Silver Dollar Resources : Management's Discussion and Analysis

Silver Dollar Resources Inc.

Management's Discussion and Analysis

Financial period ended February 28, 2022

Containing information as of April 19, 2022

Silver Dollar Resources Inc. • 179 - 2945 Jacklin Road, Suite 416, Victoria, BC, V9B 6J9 • Telephone [phone]

Caution Regarding Forward-Looking Information

Certain of the statements made and information contained herein and in the financial statements is "forward-looking information" within the meaning of the Securities Act (British Columbia). This includes statements by Silver Dollar Resources Inc. (the "Company" or "Silver Dollar") concerning exploration results, including deposit size, quantities, grades and contained metals, which are generally made on the basis of estimations and extrapolations from a limited number of samples, drill holes and assays. These estimations and extrapolations are subject to uncertainties which include but are not limited to uncertainties in connection with evaluating a deposit until the deposit has been extensively drilled on closely spaced centres. Should one or more of these underlying estimations or extrapolations prove incorrect, actual results may vary materially from those described in forward-looking statements.

Forward-looking statements contained herein also include the Company's future operating costs and exploration plans at its mineral properties. These involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Forward-looking information is subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking information including, without limitation, the ability of the Company to continue to be able to access the capital markets for funding necessary for operating costs, to acquire and maintain exploration properties and to carry out its desired exploration programs; difficulties in executing exploration programs on the Company's proposed schedules and within its cost estimates, whether due to weather conditions in the areas where it operates, increasingly stringent environmental regulations and other permitting restrictions, or the availability of essential supplies and services; and factors beyond the capacity of the Company to anticipate and control, such as the marketability of minerals, government regulations relating to health, safety and the environment, foreign currency controls, and the scale and scope of royalties and taxes on production. Should one or more of these risks or uncertainties materialize actual results may vary materially from those described in forward-looking statements.

Accordingly, readers are advised not to place undue reliance on forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new information, future events or otherwise.

Description of Business

Silver Dollar is a junior exploration company whose common shares are listed on the Canadian Securities Exchange and quoted on the OTCQX® Best Market. It is in the process of exploring its mineral properties and has not yet determined whether these properties contain ore reserves that are economically recoverable.

The Company has options to purchase the La Joya Silver Project located in Durango, Mexico and the Longlegged Lake and Pakwash Lake gold properties located near Red Lake, Ontario.

The following discussion and analysis of the operations, results and financial position of the Company should be read in conjunction with the condensed consolidated interim financial statements as of and for the period ended February 28, 2022 and the notes thereto (the "financial statements"). The financial statements are incorporated herein by reference.

The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and unless otherwise cited, references to dollar amounts are Canadian dollars. The financial statements were prepared on a going concern basis, which presumes the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. The Company had working capital of $9,256,940 as of February 28, 2022. The Company's ability to meet its obligations and maintain its operations is contingent upon additional financing or profitable operations in the future.

Overall Performance and Discussion of Operations

Second Quarter Results

During the second quarter of its 2022 financial year, the Company's consolidated net loss was $317,851, as compared with a $3,376,961 net loss during the corresponding period last year. This $3,059,110 improvement was caused primarily by a $2,976,821 decrease in non-cash share-based compensation expense relating to the grant of stock options in late 2020, and to a lesser degree a $50,293 decrease in travel and promotion expenses following a tapering-off of an investor outreach program launched in late 2020 and a $42,747 decrease in consulting fees.

Six-Month Results

During the first half of its 2022 financial year, the Company experienced a consolidated net loss of $565,301. This represents a $3,108,536 decrease from the $3,673,837 loss during the same period last year. The bulk of this change was, as described above, caused by a $2,976,821 decrease in share-based compensation, a $77,550 decrease in consulting fees and a $47,114 decrease in travel and promotion costs.

Cash Flow

As of its February 28, 2022 financial period-end, the Company had cash of $9,066,671 as compared with $10,267,287 at the beginning of the period - a decrease of $1,200,616. Of this total, $300,599 of cash was used for its operations and $900,070 of cash was used for the exploration and acquisition of the Company's silver and gold projects. Management expects exploration expenditures to continue at a similar pace in the coming quarters as it continues exploring its La Joya, Longlegged Lake and Pakwash Lake projects.

For a detailed breakdown of exploration and evaluation assets for the first half of the Company's 2022 financial year on a property-by-property basis as well as for the same period last year, refer to the Condensed Consolidated Interim Schedules of Exploration and Evaluation Assets accompanying the financial statements.

General

The Company has begun drilling its La Joya Silver Project in Durango, Mexico and exploring its Longlegged Lake and Pakwash Lake gold properties near Red Lake, Ontario. In general, silver and gold prices remain historically strong, and management expects world political turmoil and surging inflation to continue pressuring prices higher. Accordingly, the Company plans to continue its strategy of advancing its mineral properties to add shareholder value.

Current global uncertainty with respect to the COVID-19 pandemic and its effect on the Canadian economy and financial markets may have significant and as-yet unpredictable effects on the Company. While the impact remains unknown, ongoing spread of the virus and periodic future recurrences may have a material adverse effect on economic activity and could affect exploration plans, disrupt metals and financial markets, and affect other factors relevant to the Company.

Summary of Unaudited Quarterly Results

Revenue	$ -	$ -
Loss for the period	(317,851)	(247,450)
Loss per share	(0.01)	(0.01)
Total comprehensive loss	(316,887)	(249,756)

2022	2021
2nd Quarter 1st Quarter	4th Quarter	3rd Quarter 2nd Quarter	1st Quarter
$ -	$ -$ -	$ -	$ -	$ -
(254,815)	(549,805) (3,376,961)	(296,877)	(481,570)	(138,209)
(0.01)	(0.01) (0.09)	(0.01)	(0.02)	(0.01)
(254,815)	(549,805) (3,376,961)	(296,877)	(481,570)	(138,209)

2020

4th Quarter 3rd Quarter

Variations in operating loss from quarter to quarter typically result from increases in exploration and property acquisition activity. During periods of greater activity, such as the fourth quarter of 2020 and the first three quarters of 2021, professional fees, consulting fees, costs relating to regulatory approvals and travel and promotion costs will typically increase. In addition, the Company completed its initial public offering and stock exchange listing during its third and fourth quarters of 2020, which resulted in higher professional fees than previous. During the third and fourth quarters of 2020 and the second and third quarters of 2021, non-cash share-based compensation also contributed to the marked increases in net loss.

The differences between loss for the period and total comprehensive loss are the result of currency exchange differences on translating foreign operations.

The quarterly results summarized herein were prepared in accordance with International Financial Reporting Standards and are expressed in Canadian dollars.

Liquidity and Capital Resources

The Company does not yet generate positive cash flow from operations and is therefore reliant upon the issuance of its own common shares to fund its operations. As of the date hereof, the Company is adequately funded for the short- and medium-term. To continue to fund its long-term exploration plans, the Company must raise additional equity capital. There is, however, no certainty that such financings will be completed.

The Company has no debt obligations and no commitments other than as described herein and in its financial statements.

Management expects that the Company presently has enough working capital to fund operating costs through at least April 2023.

Mineral Exploration Activities

La Joya Silver Project, Durango, Mexico

Overview

In August 2020, Silver Dollar entered into a definitive option agreement whereby Silver Dollar can acquire an initial 80% interest, and if exercised, a second option to acquire an additional 20% interest for an aggregate 100% interest in the La Joya silver-copper-gold property. The property, located in the southeastern portion of the State of Durango in the Mexican Silver Belt, consists of 15 mineral concessions totalling 4,646 hectares and hosts the Main Mineralized Trend, Santo Nino and Coloradito deposits.

In 2013, SilverCrest Mines Inc. disclosed a mineral resource estimate for the property that was reported to conform to CIM definitions for resource estimation. A qualified person of Silver Dollar has not done sufficient work to classify this historical estimate as a current mineral resource andthe Company is not treating this historical resource estimate as a current mineral resource. Independent data verification and an assessment of the mineral resource estimation methods are required to verify the historical mineral resource.

Table 2 from National Instrument (NI) 43-101 Technical report titled "Preliminary Economic Assessment for The La Joya Property, Durango, Mexico", dated 5 December 2013.

Key assumptions, parameters, and methods used to prepare the historical mineral estimate:

•  89 holes totaling 30,085 metres (m)

•  Raw assay data was composited to 2 metres, capped at 550 gpt Ag, 5.5 gpt Au 6% Cu and interpolated into a block model using 5 m x 5 m x 5 m block size using inverse distance squared (ID2) methodology

•  Silver equivalency formula assumes Ag:Au is 50:1, Ag:Cu is 86:1, based on US$24/oz silver, US$1200/oz gold, US$3/lb copper and 100% metallurgical recovery

•  Mining by open-pit methods

•  Mining and process costs assumptions not specifically stated.

The Property is situated approximately 75 kilometres directly southeast of the state capital city of Durango in a prolific mineralized region with past-producing and operating mines including Grupo Mexico's San Martin Mine, Industrias Penoles' Sabinas Mine, Pan American Silver's La Colorada Mine and First Majestic Silver's La Parrilla and Del Toro Silver Mines. Access and infrastructure near the Property are considered excellent with highway, rail and power lines nearby.

Previously Unreported 2014 Drilling Results

Between February and March 2014, SilverCrest Mines Inc. completed its Phase 3 drilling program; however, the results were not previously reported. Records of the Phase 3 program were obtained by Silver Dollar through the file-sharing arrangement under the definitive agreement with the optionor. Announcement of the drilling program was included in the final Management's Discussion and Analysis issued by SilverCrest November 12, 2014 for the three and nine months ended September 30, 2014, which read:

"La Joya Project third quarter highlights: SilverCrest completed a 17 hole in-fill drilling program (2,698 metres). The program provides valuable information that will enable SilverCrest to advance towards an updated resource model in H1 2015."

The updated resource model was never completed due to the optionor's acquisition of SilverCrest, which was completed in October 2015.