Salazar Resources : MDA for 6 months ended June 30 2022

SALAZAR RESOURCES LIMITED

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

This discussion and analysis of financial position and results of operation is prepared as at August 29, 2022 and should be read in conjunction with the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2022 of Salazar Resources Limited (the "Company" or "Salazar"). The following disclosure and associated financial statements are presented in accordance with International Financial Reporting Standards ("IFRS"). Except as otherwise disclosed, all dollar figures included therein and in the following management discussion and analysis ("MD&A") are quoted in Canadian dollars.

Forward-Looking Statements

Certain information in this MD&A may constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws (collectively, "Forward-Looking Statements"). All statements, other than statements of historical fact that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future are Forward- Looking Statements. Forward-Looking Statements are often, but not always, identified by the use of words such as "seek," "anticipate," "believe," "plan," "estimate," "expect," and "intend" and statements that an event or result "may," "will," "can," "should," "could," or "might" occur or be achieved and other similar expressions. Forward-Looking Statements are based upon the opinions and expectations of the Company based on information currently available to the Company. Forward-Looking Statements are subject to a number of factors, risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the Forward-Looking Statements including, among other things, the Company has yet to generate a profit from its activities; there can be no guarantee that the estimates of quantities or qualities of minerals disclosed in Salazar's public record will be economically recoverable; uncertainties relating to the availability and costs of financing needed in the future; successful completion of planned drill program; competition with other companies within the mining industry; the success of the Company is largely dependent upon the performance of its directors and officers and Salazar's ability to attract and train key personnel; changes in world metal markets and equity markets beyond Salazar's control; mineral reserves are, in the large part, estimates and no assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated level of recovery will be realized; production rates and capital and other costs may vary significantly from estimates; unexpected geological conditions; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; community relations; all phases of a mining business present environmental and safety risks and hazards and are subject to environmental and safety regulation, and rehabilitation and restitution costs; and management of Salazar have experience in mineral exploration but may lack all or some of the necessary technical training and experience to successfully develop and operate a mine. Although Salazar believes that the expectations reflected in the Forward- Looking Statements, and the assumptions on which such Forward-Looking Statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on Forward-Looking Statements, as there can be no assurance that the plans, intentions or expectations upon which the Forward-Looking Statements are based will occur. Forward-Looking Statements herein are made as at the date hereof, and unless otherwise required by law, Salazar does not intend, or assume any obligation, to update these Forward-Looking Statements.

Historical results of operations and trends that may be inferred from this MD&A may not necessarily indicate future results from operations. In particular, the current state of the global securities markets may cause significant reductions in the price of the Company's securities and render it difficult or impossible for the Company to raise the funds necessary to continue operations.

All of the Company's public disclosure filings, including its most recent management information circular, material change reports, press releases and other information, may be accessed via www.sedar.comand readers are urged to review these materials, including the technical reports filed with respect to the Company's mineral properties.

Company Overview

The Company's principal business activity is the acquisition, exploration and development of mineral properties in Ecuador. As of the date of this MD&A the Company considers itself to be an exploration stage company.

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The Company is a reporting issuer in British Columbia, Alberta, Ontario and Nova Scotia. The Company's shares trade on the TSX Venture Exchange ("TSXV") under the symbol "SRL" as a Tier 1 mining issuer, on the OTCQX under the symbol "SRLZF", and on the Frankfurt Exchange under the symbol "CCG". The Company's executive head office is located in Quito, Ecuador.

The Company's main activities had previously been the ongoing exploration activities on the Curipamba Project in Ecuador. In late fiscal 2017 the Company entered into an option agreement (the "Curipamba Option Agreement") with Adventus Mining Corporation ("Adventus") whereby Adventus could earn (the "Earn-In") a 75% interest in the Curipamba Project with Adventus funding costs of US $25,000,000 over five years, including the completion of a feasibility study on the El Domo deposit. Under the Curipamba Option Adventus has agreed to provide the Company with US $250,000 per year advance payments until achievement of commercial production, to a maximum of US $1,500,000. As of the date of this MD&A the Company has received total advance payments of US $1,250,000.

On December 10, 2021, having filed the feasibility study ("Feasibility Study") titled "National Instrument 43-101 ("NI 43-101") Technical Report Feasibility Study - Curipamba El Domo Project", Adventus has completed the final milestone requirement under the Option Agreement. On December 31, 2021 (the "Option Exercise Date") the Company approved the transfer of a 75% ownership interest in Salazar Holdings, effectively reducing the Company's ownership interest to 25%. (See also "Curipamba Earn-in" below for more details.)

Upon achievement of commercial production, Adventus will receive 95% of the distributions from the Curipamba Project until its aggregate investment, including the US $25,000,000, has been recouped minus the approximate Company carrying value of US $18,200,000 when the Curipamba Option was signed, after which distributions will be shared on a pro-rata basis according to their respective ownership. In certain circumstances where project development is delayed post earn-in, Adventus' ownership position could be diluted.

The Company and Adventus have also entered into an exploration alliance agreement (the "Alliance") to jointly explore Ecuador with the initial focus on zinc assets. The venture, Minera Dos Gemas M2G S.A. ("Dos Gemas"), was formed in 2017 and is currently owned 80% by Adventus and 20% by the Company with Adventus funding all activities incurred up to a construction decision. As operator the Company receives a 10% operator's fee on certain expenditures incurred, subject to an annual maximum fee of US $200,000 on costs pertaining to surface rights acquisitions.

In March 2018 the Company, Adventus and Dos Gemas entered into a letter agreement whereby the Company agreed to transfer the Pijili Project to Dos Gemas under the Alliance whereby Adventus has issued 2,536,232 Adventus common shares at an ascribed value of $2,028,986, paid a total of $195,705 (US $150,000) cash and fulfilled its US $1,000,000 minimum exploration commitments. The official transfer of the Pijili Project was completed in May 2021.

In May 2018 the Company, Adventus and Dos Gemas entered into an agreement whereby the Company agreed to transfer the Santiago Project to Dos Gemas under the Alliance whereby Adventus has issued 1,268,116 Adventus common shares, at an ascribed value of $1,014,492, paid a total of $97,118 (US $75,000) cash and fulfilled its US $500,000 minimum exploration commitments. The official transfer of the Santiago Project was completed in fiscal 2019. The Santiago Project is subject to a 1.5% net smelter royalty that can be bought out for US $1,000,000, as well as a 4% net profits interest royalty that is in favour of INV Metals Inc.

The Company continues to work on its strategy to discover, de-risk and define deposits within its wholly-owned portfolio. The Company intends to retain 100% ownership of its top future discovery prospects and to find mid-tier or major mining company partners for the more advanced work on its non-core discoveries.

COVID-19

March 2022 marked the second anniversary of the COVID-19 pandemic, and globally, countries are emerging from the various public health safety measures that were put in place by most of the world's nations. The overall impact of the COVID-19 pandemic on the Company to date has not been material, and in the first quarter of 2022, work is relatively uninterrupted.

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Property Update - Joint Venture Projects

Curipamba Earn-in

On December 10, 2021, Adventus and the Company filed the Feasibility Study, results of which were announced on October 26, 2021.

By December 31, 2021, Adventus had already incurred $47,127,000 of its expenditure commitment, well over the required $25,000,000. On December 10, 2021, Adventus, having completed its obligations under the Curipamba Option, delivered written notice of its exercise (the "Option Exercise Notice") to the Company. On December 31, 2021 (the "Option Exercise Date") the Company approved the transfer of a 75% ownership interest in Salazar Holdings, effectively reducing the Company's ownership interest to 25%.

Pursuant to the Curipamba Option, as of the Option Exercise Date:

1. the aggregate amount of advances from Adventus for the Curipamba Project shall be capitalized in Salazar Holdings. Adventus shall be granted 75 Class A common shares representing 75% of the total issued and outstanding Class A common shares, and 95 Class B preferred shares, representing 100% of the total issued and outstanding Class B preferred shares; and
2. the Company, Adventus, Salazar Holdings and Curimining shall enter into a shareholders' agreement ("Shareholders' Agreement") and reconstitute the board of directors of Curimining ("Curimining Board") with two Adventus nominees and one Company nominee. The Company and Adventus proceeded to finalize the Shareholders Agreement on January 4, 2022.

As the rights of Adventus to the earn-in were substantively achieved on the Option Exercise Date, the Company and Adventus agreed that Adventus has obtained control of Salazar Holdings as from the Option Exercise Date and acquired 75% of the interest of Salazar Holdings.

Pursuant to the Curipamba Option and the Shareholders' Agreement, Adventus has priority repayment of its investment in Curipamba according to an agreed distribution formula.

Curipamba - El Domo Feasibility Study

Highlights of the results of the Feasibility Study are as follows:

Mineral Resource Estimate Update

As part of the Feasibility Study, an update to the mineral resource estimate was completed, with an effective date of October 26, 2021 and is disclosed in accordance with National Instrument 43-101 ("NI 43-101") Standards of Disclosure for Mineral Projects and prepared by SLR Consulting (Canada) Ltd. ("SLR"), formerly Roscoe Postle Associates. The updated estimate is shown in the following tables.

Table 1a. Total Mineral Resource for El Domo, Curipamba Project - October 26, 2021 (sum of tables 1b and 1c)

	Resource			Tonnes					Grade						Contained Metal
					Cu	Pb	Zn	Au	Ag		Cu	Pb		Zn		Au	Ag
	Category			(Mt)
				(%)	(%)	(%)	(g/t)	(g/t)		(kt)	(kt)		(kt)		(koz)	(koz)
	Measured	3.2		2.61	0.24	2.50	3.03	45	84.9	7.7		81.1		316	4,704
	Indicated	5.7		1.83	0.24	2.64	1.98	45	104.5	13.9		150.6		364	8,265
	M+I	9.0		2.11	0.24	2.59	2.36	45	189.4	21.6		231.7		680	12,969
	Inferred	1.1		1.72	0.14	2.18	1.62	32	18.5	1.5		23.6		57	1,118

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Table 1b. Pit Constrained Mineral Resource for El Domo, Curipamba Project - October 26, 2021

	Resource			Tonnes					Grade						Contained Metal
					Cu	Pb	Zn	Au	Ag		Cu	Pb		Zn		Au	Ag
	Category			(Mt)
				(%)	(%)	(%)	(g/t)	(g/t)		(kt)	(kt)		(kt)		(koz)	(koz)
	Measured	3.2		2.61	0.24	2.50	3.03	45	84.9	7.7		81.1		316	4,704
	Indicated	3.8		1.38	0.30	2.77	2.29	52	52.6	11.3		105.2		280	6,370
	M+I	7.1		1.95	0.27	2.64	2.63	49	137.5	19.0		186.3		596	11,074
	Inferred	0.3		0.34	0.20	1.01	1.34	39	1.2	0.7		3.5		15	430
			Table 1c. Underground Mineral Resource for El Domo, Curipamba Project - October 26, 2021
	Resource			Tonnes					Grade						Contained Metal
					Cu	Pb	Zn	Au	Ag		Cu	Pb		Zn		Au	Ag
	Category			(Mt)
				(%)	(%)	(%)	(g/t)	(g/t)		(kt)	(kt)		(kt)		(koz)	(koz)
	Indicated	1.9		2.72	0.14	2.38	1.37	31	51.9	2.6		45.4		84	1,895
	Inferred	0.8		2.31	0.11	2.68	1.74	29	17.3	0.8		20.1		42	688

Notes:

1. CIM Definition Standards (2014) definitions were followed for Mineral Resources.
2. Mineral Resources are reported above a cut-off Net Smelter Return ("NSR") value of $29/t for Mineral Resources amenable to open-pit mining and the underground portion of the 2021 Mineral Resources are reported with mining shapes which were generated using a $105/t NSR cut-off value.
3. The NSR value is based on estimated metallurgical recoveries, assumed metal prices, and smelter terms, which include payable factors treatment charges, penalties, and refining charges.
4. Mineral Resources are estimated using the metal price assumptions: $4.00/lb Cu, $1.05/lb Pb, $1.30/lb Zn, $1,800/oz Au, and $24/oz Ag.
5. Metallurgical recovery assumptions were based on three mineral types defined by the metal ratio Cu/(Pb+Zn):
6. 1. Zinc Mineral (Cu/(Pb+Zn) <0.33): 86% Cu, 90% Pb, 97% Zn, 68% Au and 78% Ag
   2. Mixed Cu/Zn Mineral (0.33≤ Cu/(Pb+Zn) ≤3.0): 86% Cu, 82% Pb, 95% Zn, 55% Au and 67% Ag
   3. Copper Mineral (Cu/(Pb+Zn) >3.0): 80% Cu, 37% Pb, 36% Zn, 14% Au and 29% Ag
7. NSR factors were also based on the metal ratio Cu/(Pb+Zn):
8. 1. Zinc Mineral (Cu/(Pb+Zn) <0.33): 53.41 $/% Cu, 7.99 $/% Pb, 13.47 $/% Zn, 30.91 $/g Au and 0.39 $/g Ag
   2. Mixed Cu/Zn Mineral (0.33≤ Cu/(Pb+Zn) ≤3.0):58.99 $/% Cu, 7.05 $/% Pb, 13.41 $/% Zn, 25.12 $/g Au and 0.34 $/gAg
   3. Copper Mineral (Cu/(Pb+Zn) >3.0): 57.83 $/% Cu, 6.84 $/g Au and 0.19 $/g Ag

1. Bulk density interpolated on a block per block basis using assayed value, the correlation between measured density values and iron content, and base metal grade. The bulk densities range between 2.1 t/m3 and 4.6 t/m3
2. Mineral Resources are inclusive of Mineral Reserves.
3. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
4. The underground portion of the Mineral Resources are reported within underground reporting shapes and include low grade blocks falling within the shapes.
5. Qualified Person ("QP") is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimate

12. Numbers may not add due to rounding.

Feasibility Study Mineral Reserves

The basis of the Curipamba Feasibility Study is on the maiden open-pit Mineral Reserves that were estimated from the updated open-pit Mineral Resources and on the mine design by DRA (Table 2).

Table 2: Open-Pit Mineral Reserves Statement

Classification	Tonnes				Grade							Contained Metal
	Cu	Pb	Zn	Au	Ag			Cu	Pb		Zn		Au	Ag
(kt)
	(%)	(%)	(%)	(g/t)	(g/t)			(kt)	(kt)		(kt)		(koz)	(koz)
Proven Reserves	3,136	2.50	0.2	2.30	2.83	41	78.4	6.7		72.0		285	4,175
Probable Reserves	3,343	1.39	0.3	2.67	2.23	50	46.4	9.4		89.4		240	5,342
Proven + Probable	6,478	1.93	0.2	2.49	2.52	46	124.9	16.2		161.4		525	9,517
Notes:

1. Waste: Ore Strip Ratio 6.02 : 1 not including pre-strip waste and 8.59 : 1 including pre-strip waste
2. The effective date of the Mineral Reserve Estimate is October 26, 2021.
3. Mineral Reserves are reported in accordance with CIM Definition Standards (2014) and best practice guidelines (2019).
4. An NSR cut-off grade of $32.99 was used for all material.
5. Mineral reserves were estimated at a gold price of $1,630/oz, a silver price of $21.00/oz, a lead price of $0.92/lb, a zinc price of $1.16/lb, and a copper price of $3.31/lb; they include modifying factors related to mining cost, dilution, mine recovery, process recoveries and costs, G&A, royalties, and rehabilitation costs.

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1. Figures have been rounded to an appropriate level of precision for the reporting of Mineral Reserves.
2. Due to rounding, some columns or rows may not compute exactly as shown.
3. The Mineral Reserves are stated as dry tonnes processed at the crusher.
4. Tonnages are presented in metric tonnes

Open-Pit Feasibility Study

The Feasibility Study is based only on open-pit Mineral Reserves, whereas the 2019 preliminary economic assessment included both the open pit and potential underground Mineral Resources ("2019 PEA"). A summary of the key Feasibility Study results with sensitivity scenarios for higher and lower metal prices can be found in the Feasibility Study.

Future Steps for Curipamba

Following the completion of the Feasibility Study, Adventus is progressing towards the following workstreams prior to construction decision approval and ramp-up to full scale construction:

• Complete detailed engineering
• Additional geotechnical drilling and test work to support the detailed design
• Additional geochemistry test work
• Upgrade existing and construct a new access road to the project site
• Power line detailed engineering, permitting and preparatory work
• Commence site preparatory infrastructure work (fencing, on-site roads, clear & grub, etc.)
• Install the previously purchased construction camp (see July 14, 2021 news release)
• Purchase engineering / vendor data for long lead equipment to support the detailed design (ball mill, flotation cells etc.)
• Prepare request-for-proposal documentation and tender the major construction contracts (mining, earthworks, concrete, steel, mechanical/piping, electrical and instrumentation), in preparation for award
• Complete final land acquisition
• Receive ESIA approval, and sign-off on investment protection agreement

Project Financing

On August 5, 2022 Adventus finalized definitive agreements that constitute the Offtake Financing Agreement (the "OFA") with Trafigura Pte Ltd ("Trafigura") which secures up to US $55,000,000 towards the advancement of the El Domo Project. This follows the binding commitment previously announced on January 17, 2022, together with the financial commitment by Wheaton Precious Metals Corp ("Wheaton").

With OFA completion, the joint venture has secured up to US $235,500,000 million for the advancement and future construction of the El Domo Project. Pursuant to the OFA, Trafigura will provide Adventus Mining with a senior debt facility (the "Facility") of US $45,000,000, US $5,000,000 of which can be paid on an early deposit basis to be used for pre-construction activities at the El Domo Project. The remainder of the cash consideration is payable in two staged installments during future construction of the El Domo Project, subject to certain customary conditions precedent being satisfied.

Technical Information and Quality Control & Quality Assurance ("QAQC")

The engineering and technical content of the Feasibility Study and Underground PEA has been reviewed and approved by Mr. Dustin Small, P.Eng., Vice President of Projects for Adventus, a non-Independent Qualified Person, as defined by NI 43-101.

The Curipamba Project resource-related work program is being managed and reviewed by Adventus's Vice President Exploration, Jason Dunning, M.Sc., P.Geo., a non-Independent Qualified Person within the meaning of NI 43-101. Salazar staff collect and process samples that are securely sealed and shipped to Bureau Veritas ("BV") in Quito for sample preparation that includes crushing and milling to prepare pulps that are then split for shipment to their facility in Lima, Peru for analysis.

All assay data have undergone internal validation of QAQC; noting there is an established sampling control program with blind insertion of assay blanks, certified industry standards and sample duplicates for the Curipamba project. A

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