Patagonia Gold : MD&A for the Year Ended December 31 2023

PATAGONIA GOLD CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the year ended December 31, 2023

April 26, 2024

The following management's discussion and analysis ("MD&A") of Patagonia Gold Corp. (hereinafter referred to as the "Company" or "Patagonia"), formerly Hunt Mining Corp. ("Hunt") and its subsidiaries provides an analysis of the operating and financial results for the year ended December 31, 2023 and a comparison of the material changes in our results of operations and financial condition between the year ended December 31, 2022. This MD&A should be read in conjunction with the Corporation's annual audited consolidated financial statements for the year ended December 31, 2023.

These statements have been prepared in accordance with IFRS Accounting Standards ("IFRS Accounting Standards") as issued by the International Accounting Standards Board ("IASB"). This MD&A includes certain non-IFRS financial performance measures. For a detailed description of these measures, please see "Non-IFRS Financial Performance Measures" section. The amounts presented in this MD&A are in thousands ($'000) of U.S. dollars, except share, per share, per unit amounts and unless otherwise noted.

The Company's head office and principal business address is Av. Libertador 498 Piso 26, Buenos Aires, Argentina, C1001ABR and the registered office address is 2200 HSBC Building, 885 West Georgia Street, Vancouver, British Columbia, V6C 3E8. The Company's common shares trade on the TSX Venture Exchange (the "Exchange"), under the symbol PGDC. Additional information relevant to the Company's activities can be found on their website at http://patagoniagold.com, on SEDAR at www.sedarplus.ca.

Management's Responsibility for Financial Reporting

The financial statements have been prepared by management in accordance with IFRS Accounting Standards and have been approved by the Company's board of directors (the "Board"). The integrity and objectivity of the financial statements are the responsibility of management. In addition, management is responsible for ensuring that the information contained in the MD&A is consistent where appropriate, with the information contained in the financial statements.

The financial statements may contain certain amounts based on estimates and judgments. Management has determined such amounts on a reasonable basis to ensure that the financial statements are presented fairly in all material respects.

As the Company is a Venture Issuer (as defined under under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings) ("NI 52-109"),the Company and management are not required to include representations relating to the evaluation, design, establishment and/or maintenance of disclosure controls and procedures ("DC&P") and/or Internal Controls over Financial Reporting ("ICFR"), as defined in NI 52-109,nor has it completed such an evaluation. Inherent limitations on the ability of the certifying officers to design and implement on a cost-effectivebasis DC&P and ICFR for the issuer may result in additional risks of quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

Cautionary Note on Forward-Looking Information

This MD&A contains "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws of Canada (collectively referred to as "forward-looking information") which relate to future events or the Company's future performance and may include, but are not limited to, statements about strategic plans, spending commitments, future operations, results of exploration, anticipated financial results, future work programs, capital expenditures and expected working capital requirements. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "continues", "forecasts", "projects", "predicts", "intends", "anticipates" or "believes", or variations of, or the negatives of, such words and phrases, or state that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved.

Readers are cautioned not to place undue reliance on forward looking information and there can be no assurance that forward looking information will prove to be accurate as the Company's actual results, performance or achievements may differ materially from any future results, performance or achievements expressed or implied by such forward-looking information if known or unknown risks, uncertainties or other factors affect the Company's business, or if the Company's estimates or assumptions prove inaccurate. Therefore, the Company cannot provide any assurance that forward-looking information will materialize. Factors that could cause results or events to differ materially from current expectations expressed or implied by the forward-looking information, include, but are not limited to:

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fluctuations in the currency markets (such as the Canadian Dollar, Chilean Peso, Great Britain Pound and the United States Dollar); changes in national and local government, legislation, taxation, controls, regulations and political or economic developments in Canada and Argentina or other countries in which the Company may carry on business in the future; operating or technical difficulties in connection with exploration and development activities; risks and hazards associated with the business of mineral exploration and development (including environmental hazards or industrial accidents); risks relating to the credit worthiness or financial condition of suppliers and other parties with whom the Company does business; the presence of laws and regulations that may impose restrictions on mining, including those currently enacted in Argentina; employee relations; relationships with and claims by local communities; availability and increasing costs associated with operational inputs and labour; the speculative nature of mineral exploration and development, including the risks of obtaining necessary licenses, permits and approvals from government authorities; business opportunities that may be presented to, or pursued by, the Company; challenges to, or difficulty in maintaining, the Company's title to properties; risks relating to the Company's ability to raise funds; and the factors identified under "Risk Factors" in this MD&A.

The forward looking information contained in this MD&A are based upon assumptions management believes to be reasonable including, without limitation: financing will be available for future exploration, development and operating activities; the actual results of the Company's development and exploration activities will be favorable or at least consistent with management's expectations; operating, development and exploration costs will not exceed management's expectations; all requisite regulatory and governmental approvals for development projects and other operations will be received on a timely basis upon terms acceptable to the Company, and applicable political and economic conditions will be favorable to the Company such as the continuing support for mining by local governments in Argentina; the price of gold and/or other applicable metals and applicable interest and exchange rates will be favorable to the Company or at least consistent with management's expectations; no title disputes will exist with respect to the Company's properties; debt and equity markets and other applicable economic conditions will be favorable to the Company; the availability of equipment and qualified personnel to advance exploration projects and; the execution of the Company's existing plans and further exploration and development programs for its projects, which may change due to changes in the views of the Company or if new information arises which makes it prudent to change such plans or programs.

All forward-looking-information contained in this MD&A is given as of the date hereof and is based upon the opinions and estimates of management and information available to management as at the date hereof. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

The Company

On July 24, 2019, the Company and Patagonia Gold Limited ("PGL") [formerly Patagonia Gold PLC ("PGP")] completed a reverse acquisition (or reverse takeover, the "RTO") resulting in Hunt acquiring all issued shares of common stock of PGP in exchange for common shares of Hunt on the basis of 10.76 Hunt shares for each PGP share. Hunt issued 254,355,192 common shares to the shareholders of PGP representing an ownership interest of approximately 80%. The operating name of Hunt Mining Corp. was changed to Patagonia Gold Corp.

Patagonia is a mineral exploration and production Company incorporated on January 10, 2006 under the laws of Alberta, Canada and, together with its subsidiaries, is engaged in the exploration of mineral properties and exploitation of mineral resources and mineral reserves in the Santa Cruz, Rio Negro and Chubut Provinces of Argentina.

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The financial statements are presented on a consolidated basis and include the accounts of the Company, its wholly owned and majority owned subsidiary:

		Percentage	Functional
Corporation	Incorporation	ownership	currency	Business purpose
Patagonia Gold S.A. ("PGSA")	Argentina	95	US$	Production and Exploration Stage
Minera Minamalu S.A.	Argentina	100	US$	Exploration Stage
Huemules S.A.	Argentina	100	US$	Exploration Stage
Leleque Exploración S.A.	Argentina	100	US$	Exploration Stage
Patagonia Gold Limited (formerly
Patagonia Gold PLC)	UK	100	GBP$	Holding
Minera Calcatreu S.A.U. (formerly
Minera Aquiline S.A.U.)	Argentina	100	US$	Exploration Stage
Patagonia Gold Canada Inc.	Canada	100	CAD$	Holding
Patagonia Gold Chile S.C.M.	Chile	100	CH$	Exploration Stage
Ganadera Patagonia S.R.L.	Argentina	100	US$	Land Holding
1272680 B.C. Ltd (formerly 1494716
Alberta Ltd.)	Canada	100	CAD$	Nominee Shareholder

The Company's activities include the exploration for and production of minerals from properties in Argentina. On the basis of information to date, properties where it has not yet been determined if economically recoverable reserves exist are classified as exploration-stage. Properties where economically recoverable reserves exist and are being exploited are classified as production-stage. The underlying value of the mineral properties is entirely dependent upon the existence of reserves, the ability of the Company to obtain the necessary financing to complete development and upon future profitable production or a sale of these properties.

On some properties, ongoing production and sales of gold and silver are being undertaken without established mineral resources or reserves and the Company has not established the economic viability of the operations. As a result, there is increased uncertainty and economic risks of failure associated with these production activities. Despite the sale of gold and silver, these projects remain in the exploration stage because management has not established proven or probable reserves required to be classified in either the development or production stage.

Summary of Consolidated Results of Operations

(in $000's, except ounces and per share		Three months ended December 31,				Year ended December 31,
	2023		2022		Change	%Change		2023		2022		Change	%Change
amounts)
Operational results
Total gold equivalent ounces - produced (1)		946		1,402		(456)	(33%)		4,498		6,490		(1,992)	(31%)
Total gold equivalent ounces - sold (1)		775		1,149		(374)	(33%)		4,290		6,782		(2,492)	(37%)
Financial results
Revenue	$	1,473	$	1,992	$	(519)	(26%)	$	8,220	$	12,340	$	(4,120)	(33%)
Cost of sales	$	1,292	$	3,090	$	(1,798)	(58%)	$	9,902	$	14,635	$	(4,733)	(32%)
Exploration expenses	$	459	$	997	$	(538)	(54%)	$	3,737	$	5,374	$	(1,637)	(30%)
Repair and maintenance	$	195	$	161	$	34	21%	$	724	$	513	$	211	41%
Depreciation, depletion and amortization	$	129	$	161	$	(32)	(20%)	$	498	$	1,899	$	(1,401)	(74%)
Administrative expenses	$	1,088	$	1,757	$	(669)	(38%)	$	4,867	$	5,491	$	(624)	(11%)
Interest expense	$	770	$	970	$	(200)	(21%)	$	2,788	$	3,395	$	(607)	(18%)
Other Income	$	647	$	5,557	$	(4,910)	(88%)	$	5,356	$	10,709	$	(5,353)	(50%)
Net income (loss)	$	1,476	$	1,274	$	202	(16%)	$	(6,407)	$	(4,328)	$	(2,079)	(48%)
Net income (loss) per share - basic and diluted	$	0.003	$	0.003	$	-	0%	$	(0.014)	$	(0.009)	$	(0.005)	(56%)

1. Gold equivalent ounces include silver ounces produced and sold converted to a gold equivalent based on a ratio of the average spot market price for the commodities each period. The ratio for three months ended December 31, 2023 was 85.68:1 (2022 - 81.13:1). The ratio for year ended December 31, 2023 was 82.45:1 (2022 - 82.41:1).
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Three months ended December 31, 2023 and 2022

Total production decreased during the three months ended December 31, 2023 as the Company had residual heap leach operations at Lomada de Leiva ("Lomada") and Cap-Oeste since February 2019, which has been declining due to the depletion in the pads from ongoing leaching. Additional material being placed on the pads has not offset the overall declining production quarter over quarter. Sources for new fresh material to increase the production are being sought.

The Company earned total revenue of $1,473 during the three months ended December 31, 2023 compared to $1,992 during the same period in 2022. Revenue decreased due to the lower gold equivalent ounces produced and sold during the period compared to the same period in 2022.

Cost of sales were $1,292 during the three months ended December 31, 2023 compared to $3,090 during the same period in 2022. Cost of sales decreased due to overall decrease in gold equivalent ounces produced and sold. Also, the three months ended December 31, 2022 included an inventory write down of $287 under cost of sales due to the net realizable value of the inventory was less than the costs incurred in establishing the gold held on carbon.

The Company incurred exploration expenses of $459 during the three months ended December 31, 2023 compared to $997 during the same period in 2022. The decrease in exploration expenses is related to overall less exploration activities for period compared to prior period.

The Company incurred repair and maintenance expense of $195 during the three months ended December 31, 2022 compared to $161 during the same period in 2022. The repair and maintenance expense during the period related to routine maintenance work at the Mina Martha Plant.

The Company incurred depreciation, depletion and amortization expenses of $129 during the three months ended December 31, 2023 compared to $161 during the same period in 2022. The decrease in depreciation, depletion and amortization expenses was due to the decrease in production and as a result of the Lomada mineral property being fully depleted in 2022.

The Company incurred administrative expenses of $1,088 during the three months ended December 31, 2023 compared to $1,757 during the same period in 2022. The decrease in administrative expenses was due to lower salaries, professional fees and transaction taxes expense resulting from cost reductions and the devaluation of the Argentinian peso in December 2023.

The Company incurred interest expense of $770 during the three months ended December 31, 2023 compared to $970 during the same period in 2022. The decrease in interest expense was due to repayment of bank indebtedness.

As part of the Company´s treasury management, the Company trades certain securities denominated in US dollar and Argentine Peso. The Company recognized a gain on disposition of these securities of $647 during the three months ended December 31, 2023 compared to $5,557 during the same period in 2022.

Net profit for the three months ended December 31, 2023 was $1,476 compared to net profit of $1,274 during the same period in 2022. Net profit increased for the three months ended December 31, 2023 as a result of lower operating, exploration and administrative expenses and the increase in gain on foreign exchange during the period compared to the same period in 2022. This was partially offset by the decrease in gain on disposition of certain securities compared to the same period in 2022.

Year ended December 31, 2023 and 2022

Total production decreased during the year ended December 31, 2023 as the Company had residual heap leach operations at Lomada de Leiva ("Lomada") and Cap-Oeste since February 2019, which has been declining due to the depletion in the pads from ongoing leaching. Additional material being placed on the pads has not offset the overall declining production quarter over quarter. Sources for new fresh material to increase the production are being sought.

The Company earned total revenue of $8,220 during the year ended December 31, 2023 compared to $12,340 during the same period in 2022. Revenue decreased due to the lower gold equivalent ounces produced and sold during the period compared to the same period in 2022. Also due to the Company suspended production in its gold room during the second quarter due to a robbery. On April 17, 2023, the Company's gold room at its Cap-Oeste Project, located in the Santa Cruz province of Argentina, was the target of a robbery. The thieves gained access to the site and escaped with doré containing approximately 520 ounces of gold equivalent, which represents approximately one month of production from Lomada and Cap-Oeste Projects. The robbery was reported to the appropriate Argentine officials and the Company is working with the authorities to investigate the incident. Production of doré was suspended while the

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Company investigated the incident and determined how to implement additional security measures to reduce the likelihood of such an incident reoccurring in the future. Production was restarted at the beginning of July 2023.

Cost of sales were $9,902 during the year ended December 31, 2023 compared to $14,635 during the same period in 2022. Cost of sales decreased due to overall decrease in gold equivalent ounces produced and sold. Also, during the year ended December 31, 2023, the net realizable value of the inventory was less than the costs incurred in establishing the gold held on carbon and the Company recorded an inventory write down of $1,028 (2022 - $1,475) under cost of sales. This was partially offset due to during the year ended December 31, 2023 the Company recorded a loss of $820 under cost of sales as a result of the robbery in the Company's gold room on April 17, 2023.

The Company incurred exploration expenses of $3,737 during the year ended December 31, 2023 compared to $5,374 during the same period in 2022. The decrease in exploration expenses is related to the overall decrease in exploration activities for the year ended December 31, 2023 compared to the same period in 2022.

The Company incurred repair and maintenance expense of $724 during the year ended December 31, 2023 compared to $513 during the same period in 2022. The repair and maintenance expense during the period related to routine maintenance work at the Mina Martha Plant.

The Company incurred depreciation, depletion and amortization expenses of $498 during the year ended December 31, 2023 compared to $1,899 during the same period in 2022. The decrease in depreciation, depletion and amortization expenses was due to the decrease in production and as a result of the Lomada mineral property being fully depleted in 2022.

The Company incurred administrative expenses of $4,867 during the year ended December 31, 2023 compared to $5,491 during the same period in 2022. The decrease in administrative expenses was due to lower salaries, professional fees and transaction taxes expense resulting from cost reductions and the devaluation of the Argentinian peso in December 2023.

The Company incurred interest expense of $2,788 during the year ended December 31, 2023 compared to $3,395 during the same period in 2022. The decrease in interest expense was due to repayment of bank indebtedness.

As part of the Company´s treasury management, the Company trades certain securities denominated in US dollar and Argentine Peso. The Company recognized a gain on disposition of these securities of $5,356 during the year ended December 31, 2023 compared to $10,709 during the same period in 2022.

The Company recognized a foreign exchange gain of $1,066 during the year ended December 31, 2023 compared to gain of $2,428 during the same period in 2022.

Net loss for the year ended December 31, 2023 was $6,407 compared to $4,328 during the same period in 2022. Net loss increased primarily due to the decrease in revenues, gain on foreign exchange and in gain on disposition of certain securities compared to the same period in 2022. This was partially offset by lower operating, exploration and administrative expenses during the year ended December 2023 compared to the same period in 2022.

Cash flows for the year ended December 31, 2023 and 2022

The Company used $5,738 of cash in operating activities for the year ended December 31, 2023 compared to $5,329 during the same period in 2022. The increase in cash used in operating activities during 2023 was primarily due to lower revenues.

Cash used in investing activities for the year ended December 31, 2023 was $294 compared to $286 for the same period in 2022. The increase in cash used in investing activities was a result of higher purchases of property and equipment.

Cash generated from financing activities for the year ended December 31, 2023 was $5,555 compared to $5,584 during the same period in 2022. The cash used in financing activities during 2023 remained consistent during the year ended December 31, 2023 compared to the same period in 2022.

Financial Position

Cash

The Company has cash on hand of $185 as of December 31, 2023 compared to $231 as of December 31, 2022.

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Receivables

Current receivables are $352 as of December 31, 2023 compared to $2,021 as of December 31, 2022. The decrease in current receivables is a result of a collection of VAT recoverable during the year ended December 31, 2023.

Non-current receivables are $332 as of December 31, 2023 compared to $1,671 as of December 31, 2022. The decrease in non-current receivables is a result of the decrease in VAT recoverable during the year ended December 31, 2023.

Inventories

The Company has inventories of $4,167 as of December 31, 2023 compared to $4,653 as of December 31, 2022. The decrease in inventory was mainly due to lower gold held on carbon as a result of the overall declining production quarter over quarter. During the year ended December 31, 2023, the net realizable value of the inventory was less than the costs incurred in establishing the gold held on carbon and the Company recorded an inventory write down of $1,028 (2022 - $1,475).

Property, plant and equipment ("PPE")

The Company has PPE of $9,416 as of December 31, 2023 compared to $10,644 as of December 31, 2022. The decrease in PPE was a result of the depreciation charge which was partially offset by capital additions.

Bank indebtedness

The Company has bank indebtedness of $538 as of December 31, 2023 compared to $8,945 as of December 31, 2022. The decrease in bank indebtedness was a result paying down the existing lines of credit using the funds received from the loan facility.

Accounts payable and accrued liabilities

The Company has accounts payable and accrued liabilities of $1,689 as of December 31, 2023 compared to $5,953 as of December 31, 2022. The decrease in accounts payable and accrued liabilities was a result of paying down accounts payables and normal fluctuations in operations.

Accounts payable with related parties

The Company has accounts payable with related parties of $164 as of December 31, 2023 compared to $285 as of December 31, 2022. The decrease in accounts payable with related parties was a result of paying down account payable with related parties.

Loan payable and current portion of long-term debt

The Company has loan payable and current portion of long-term debt of $213 as of December 31, 2023 compared to $386 as of December 31, 2022. The decrease in loan payable and current portion of long-term debt is due to repayment of loan payable during the year ended December 31, 2023.

Long term debt

The Company has non-current portion of total long-term debt of $36,259 as of December 31, 2023 compared to $20,019 as of December 31, 2022. The increase in long-term debt is due to increase in the loan facility which was used to pay down the existing line of credit and to fund operations.

Summary of Segmented Results of Operations

Cap-Oeste

Cap-Oeste produced a total of 2,987 gold equivalent ounces (1,901 ounces of gold and 91,098 ounces of silver) during the year ended December 31, 2023 compared to 3,272 gold equivalent ounces (1,862 ounces of gold and 116,286 ounces of silver) during the same period in 2022.

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The cash costs of production for the year ended December 31, 2023 was $2,124 per ounce1 and $2,156 per ounce1 including depreciation and amortization compared to $2,511 per ounce1 and $2,559 per ounce1 during the same period in 2022. The decrease in cash cost of production per ounce was due to decrease in operating cost resulting from the devaluation of the Argentinian peso in December 2023, this was partially offset by higher inflation in Argentina.

A total of 2,880 gold equivalent ounces (1,871 ounces of gold and 83,533 ounces of silver) were sold during the year ended December 31, 2023 at an average gross price of $1,936 per ounce1. During the same period in 2022, a total of 3,504 gold equivalent ounces (2,043 ounces of gold and 120,293 ounces of silver) were sold at an average gross price of $1,815 per ounce1.

Cap-Oeste generated revenues of $5,576 during the year ended December 31, 2023 compared to $6,359 during the same period in 2022. The decrease in revenues was due to lower gold and gold equivalent ounces produced and sold during the year ended December 31, 2023 compared to the same period in 2022.

Cost of sales were $7,670 during the year ended December 31, 2023 compared to $7,272 during the same period in 2022. The increase in cost of sales was due to an increase in production costs owing to higher inflation in Argentina which was partially offset by the devaluation of the Argentinian peso. Cost of sales includes a loss of $575 due to the robbery in the Company's gold room on April 17, 2023. During the year ended December 31, 2023, the net realizable value of the inventory was less than the costs incurred in establishing the gold held on carbon and the Company recorded an inventory write down of $1,028 (2022 - $1,326) under cost of sales.

Depreciation, depletion and amortization expenses of $140 were incurred during the year ended December 31, 2023 compared to $242 during the same period in 2022.

Lomada de Leiva Project ("Lomada")

Lomada produced a total of 1,511 ounces of gold during the year ended December 31, 2023 compared to 3,218 ounces of gold during the same period in 2022. Following receipt of a preliminary permit on October 7, 2020, in November 2020, the Company restarted the mining operation at Lomada which had been previously closed since in February 2019 and started placing new material on the leach pad. The mining operations were put on care and maintenance during 2022 again while leaching of the material previously placed on the leach pad continued. Production will continue declining as a result of no fresh material being added to the pad.

The cash costs of production for the year ended December 31, 2023 was $1,419 per ounce1 and $1,453 per ounce1 including depreciation and amortization compared to $1,913 per ounce1 and $1,953 per ounce1 during the same period in 2022. The decrease in cash costs is due to the decrease in mining costs as a result of putting mining operation on care and maintenance.

A total of 1,410 gold equivalent ounces were sold during the year ended December 31, 2023 at an average gross price of $1,875 per ounce1. During the same period in 2022, 3,278 gold equivalent ounces were sold at an average gross price of $1,825 per ounce1.

Lomada generated revenues of $2,644 during the year ended December 31, 2023 compared to $5,981 during the same period in 2022. The decrease in revenues was due to lower gold and gold equivalent ounces produced and sold during the period.

Cost of sales were $2,232 during the year ended December 31, 2023 compared to $7,363 during the same period in 2022. The decrease in cost of sales was due to the decrease in mining costs as a result of putting mining operation on care and maintenance during 2022. Cost of sales includes a loss of $245 due to the robbery in the Company's gold room on April 17, 2023. Also, during the previous year ended December 31, 2022, the net realizable value of the inventory was less than the costs incurred in establishing the gold held on carbon and the Company recorded an inventory write down of $149 under cost of sales.

Depreciation, depletion and amortization expenses of $Nil were incurred during the year ended December 31, 2023 compared to $1,080 during the same period in 2022. The decrease was as a result of the Lomada mineral property being fully depleted in 2022.

Martha and La Josefina Projects

There was no production at Martha during the year ended December 31, 2023 as the Company did not produce concentrate from Martha after April 2020. Operations at Martha remain on care and maintenance while the Company continues to explore the property.

1 See Non-IFRS Financial Performance Measures

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Exploration expenses of $1,026 were incurred during the year ended December 31, 2023 compared to $1,178 during the same period in 2022.

The Company incurred repair and maintenance expense of $724 during the year ended December 31, 2023 compared to $513 during the same period in 2022. The repair and maintenance during the period related to maintenance work at the Mina Martha plant.

Calcatreu Project

Exploration expenses of $524 were incurred during the year ended December 31, 2023 compared to $1,006 during the same period in 2022. The decrease in exploration expenses was due to less exploration activities performed during the year ended December 31, 2023 compared to the same period in 2022.

Administration expenses of $615 were incurred during the year ended December 31, 2023 compared to $609 during the same period in 2022. The administrative expenses remained consistent during the year ended December 31, 2023 compared to the same period in 2022.

Argentina, Uruguay and Chile

This segment includes the results from the Company's work on the Monte Leon, Tornado and Huracán and other projects in Argentina, the San José Project in Uruguay and general corporate activities. This segment does not generate revenues and includes costs that are not directly related to other mining properties that are reported as separate segments.

Exploration expenses of $2,187 were incurred during the year ended December 31, 2023 compared to $3,190 during the same period in 2022. Exploration expenses decreased as the drilling program in Monte Leon and Tornado y Huracán projects was finished in 2022.

Administration expenses of $3,356 were incurred during the year ended December 31, 2023 compared to $3,899 during the same period in 2022. The decrease in administrative expenses was due to lower salaries, professional fees and transaction taxes expense resulting from cost reductions and the devaluation of the Argentinian peso in December 2023.

Interest expense of $517 was incurred during the year ended December 31, 2023 compared to $2,337 during the same period in 2022. The decrease in interest expense was due to the repayment of bank indebtedness with Argentinian banks.

United Kingdom

This segment includes the results of Patagonia Gold Limited ("PGL") (formerly Patagonia Gold PLC) which is a holding company and does not generate any revenues.

Administration expenses of $65 were incurred during the year ended December 31, 2023 compared to $52 during the same period in 2022. The administrative expenses related to professional fees.

Interest expense of $685 was incurred during the year ended December 31, 2023 compared to $560 during the same period in 2022. The increase in interest expense was due to the increase in the interest rate on the loan facility from 5% to 7.5%.

North America

This segment includes the results of Patagonia Gold Corp ("PGC"), Patagonia Gold Canada Inc and 1272680 B.C. Ltd ("BC"). These entities are holding companies and do not generate any revenues.

Administration expenses of $831 was incurred during the year ended December 31, 2023 compared to $931 during the same period in 2022. Administration expenses consists of accounting and legal fees.

Interest expense of $1,533 was incurred during the year ended December 31, 2023 compared to $456 during the same period in 2022. The increase in interest expense was due to an increase in long-term debt balance and the increase in the interest rate on the loan facility from 5% to 7.5%.

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Mineral Properties

The following is a summary of Patagonia Gold Corporation's ("Patagonia" or the "Company") operations, together with an update on exploration activities for the period to date.

Figure 1. Location of the Company's property groups.

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Calcatreu Property

The Company's Calcatreu property is located in south-central Rio Negro province approximately 80 kilometers ("km") southwest of the town of Jacobacci (Figure 1). Calcatreu is located in the Jurassic-aged, Somuncura Massif along the NW- to SE-oriented, regional- scale Gastre Fault System; a highly prospective belt of Mesozoic-aged rocks, structures and base and precious metal mineral deposits occurring in both the provinces of Chubut and Rio Negro. The massif is similar in geologic character to the larger Deseado Massif in the province of Santa Cruz to the south. Patagonia has also recently acquired new concessions, bringing its holdings to more than 100,000 hectares ("ha") along this belt in Rio Negro Province, bordering Chubut on the north. Calcatreu is a gold and silver property acquired in January 2018 through the acquisition of Minera Aquiline Argentina SA, a subsidiary of Pan American Silver and the Company's immediate aim is to increase the existing mineral resources and advance Calcatreu to a feasibility study stage. Precious metal mineralization in the Somuncura Massif, like that on the Company's Calcatreu property, is largely epithermal in character within quartz-rich veins, vein clusters, stockworks and as disseminations. Sulfide minerals are ubiquitous in the mineral deposits as well as a suite of temporally- and spatially-related gangue minerals typical of epithermal deposits in the massif and elsewhere.

The Calcatreu deposit is a low sulfidation, epithermal gold and silver system with outcropping mineralization. An independent mineral resource estimate ("MRE") was completed by Micon International Limited of Toronto in 2004 for the Calcatreu Deposit and disclosed in an NI 43-101 technical report for Aquiline Resources Inc. Mineral resources were estimated for two vein systems on the property: Veta 49 and Nelson. In 2018, Cube Consulting Ltd. ("CUBE") of Australia prepared an updated MRE mineral resource estimate for Calcatreu, effective December 31, 2018, which consists of an indicated resource of 9.8 M tonnes grading 2.11 g/t Au and 19.83 g/t Ag (2.36 g/t gold equivalent - "AuEq") and 8.1 M tonnes of inferred grading 1.34 g/t Au and 13.09 g/t Ag (1.5 g/t AuEq); all contained within Veta 49, Nelson, Belen and Castro Sur veins. Gold equivalent values were calculated by CUBE using a metal price at a ratio of 81:25:1 Ag/Au. The changes from the previous estimate were due to a revised interpretation of prior and new data collected by the Company. The 2018 exploration work at Calcatreu consisted of property-scale geological mapping along with a pole-dipole, induced polarization and resistivity (IP/Res) geophysical survey, followed by a diamond drill program of 6,495 meters (please see the table of the Company's mineral resources herein and the respective, supporting NI 43-101 technical reports on file at www.sedarplus.ca). The updated mineral resource estimate, completed by CUBE, is tabulated herein.

In 2019, an exploration program was conducted consisting of surface work, a total of 41.28 line kilometers of pole-dipole induced polarization and resistivity ("IP/Res") geophysical survey conducted over the main Nelson targets and Castro Norte, Fiero, Sabrina and Viuda de Castro areas, and 121.5 line-kilometers of gradient array IP/Res geophysics over Nelson, Sabrina and Mariano. Subsequently, 1,687.2 line kilometers of ground magnetics surveying, covering 55.44 square kilometers, was completed covering several targets including the main V49 and Nelson. The objective of the surveys was to identify hidden, non-outcropping mineralization in dilatational jogs, blind structures and other geologic settings. Geologic mapping and sampling were completed over several targets of interest, notably Viuda de Castro, Trinidad, La Cruz, subcrops of the Nelson extension, Piche, La Olvidada and Epu Peñi. The sampling yielded 254 rock chips and 81 new, sawed channels. Overall, approximately 50% of the core from the property was relogged, though totalling up to 80% in some areas such as Veta 49 and Belen.

A rotary air blast ("RAB") drilling campaign and channel (sawed) sampling was in progress in early 2020 when all the activities were paused due to the COVID-19 pandemic. The activities restarted in September 2020. A total of 36 RAB holes were drilled over the main V49 vein and 6 over Piche totaling 740 and 116 meters of drilling respectively and a total of 856 samples. Trenches and saw channel: a total of 1,308.7 m and 447 samples were taken over the Epu Peñi, Fiero, La Olvidada, Nelson Sur, Piche and Viuda de Castro targets. Geophysics: A total of 1,111.57 line kilometers of ground magnetic geophysical surveying was completed over the extension of the main targets and the new Amancay area, and 18.4 line kilometers of pole-diploe IP/Res over Trinidad and Nelson Targets. In December 2020, a baseline environmental study (the "Baseline Study") began by choosing the contractors and reviewing the information generated in the past. The Baseline Study aims to contextualize the environmental state before the construction and production of the project begins.

In 2021, work on the Baseline Study continued with field work, along with drilling, surface exploration and geophysics. RAB drilling was also conducted to obtain information from near surface on the up-dip extension of mineralization in the main structures (Veta 49 and Nelson). A total of 156 holes have been drilled for a total of 1,708 meters ("m") and 1,708 samples (one per meter) collected which included 15 holes in the Belen prospect (156 m), 51 holes at Nelson (528 m), 21 holes in Nelson Oeste (241 m) and 69 holes in the Vein 49 target (783 m). 146.75 m and 196 sawed channel samples have been cut in Nelson Central, Nelson W and Puesto targets. In addition, a total of 3,730.35 m of trenches and 2,223 samples have been excavated and sampled with 50% of them in Nelson and its brunches aimed to understand the behavior of the veins in the southern extreme.

During 2021, a total of 901.5 line kilometers of ground magnetics have been surveyed which included 200 line kilometers over the new Amancay vein and other parts of the property to extend the known mineralized corridors to the south. A total of 31.8 line kilometers of Pole-Dipole IP/Res surveying were completed including 0.8 km over the Amancay vein, 13.5 km in Nelson, 9,0 km in Castro Sur, 4 km at Lonco and 4.5 km over V49 and Epu Peñi.

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