetric and 40 cm wide. Quartz veins can occur in isolation, sheeted/sub-parallel or as localised stockwork and carry a variable sulphide content of pyrite and minor pyrrhotite. Minor amounts

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