Patagonia Gold : Q3 2021 Management’s Discussion and Analysis

PATAGONIA GOLD CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the three and nine months ended September 30, 2021

November 29, 2021

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 three and nine months ended September 30, 2021 and a comparison of the material changes in our results of operations and financial condition between the year ended December 31, 2020 and the three and nine months ended September 30, 2021. This MD&A should be read in conjunction with the Company's unaudited condensed interim consolidated financial statements ("interim financial statements") for the three and nine months ended September 30, 2021, annual audited consolidated financial statements for the year ended December 31, 2020 and the related MD&A.

These statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). Upon the reverse acquisition with Patagonia Gold Corp, Patagonia Gold Limited became the ongoing entity for accounting purposes and Patagonia Gold Limited had to switch to reporting under accounting principles generally accepted in the United States of America ("US GAAP") as Patagonia Gold Corp. is a registrant with the U.S. Securities and Exchange Commission ("SEC"). Effective June 30, 2020, the Company obtained "foreign private issuer" status in accordance with SEC guidelines and became eligible to satisfy its reporting requirements using IFRS.

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.sedar.comand on EDGAR at www.sec.gov.

Management's Responsibility for Financial Reporting

The interim financial statements have been prepared by management in accordance with IFRS and have been approved by the Company's board of directors (the "Board"). The integrity and objectivity of the interim 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 interim 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-effectivebases 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 and the United States of America (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",

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"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: 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 favourable 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 favourable 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 favourable 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 favourable 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.

Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates

Unless otherwise indicated, all reserve and resource estimates used by the Company have been prepared in accordance with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral Reserves ("CIM Definition Standards"). NI 43-101 is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Accordingly, information contained in this MD&A providing descriptions of the Company's mineral deposits in accordance with NI 43-101 may not be comparable to similar information made public by other U.S. companies subject to the United States federal securities laws and the rules and regulations thereunder.

Pursuant to CIM Definition Standards, "Inferred mineral resources" are that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Such geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An inferred mineral resource has a lower level of confidence than that applying to an indicated mineral resource and must not be converted to a mineral reserve. However, it is reasonably expected that the majority of inferred mineral resources could be upgraded to indicated mineral resources with continued exploration. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource is economically or legally mineable. Effective February 25, 2019, the SEC adopted new mining disclosure rules under subpart 1300 of Regulation S-K of the United States Securities Act of 1933, as amended (the "SEC Modernization Rules"), with compliance required for the first fiscal year beginning on or after January 1, 2021. The SEC Modernization Rules replace the historical property disclosure requirements included in SEC Industry Guide 7. As a

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result of the adoption of the SEC Modernization Rules, the SEC now recognizes estimates of "Measured Mineral Resources", "Indicated Mineral Resources" and "Inferred Mineral Resources". In addition, the SEC has amended its definitions of "Proven Mineral Reserves" and "Probable Mineral Reserves" to be substantially similar to corresponding definitions under the CIM Definition Standards. While the SEC Modernization Rules are purported to be "substantially similar" to the CIM Definition Standards, readers are cautioned that there are differences between the SEC Modernization Rules and the CIM Definition Standards. Accordingly, there is no assurance any mineral reserves or mineral resources that the Company may report as "proven mineral reserves", "probable mineral reserves", "measured mineral resources", "indicated mineral resources" and "inferred mineral resources" under NI 43-101 would be the same had the Company prepared the reserve or resource estimates under the standards adopted under the SEC Modernization Rules.

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. For more information, see note 25 of the December 31, 2020 audited financial statements.

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.

The interim 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	95.3	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 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.

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Summary of Consolidated Results of Operations ($'000's)

(in $000's, except ounces and per share		Three months ended September 30,			Nine months ended September 30,
	2021		2020		Change	%Change		2021		2020		Change	%Change
amounts)
Operational results
Total gold equivalent ounces - produced (1)		2,175		2,020		155	8%		6,865		7,382		(517)	(7%)
Total gold equivalent ounces - sold (1)		3,223		3,277		(54)	(2%)		7,878		9,279		(1,401)	(15%)
Financial results
Revenue	$	5,758	$	6,549	$	(791)	(12%)	$	14,233	$	16,469	$	(2,236)	(14%)
Cost of sales	$	4,278	$	4,213	$	65	2%	$	10,061	$	10,880	$	(819)	(8%)
Exploration expenses	$	1,432	$	678	$	754	111%	$	3,204	$	1,792	$	1,412	79%
Repair and maintenance	$	126	$	-	$	126	N/A	$	514	$	-	$	514	N/A
Administrative expenses	$	1,227	$	1,315	$	(88)	(7%)	$	4,188	$	3,810	$	378	10%
Interest expense	$	377	$	615	$	(238)	(39%)	$	959	$	1,957	$	(998)	(51%)
Net loss	$	(1,712)	$	(1,041)	$	(671)	(64%)	$	(4,575)	$	(1,775)	$	(2,800)	(158%)
Net loss per share - basic and diluted	$	(0.004)	$	(0.003)	$	(0.001)	(33%)	$	(0.010)	$	(0.006)	$	(0.004)	(73%)

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 September 30, 2021 was 76.10:1 (2020 - 80.97:1). The ratio for the nine months ended September 30, 2021 was 72.51:1 (2020 - 87.80:1).

Three months ended September 30, 2021 and 2020

Total production increased during the three months ended September 30, 2021 due to the re-handling of the material on the Cap-Oeste's leach pad to regenerate the solution percolation and generate new channels of circulation of solution and improve the recovery. Additionally, improved leach kinetics were achieved following some chemical changes to the chemistry of the recovery process.

The Company earned total revenue of $5,758 during the three months ended September 30, 2021 compared to $6,549 during the same period in 2020. Revenue decreased mainly due to decreased in gold prices during the period compared to the same period in 2020.

Cost of sales were $4,278 during the three months ended September 30, 2021 compared to $4,213 during the same period in 2020. Cost of sales was consistent as the sale of gold equivalent ounces remained consistent during the period compared to the same period in 2020.

The Company incurred exploration expenses of $1,432 during the three months ended September 30, 2021 compared to $678 during the same period in 2020. The increase in exploration expenses was due to the Company's increased exploration program for 2021.

The Company incurred repair and maintenance expense of $126 during the three months ended September 30, 2021 compared to $Nil during the same period in 2020. The repair and maintenance expense during the period related to maintenance work at the Mina Martha Plant.

The Company incurred administrative expenses of $1,227 during the three months ended September 30, 2021 compared to $1,315 during the same period in 2020. The decrease in administrative expenses was due to lower professional fees and depreciation of property, plant and equipment.

The Company incurred interest expense of $377 during the three months ended September 30, 2021 compared to $615 during the same period in 2020. The decrease in interest expense was due to debt settled by issuing shares in October 2020.

Net loss for the three months ended September 30, 2021 was $1,712 compared to $1,041 during the same period in 2020. Net loss increased due to decrease in gross profits and increase in exploration expenses during the current period compared to the same prior period. The increase in net loss was partially offset by foreign exchange gain and other income, which consists of gain on disposition of securities. See note 22 of the interim financial statements for more information.

Nine months ended September 30, 2021 and 2020

Total production decreased during the nine months ended September 30, 2021 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. In November 2020 the Company restarted the mining operation at Lomada and started placing new material on the leach pad. Despite production decreasing quarter over quarter from the residual leach pads, the Company expects that production will stabilize and start showing the benefit from placing new material on the leach pad at Lomada. Production was also lower as the Company has not produced concentrate from Mina Martha since April 2020.

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The Company earned total revenue of $14,233 during the nine months ended September 30, 2021 compared to $16,469 during the same period in 2020. Revenue decreased due to decrease in gold equivalent ounces sold during the period compared to the same period in 2020. Gold prices remained consistent during the nine months ended September 30, 2021 compared to the same period in 2020.

Cost of sales were $10,061 during the nine months ended September 30, 2021 compared to $10,880 during the same period in 2020. Cost of sales stayed consistent due to higher cost of production during the period compared to the same period in 2020.

The Company incurred exploration expenses of $3,204 during the nine months ended September 30, 2021 compared to $1,792 during the same period in 2020. The increase in exploration expenses was due to the Company's increased exploration program for 2021.

The Company incurred repair and maintenance expense of $514 during the nine months ended September 30, 2021 compared to $Nil during the same period in 2020. The repair and maintenance expense during the period related to maintenance work at the Mina Martha Plant.

The Company incurred administrative expenses of $4,188 during the nine months ended September 30, 2021 compared to $3,810 during the same period in 2020. The increase in administrative expenses was due to the increase in Argentine statutory taxes related to the interest paid overseas to Patagonia Gold Limited and increase in depreciation of mineral properties.

The Company incurred interest expense of $959 during the nine months ended September 30, 2021 compared to $1,957 during the same period in 2020. The decrease in interest expense was due to debt settled by issuing shares in October 2020.

Net loss for the nine months ended September 30, 2021 was $4,575 compared to $1,775 during the same period in 2020. Net loss increased due to decrease in gross profits, increase in exploration and administrative expenses and decrease in other income during the current period compared to the same prior period. Other income consists of gain on disposition of securities. See note 22 of the interim financial statements for more information.

Cash flows for the nine months ended September 30, 2021 and 2020 ($'000's)

The Company generated cash of $1,812 from operating activities for the nine months ended September 30, 2021 compared to cash generated of $389 during the same period in 2020. The increase in cash generated from operating activities during 2021 was primarily due to higher accounts payable and accrued liabilities at period end.

Cash used in investing activities for the nine months ended September 30, 2021 was $3,972 compared to $1,506 for the same period in 2020. The increase in cash used in investing activities was a result of higher additions to the mineral properties as the Company restarted mining operations at Lomada in November 2020, following receipt of a preliminary permit on October 7, 2020. Mining operations at Lomada had been closed since February 2019. The costs related to the development of the new pit were capitalized as mineral properties.

Cash generated from financing activities for the nine months ended September 30, 2021 was $1,840 compared to $778 used in financing activities during the same period in 2020. The increase in cash generated from financing activities was primarily due to the private placement completed in March 2021.

Financial Position ($'000's)

Cash

The Company has cash on hand of $592 as of September 30, 2021 compared to $819 as of December 31, 2020.

Receivables

Current receivables are $1,964 as of September 30, 2021 compared to $2,041 as of December 31, 2020. The decrease in current receivables is a result of the decrease in trade and other receivables. The decrease in receivables was partially offset by increase in VAT recoverable during the nine months ended September 30, 2021.

Non-current receivables are $3,970 as of September 30, 2021 compared to $3,544 as of December 31, 2020. The increase in non-current receivables is a result of the increase in VAT recoverable and other recoverable costs during the nine months ended September 30, 2021.

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