The following Management's Discussion and Analysis of Financial Condition and Results of Operation ("MD&A") is intended to help the reader understand our financial condition. MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying integral notes ("Notes") thereto. The following statements may be forward-looking in nature and actual results may differ materially.





COVID-19

In March 2020, COVID-19 was declared a pandemic by the World Health Organization and the Centers for Disease Control and Prevention. Its rapid spread around the world and throughout the United States prompted many countries, including the United States, to institute restrictions on travel, public gatherings, and certain business operations. These restrictions disrupted economic activity in the Company's business related to raising capital. As of September 30, 2021, the disruption did not materially impact the Company's financial statements. However, if the severity of the economic disruptions increase as the duration of the COVID-19 pandemic continues, the negative financial impact due to the BeMetals Option Agreement could be significantly greater in future periods.

The effects of the continued outbreak of COVID-19 and related government responses could have disruptions to the Company`s Option Agreement with BeMetals Corp. Under the terms of the BeMetals Option Agreement, BMET USA will be entitled to purchase 100% of the issued and outstanding shares of South Mountain Mines, Inc. ("SMMI") from the Company. The term of the agreement is for two years starting June 10, 2019, with an option to extend an additional year, with BeMetals conducting a preliminary economic assessment ("PEA") completed by a mutually agreed third-party engineering firm. Over its term, this agreement requires cash payments to the Company of $1,350,000; $1,100,000 in cash and $250,000 in exchange for shares of the Company's common stock. In the event that BeMetals decides not to proceed with the South Mountain Project, BeMetals will not be obligated to make any additional payments. The COVID-19 outbreak could have a variety of adverse impacts to the Company, including their ability to continue operations of their exploration under the BeMetals Operation Agreement. Thunder Mountain Gold evaluated these impairment considerations and determined that no such impairments occurred as of September 30, 2021.

COVID-19 Additional Precautions

Thunder Mountain Gold Inc. has also taken steps to mitigate the potential risks to employees and suppliers posed by the spread of COVID-19. The Company has taken extra precautions for employees who work under the terms of the BeMetals Option Agreement, and have implemented work from home policies where appropriate.

As of September 30, 2021, there has been no material adverse impact to the BeMetals Operation Agreement. Management will continue to review and modify plans as conditions change. Despite efforts to manage these impacts to the Company, the ultimate impact of COVID-19 also depends on factors beyond management's knowledge or control, including the duration and severity of this outbreak as well as third-party actions taken to contain its spread and mitigate its public health effects. Therefore, management cannot estimate the potential future impact to financial position, results of operations and cash flows, but the impacts could be material.





Plan of Operation:

FORWARD LOOKING STATEMENTS: The following discussion may contain forward-looking statements that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially include the following: inability to locate property with mineralization, lack of financing for exploration efforts, competition to acquire mining properties; risks inherent in the mining industry, and risk factors that are listed in the Company's reports and registration statements filed with the Securities and Exchange Commission.

On February 27, 2019, the Company entered into an Option Agreement, (the "BeMetals Option Agreement") with BeMetals Corp. Under the terms of the BeMetals Option Agreement, BMET USA will be entitled to purchase 100% of the issued and outstanding shares of South Mountain Mines, Inc. ("SMMI") from Thunder Mountain Resources, Inc.

--------------------------------------------------------------------------------


                                       17

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

("TMRI"), both wholly owned subsidiaries of the Company. The term of the agreement is for two years with BeMetals completing a PEA completed by a mutually agreed third-party engineering firm. Over its term, this agreement requires BeMetals to issue 10,000,000 shares of BMET stock to the Company, and cash payments to the Company of $1,350,000: $1,100,000 in cash and $250,000 in exchange for shares of the Company's common stock. Through September 30, 2021, cash proceeds of $1,100,000 and $250,000 in exchange for shares of the Company's common stock have been received. In the event BeMetals decides not to proceed with the South Mountain Project, BeMetals will not be obligated to make any additional payments.

The Company's plan of operation for the next twelve months will be to provide support to BeMetals Corp. during their option period and help ensure that the South Mountain PEA is completed on schedule and within budget. The South Mountain Project PEA was kicked off on March 22, 2021. Both BeMetals and Thunder Mountain Gold Inc. Thunder Mountain Gold agreed to appoint Mine Technical Services Ltd., to undertake and deliver this PEA study for the Project working closely with the Company, its consultants and advisors. As part of the work for the PEA, SGS Mineral Services have been contracted to complete a metallurgical test work program to update the historical process studies. In addition, Hard Rock Consulting LLC., was contracted to provide an updated mineral resource estimate for the Project based on the drilling to-date including the new analytical drilling results released in March. Mine Technical Services was contracted to complete the South Mountain PEA.

South Mountain Project, Owyhee County, Idaho

Under the BeMetals Corporation (TSX-V: BMET) Option Agreement, BeMetals and Thunder Mountain Gold formed a project team early in 2019 that is focused on advancing the South Mountain Project. This Boise Idaho-based team includes key management of Thunder Mountain Gold Inc., who have coordinated re-establishment of the Project site prior to the start of drilling. In addition, BeMetals appointed a project manager and project geologist for this team, along with technical and underground support.

With coordination from Thunder Mountain Gold, BeMetals Corp. (BMET) commenced underground core drilling in a Phase 1 approach at South Mountain in July of 2019 and drilled twenty-one holes totaling 7,517 feet (2,290 meters) from five underground drilling stations within the Sonneman level. The drilling program was designed to test potential down plunge extensions, and overall continuity to the mineralized zones and confirm the grade distribution of the current polymetallic mineral resource. All of the drill core recovered from the drilling was logged on site and assayed by ALS Chemex. Selected intervals and results are summarized in the Company`s 2020 Form 10K for the year ended December 31, 2020.

PHASE 3 - DMEA ZONE DRILLING - SOUTH MOUNTAIN PROJECT

An additional exploratory phase of drilling from surface commenced during the third quarter at South Mountain. This program is designed to further test the down depth extent of mineralization at the DMEA Zone with the objective to significantly expand the scale of the current Mineral Resource Estimate ("MRE") at South Mountain. The DMEA Zone is the largest known body of mineralization on the Property, containing the majority of tonnage in the current MRE, and the mineralized zone remains open at depth.

This phase of the drilling program is designed with a goal of 7,000 feet of surface HQ core. Preliminary results from this drilling are expected around the end of calendar year 2021.

PHASE 2 TEXAS ZONE DRILLING - SOUTH MOUNTAIN PROJECT

A total of 8,904 feet (2,714 meters) of underground core drilling was completed during Phase 2 in 2020, with 30 holes in both the Texas and DMEA zones. During this drilling campaign, our site team widened and advanced the existing Sonneman level eastwards by 170 feet (52 meters) to establish a new drill station closer to the Texas Zone (See Figure 1). With better access to drill the Texas Zone, a total of 24 holes were completed to test this zone of mineralization. Geological logging of the core supported by sampling results indicate that two styles of high-grade mineralization have developed in this area and are now identified as the Texas West and Texas East zones.

Table 1 below illustrates the drilling results received to date from the Texas West Zone. This zone is characterized by skarn-hosted, dominantly copper and silver mineralization. This is demonstrated, for example, in the drilled intercepts:

--------------------------------------------------------------------------------


                                       18

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

·3.81% Cu with 7.82 opt (244.3 g/t) Ag over 15.7 feet (4.79 meters) in hole SM20-043 (Interval 1),

·2.56% Cu with 8.32 opt (260.1 g/t) Ag over 35.6 feet (10.85 meters) in SM20-028, and

·2.23% Cu with 10.81 opt (337.9 g/t) Ag over 16.96 feet (5.17 meters) in hole SM20-038.

Important to note that from the geological logging of the core, the higher copper grades over significant drilled widths in Texas West appear to be controlled by the increased abundance of chalcopyrite, which is a common copper sulphide mineral, often extractable through conventional flotation methods.

Representative sample material of this and other zones of the deposit have been identified and are being collected for metallurgical test work at the SGS Mineral Services site in Lakefield, Canada. Results from this study will be included with historical test work and incorporated into the planned PEA study later this year.

Table 2 below displays the drill hole intersections from the Texas East Zone where this mineralization is represented by predominantly massive sulphide hosted zinc, silver, and gold mineralization. Examples of this style of mineralization are intercepts:

·8.65% Zn, 6.98 opt (218.1 g/t) Ag and 0.078 opt (2.44 g/t) Au over 11 feet (3.37 meters) in hole SM20-043 (Interval 2), and

·4.17% Zn, 6.23 opt (194.8 g/t) Ag and 0.130 opt (4.05 g/t) Au over 27.39 feet (8.35 meters) in hole SM20-050.

The gold grades of 0.130 opt (4.05 g/t) over 27.39 feet (8.35 meters); 0.066 opt (2.07 g/t) over 15.45 feet (4.71 meters) and 0.122 opt. (3.82 g/t) over 4.39 feet (1.34 meters) in holes SM20-050, SM20-043, and SM20-029, respectively, are of specific interest from a value potential for the Texas East Zone. These Texas East intersections represent the successful targeting and interpreted extension of mineralization below historical high-grade rib sampling in the Sonneman level from the 1980s (See Figure 1). (See Thunder Mountain Gold news release, dated; January 27, 2020).

The 2020 drill program intersected mineralization extending the Texas Zone further down dip of historical drilling and the exposures in the underground development. Texas Zone mineralization is now interpreted to continue from the collar of the old Texas Shaft some 1,150 feet (350 meters) down dip to the SM20-050 intercept. Both the Texas West and East zones remain open to depth (See Figure 1). Table 3 further below provides drill hole azimuth, dip, end of hole length and collar coordinates for each of the reported drill holes.

Table 1. Analytical and Assay Results from Texas West Zone

Drill Hole ID, Zone From To Core Interval (ft) Cu % Ag Au Pb % Zn %


    & Interval       (ft)   (ft)                           opt   opt
  TEXAS WEST ZONE
     SM20-028       198.95 234.55       35.60        2.56 7.586 0.008 0.1  0.13

     SM20-030       54.89  82.09        27.20        1.13 3.649 0.003 0.02 0.26

     SM20-031       136.09 140.58        4.49        1.56 8.940 0.012 1.09 2.21

     SM20-033       110.79 119.49        8.69        2.77 7.330 0.011 0.03 0.15

     SM20-036       112.40 143.70       31.30        0.99 9.243 0.007 0.39 2.15

     SM20-038       106.00 131.00       25.00        1.64 8.152 0.022 0.86 0.55
         INCLUDING: 106.00 122.97       16.96        2.23 9.855 0.030 1.12 0.77

     SM20-041

--------------------------------------------------------------------------------


                                       19

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------


INTERVAL 1:   63.71      73.88       10.17     1.29     5.177     0.003    0.07   0.04
INTERVAL 2:   104.20     109.19      4.99      0.44     4.947     0.069    0.91   1.99

 SM20-042
INTERVAL 1:   58.99      65.19       6.20      1.92     3.004     0.002    0.01   0.03
INTERVAL 2:   78.08      83.99       5.91      1.06     3.325     0.002    0.03   0.1

 SM20-043      (ft)       (ft)      Interval             opt       opt
                                     (ft)
INTERVAL 1:   131.00     154.00      23.00     2.84     5.294     0.006    0.01   0.29
INCLUDING:    131.00     146.69      15.68     3.81     7.125     0.005    0.01   0.07

 SM20-049
INTERVAL 1:   106.89     120.64      13.75     1.82     2.608     0.002    0.01   0.18
INTERVAL 2:   147.31     151.25      3.94      2.42     4.025     0.004    0.01   0.07

Analytical and Assay results are pending for drill holes SM20-32, 34, 35, 37, 39, 40, 44-48 and 51

Note: Reported widths are drilled core lengths as true widths are unknown at this time. It is estimated based upon current data that true widths might range between 60-80% of the drilled intersection. A nominal cut-off grade of 0.5% Cu has been applied to determine the boundaries of the intersections for this skarn-hosted mineralization with no more than 1.22 meters of internal dilution.

*A nominal cut-off grade of 4.375 opt (150 g/t) Ag has been applied to this intersection. Table 3 below documents; Drill Hole Azimuth, Dip, end of hole length, and Collar Coordinates (Note: See details below in QA/QC section).

Table 2. Analytical and Assay Results from Texas East Zone



 Drill Hole ID,     From       To      Core Interval            Ag      Au
      Zone                                 (ft)        Zn %                   Pb % Cu %
   & Interval       (ft)      (ft)                              opt     opt
 TEXAS EAST ZONE
    SM20-029       202.20    206.59        4.40        19.67   6.688   0.111  3.94 0.25

    SM20-043
   INTERVAL 2:     185.47    200.89        15.42       6.19    4.918   0.060  0.71 0.39
   INCLUDING:      185.47    196.49        11.02       8.65    6.361   0.071  0.9  0.52

    SM20-050
   INTERVAL 1:     151.84    159.42        7.58         0.1    4.255   0.005  0.01 2.91
   INTERVAL 2:     162.89    190.29        27.40       4.17    5.682   0.118  0.78 0.54

Analytical and Assay results are pending for drill holes SM20-32, 34, 35, 37, 39, 40, 44-48 and 51

Note: Reported widths are drilled core lengths as true widths are unknown at this time. It is estimated based upon current data that true widths might range between 60-80% of the drilled intersection. Interval's cut-offs are based upon visual contacts of massive sulphide units with no more than 0.80 meters of internal skarn. For hole SM20-050 Interval 1. a nominal cut-off grade of 0.5% Cu has been applied to determine the boundaries of the intersections for

--------------------------------------------------------------------------------


                                       20

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

this skarn-hosted mineralization. Table 3 below documents; Drill Hole Azimuth, Dip, end of hole length, and Collar Coordinates (Note: See details below in QA/QC section).

Figure 1: 3D Perspective view inclined 200 looking north-north-east, with hole locations for SM20-028 thru SM20-050



                          [[Image Removed: Picture]]

Table 3: Drill Hole Azimuth, Dip, End of hole length and Collar Coordinates



 Hole ID  Azimuth      Dip Degree   End of hole   East (ft.) North (ft.) Elev. (ft.)
          Degree                    Length (ft)
SM20-028       90          15           246       2311764    393645      6866.77
SM20-029      126         -12           325       2311764    393645      6866.77
SM20-030       95         -30           125       2311764    393645      6866.77
SM20-031      110         -14           179       2311764    393645      6866.77
SM20-032*     105         -64           144       2311764    393645      6866.77
SM20-033      115         -30           205       2311764    393645      6866.77
SM20-034*      80          15           217       2311764    393645      6866.77
SM20-035*     105          14           78        2311764    393645      6866.77

--------------------------------------------------------------------------------


                                       21

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------


SM20-036  105 -14 269 2311764 393645 6866.77
SM20-037* 100 -14 225 2311764 393645 6866.77
SM20-038  110 -30 185 2311764 393645 6866.77
SM20-039* 122 -8  350 2311764 393645 6866.77
SM20-040* 105 -29 200 2311764 393645 6866.77
SM20-041  110 -40 185 2311764 393645 6866.77
SM20-042  87  -62 204 2311764 393645 6866.77
SM20-043  124 -20 399 2311764 393645 6866.77
SM20-044  124 -20 154 2311764 393645 6866.77
SM20-045*  0  -55 108 2311764 393645 6866.77
SM20-046* 127 -37 305 2311764 393645 6866.77
SM20-047* 60  -80 173 2311764 393645 6866.77
SM20-048* 135 -36 275 2311764 393645 6866.77
SM20-049  155 -60 205 2311764 393645 6866.77
SM20-050  150 -42 276 2311764 393645 6866.77
SM20-051* 170 -49 404 2311760 393643 6866.07

*The results pending for this drillhole.

QUALITY ASSURANCE AND QUALITY CONTROL PROCEDURES

The project employs a rigorous QC/QA program that includes blanks, duplicates and appropriate certified standard reference material. All samples are introduced into the sample stream prior to sample handling/crushing to monitor analytical accuracy and precision. The insertion rate for the combined QA/QC samples is 10 percent or more depending upon batch sizes. ALS Global completed the analytical work with the core samples processed at their preparation facility in Reno, Nevada, U.S.A. All analytical and assay procedures are conducted in the ALS facility in North Vancouver, BC. The samples are processed by the following methods as appropriate to determine the grades; Au-AA23-Au 30g fire assay with AA finish, ME-ICP61-33 element four acid digest with ICP-AES finish, ME-OG62-ore grade elements, four acid with ICP-AES finish, Pb-OG62-ore grade Pb, four acid with ICP-AES finish, Zn-OG62-ore grade Zn, four acid digest with ICP-AES finish, Ag-GRA21-Ag 30g fire assay with gravimetric finish.

The South Mountain Project

South Mountain is a polymetallic development project focused on high-grade zinc and silver. It is located approximately 70 miles southwest of Boise, Idaho (see Figure 2). The Project was intermittently mined from the late 1800s to the late 1960s and its existing underground workings remain intact and well maintained. Historic production at the Project has largely come from high-grade massive sulfide bodies that remain open at depth and along strike. According to historical smelter records, approximately 53,642 tons of mineralized material has been mined to date. These records also indicate average grades; 14.5% Zn, 11.63 opt Ag, 0.063 opt Au, 2.4% Pb, and 1.4% Cu were mined. Thunder Mountain Gold Inc. purchased and advanced the Project from 2007 through 2019 investing approximately US$12M during that period. The current mineral resource estimate of the deposit is detailed in Table 3 below and the Company expects to provide a revised mineral resource update following a phase 2 drilling program in 2020.

The Project is largely on and surrounded by private surface land, and as such, the permitting and environmental aspects of the Project are expected to be straightforward. Permits are currently in place for underground exploration activities.

--------------------------------------------------------------------------------


                                       22

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Figure 2. Location of South Mountain Project



                          [[Image Removed: Picture]]



South Mountain Mine History

The limited historic production peaked during World War II when, based on smelter receipts, the production of direct shipped ore totaled as follows:





Metal          Grade                    Total Metal
 Zinc          14.5%          15,593,100 lbs. (7,072,900 Kg)
Silver 10.6 opt  (363.4 g/t)    566,440 ozs (17,618,200 grams)
 Gold  0.058 opt  (1.99 g/t)      3,120 ozs (96,980 grams)
Copper         1.4%             1,485,200 lbs.  (6,320 Kg)
 Lead          2.4%           2,562,300 lbs.  (1,162,250 Kg)


         Anaconda Smelter - Toole Utah - Crude Ore Shipment Head Grades

                 1941-1953 Total Tons:  53,653 (48,670 tonnes)

In addition to the direct-ship ore, a flotation mill was constructed and operated during the late-1940s and early-1950s.

From the 1954 South Mountain Mill report, recoveries were reported as follows:





                        1954 South Mountain Mill Report

Metal      Head Grades     Recovery
 Zinc  6.7%                  80%

Silver 17.5 opt (600 g/t) 85%


 Gold  0.02 opt  (0.7 g/t)   75%
Copper 3.2%                  90%
 Lead  1%                    90%

These are historic grades and recoveries not confirmed by the Company, but


                                   reportedly

mined from a small 39,600-ton (35,900 tonnes) copper rich block in the Texas


                                     zone.

South Mountain Mines Inc. (an Idaho Corporation) owned the patented claims from 1975 to the time the Company purchased the entity in 2007. They conducted extensive exploration work including extending the Sonneman Level by approximately 1,500 feet to intercept the down-dip extension of the Texas sulfide mineralization mined on the Laxey Level approximately 400 feet up-dip from the Sonneman. High grade sulfide mineralization was intercepted and confirmed on the Sonneman Extension. In 1985 South Mountain Mines Inc. completed a feasibility study based on historic and newly developed ore zones exposed in their underground workings and drilling. Although they

--------------------------------------------------------------------------------


                                       23

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

determined positive economics, and that the resource was still open at depth with a large upside potential, the project was idled and placed into care and maintenance.

In 2008, the Company contracted Kleinfelder, Inc., a nationwide engineering and consulting firm, to complete a technical report "Resources Data Evaluation, South Mountain Property, South Mountain Mining District, Owyhee County, Idaho". The technical report was commissioned by Thunder Mountain Resources, Inc. to evaluate all the existing data available on the South Mountain property.

Kleinfelder utilized a panel modeling method using this data to determine potential mineralized material remaining and to make a comparison with the resource determined by South Mountain Mines in the mid-1980s. Kleinfelder's calculations provided a potential resource that is consistent with South Mountain Mines' (Bowes 1985) historic reserve model.

In 2009, the Company contracted a third-party consulting firm that incorporated

all the new drill and sampling data into an NI 43-101 Technical Report. This report was completed as part of the Company's dual listing on the TSX Venture Exchange in 2010. The Company is also traded in the U.S. on the OTCQB under ticker THMG.

In January of 2018, the Company engaged Hard Rock Consulting LLC (HRC) from Denver, Colorado to update the South Mountain Project 43-101. HRC concluded that significant potential exists to increase the known mineral resource with additional drilling, as well as to upgrade existing mineral resource classifications with additional infill drilling. HRC also determined that the conceptual geologic model is sound, and, in conjunction with drilling results, indicates that mineralization is essentially open in all directions, and is continuous between underground levels and extends to the surface.

Hard Rock Consulting also noted that:

·THMG technical staff has thorough understanding of the geology of the South Mountain Project, and that the appropriate deposit model is being applied for exploration.

·Because the Project is largely located on and surrounded by private land, it greatly simplifies Project approvals compared to mining projects involving public lands.

·Initial metallurgical testing demonstrates that the South Mountain massive sulfide mineralization is amenable to differential flotation and concentration.

·The current mineral resource at the South Mountain Project is more than sufficient to warrant continued planning and development to further advance the Project.





Gold Breccia

HRC also reviewed the data on the anomalous gold-bearing multi-lithic breccia that was identified by THMG conducting reconnaissance work at South Mountain.

In 2010, five holes were drilled in the anomaly for a total footage of 3,530 feet, and 705 total samples taken every five feet of drill hole. Of the 705 samples taken, 686 samples contained anomalous gold, or 97% of the samples. The highest-grade intercept ran 0.038 ounce per ton. HRC reviewed the reports done on the breccia completed by both Kinross and Newmont; of note was Newmont's comparison of the geology to the Battle Mountain Complex in Nevada.

The Technical Report was authored by Ms. J.J. Brown, P.G., SME-RM, Mr. Jeffrey Choquette, P.E., and Mr. Randy Martin, SME-RM, all of Hard Rock Consulting, each of whom is an independent qualified person for the purposes of NI 43-101 The NI 43-101 Technical Report has an effective date of April 7, 2018 and has been filed in Canada on SEDAR in accordance with NI 43-101. The Report can be reviewed on the Company`s website at www.thundermountaingold.com.

Note to United States investors concerning estimates of measured, indicated and inferred resources.

Disclosure of the NI-43-101 has been prepared in accordance with the requirements of Canadian securities laws, including Canadian National Instrument 43-101 ("NI 43-101"), which differ from the current requirements of the U.S. Securities and Exchange Commission ("SEC") set out in Industry Guide 7. The Highlights of South Mountain NI-43-

--------------------------------------------------------------------------------


                                       24

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

101 section refers to "mineral resources," "measured mineral resources," "indicated mineral resources," and "inferred mineral resources." While these categories of mineralization are recognized and required by Canadian securities laws, they are not recognized by Industry Guide 7 and are not normally permitted to be disclosed in SEC filings. United States investors are cautioned not to assume that all or any of measured, indicated or inferred mineral resources will ever be converted into mineral reserves. Under Industry Guide 7, mineralization may not be classified as a "reserve" unless the mineralization can be economically or legally extracted at the time the "reserve" determination is made. "Inferred mineral resources" have a great amount of uncertainty as to their existence and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Disclosure of "contained ounces" in a resource is permitted disclosure under Canadian reporting standards; however, Industry Guide 7 normally only permits issuers to report mineralization that does not constitute "reserves" by Industry Guide 7 standards as in-place tonnage and grade without reference to unit measures. Accordingly, information contained in this 10-K containing descriptions of South Mountain's mineral deposits may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements of Industry Guide 7.

Phase I Drilling at South Mountain under BeMetals Option Agreement

The principal objectives of the Phase 1 work plan at South Mountain were testing the extensions of the mineralized zones and confirmation of the grade distribution of the current polymetallic mineral resource estimate. The Company successfully completed the phase 1 program comprised of 20 underground drill holes for a total of approximately 2,290 meters. Geological logging and sampling of all drill holes have now been completed with all analytical results received. These results have been compiled into the Project's geological database and were used to design the phase 2 drilling program for 2020. Following the phase 2 drilling program, all new results will be integrated into an updated mineral resource estimation for the Project, expected to be completed towards the end of 2021.

Table 1. BeMetal`s Analytical and Assay Results for the Phase 1 Drilling Program





Drill Hole ID, Zone From   To     Core Interval (m) Zn %  Ag    Au   Pb % Cu %
& Interval          (m)    (m)                            g/t   g/t
DMEA Zone
SM19-002
     Interval 1     46.88  57.39  10.51             17.81 226   2.41 1.59 0.16
     Interval 2     67.85  71.63  3.78              5.45  145   8.39 0.58 0.15
     Interval 3     85.83  96.39  10.56             11.42 123   4.43 0.36 0.52

SM19-003
       Interval 1   51.18  75.35  24.17             11.12 267   3.44 3.75 0.29
     Including      51.18  60.78  9.60              11.74 437   5.99 8.68 0.38
     Including      62.09  75.35  13.26             11.77 169   1.88 0.54 0.25
     Interval 2     77.60  81.24  3.64              9.74  331   1.94 1.11 0.34
SM19-005            75.13  86.37  11.23             7.97  128   1.20 0.91 0.24

SM19-006            28.01  43.71  15.70             21.27 147   8.04 0.77 0.30

SM19-007            26.97  39.17  12.20             18.16 122.6 4.41 1.55 0.16

SM19-014
    Interval 1      105.31 120.40 15.09             9.59  127.1 1.50 0.69 0.28
Interval 2          138.07 143.88 5.81              4.88  76.9  2.55 0.21 0.12
Interval 3          155.17 158.95 3.78              14.49 145.5 0.37 0.25 0.48
      Interval 4    184.40 189.56 5.15              0.28  79.9  2.08 0.15 0.06

--------------------------------------------------------------------------------


                                       25

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------


Interval 5 250.65 258.94 8.29  8.11 178.7 0.48 0.57 1.73
Interval 6 266.33 268.16 1.83  1.32 158.9 2.56 0.56 0.11
Texas Zone
SM19-010
Interval 1 24.41  31.62  7.21  4.37 155.2 0.13 0.03 2.07
Interval 2 53.11  63.15  10.04 0.40 135.1 0.07 0.01 1.75

* Note: 1.00 meter (m) is equal to 3.28 feet (ft). One gram per tonne (g/t) is equal to 0.032 ounces per ton (oz/t, or o.p.t.)

Table 2 below shows the latest results received from holes SM19-016, SM19-017 and SM19-018.





Table 2. Drill Holes SM19-016, SM19-017 and SM19-018: Analytical and Assay
Results



Drill Hole ID: Zone From   To     Core Interval (m) Zn %  Ag    Au   Pb % Cu %
& Interval          (m)    (m)                            g/t   g/t
DMEA Zone
SM19-016
     Interval 1     112.33 132.05 19.72†            0.07  8.39  1.52 0.01 0.002
     Interval 2     136.55 146.64 10.09             3.15  151.3 1.68 0.66 0.22
     Interval 3     158.27 163.59 5.32†             0.59  46.8  1.81 0.11 0.04
     Interval 4     184.18 188.64 4.47†             5.04  482.0 4.27 5.80 0.43
     Interval 5     227.32 230.83 3.51              8.85  136.2 0.17 1.25 1.67
MB4 Target Zone
SM19-017
     Interval 1     1.37   5.23   3.86*             12.90 314.1 0.26 0.88 1.08
     Interval 2     16.32  24.08  7.76*             10.23 91.4  0.07 0.36 0.55
SM19-018
     Interval 1     0.00   18.62  18.62*            5.15  73.2  0.11 0.02 0.41
     Including      8.53   18.62  10.09*            8.06  97.0  0.15 0.02 0.68

Note: Reported widths in tables 1 & 2 are drilled core lengths as true widths are unknown at this time. It is estimated based upon current data that true widths might range between 60-80% of the drilled intersection. For drill holes SM19-017* and SM19-018* true widths are unknown as these are the first drill intersections of the MD4 target. Intervals cut offs are based upon visual contacts of massive sulfide units with no more than 1.75 meters of internal skarn. For SM19-010 a nominal 0.5% copper cut off has been applied to determine the boundaries of the intersections for this skarn hosted mineralization with no more than 1.4m of internal dilution. For SM19-016† (intervals 1, 3 and 4) a nominal 0.46 g/t gold cut off has been applied to determine the boundaries of the intersections with no internal dilution. For SM19-017 & 018 a nominal 2.4% zinc cut off has been applied to determine the boundaries of the intersections for this skarn hosted mineralization with no more than 2m of internal dilution. (Note: See details below in QA/QC section). 1.00 meter (m) is equal to 3.28 feet (ft). One gram per tonne (g/t) is equal to 0.032 ounces per ton (oz/t, or o.p.t.).

The above drill holes returned significant intersections of both massive sulfide and skarn styles of mineralization. Important sulfide minerals are pyrrhotite, sphalerite, galena, arsenopyrite and chalcopyrite. During the planned phase 3 campaign at South Mountain, the Company will carry out mineralogy and metallurgical test work studies to confirm historical other previous high-grade results, which will be included in the PEA.

--------------------------------------------------------------------------------


                                       26

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------


                          [[Image Removed: Picture]]

Figure 1: 3D Perspective View inclined at 20 degrees looking north-north-east, showing locations of rib-sampling, priority target zones, and the phase 1 drill holes and highlighted the recent SM19-016, SM19-017 and SM19-018

Underground core drilling is being conducted to extend and upgrade the South Mountain resource - testing the continuity and down-dip extensions of the high-grade polymetallic massive sulfide zones. The Company plans additional core drilling in the DMEA and Laxey zones to complete the confirmation and extensional drilling. In addition, there are plans to retrieve bulk samples for metallurgical test work. More than 15,000 feet (4,500 meters) have been drilled at South Mountain and included in the model. The South Mountain historic ore zones remain open down-dip on the zones encountered. The successful drilling and development work prove that the South Mountain resource continues to grow with potential to increase the resource substantially.

--------------------------------------------------------------------------------


                                       27

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------


                          [[Image Removed: Picture]]

  Figure 2: Plan View of the Sonneman & Laxey Levels, South Mountain Deposit,

   showing locations of rib-sampling, priority target zones, and drill holes
                        SM19-016, SM19-017 and SM19-018

--------------------------------------------------------------------------------


                                       28

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------


                          [[Image Removed: Picture]]

                Figure 3: Plan View of Sonneman & Laxey Levels,

             showing locations of previously reported rib sampling

Underground Pre-Development Work Completed in 2012 thru 2014

The reconstruction of the Sonneman and Laxey drifts continued successfully until January 2014 when the Project went into care and maintenance. The Sonneman Level advanced 2,711 feet from the portal and is constructed to 12 feet by 12 feet for future development and mining. Approximately 350 feet of drift remains to be rehabilitated to reach the historic Texas massive sulfide zone located at the end of the old workings. This advance through this zone will allow for the drill stations and underground drilling to further define the high-grade resource encountered by William Bowes group in the 1980s.

The historic 2,200-foot-long Laxey Level drift has been rehabilitated to 10 feet by 10 feet for approximately 720 feet. At that point the old tunnel had recently collapsed at an intrusive dike and preparations were being made to advance through the caved area. This old tunnel was rehabilitated and accessed along its full length in 2008, at which point it intercepted the Texas massive sulfide zone, one of many that had limited mining during and after the World War II period. Excellent high-grade massive sulfide is exposed in this area, and the core drilling during 2013 proved its continuity between the Laxey Level and the surface, an up-dip distance of nearly 400 feet.

During the development of the Sonneman Level during 2012-2013 several massive sulfide mineralized zones were mined through. Detailed rib sampling along some of these zones yielded the following results:

--------------------------------------------------------------------------------


                                       29

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Highlights from 2013-2014 Rib-Sampling Program

• DMEA Zones 1/2/3; 130 ft. (39.62m) @ 16.76% Zinc ("Zn"), 4.11 ounces per ton ("o.p.t.") (140.91 grams per tonne ("g/t")) Silver ("Ag"), 0.089 o.p.t. (3.08 g/t Gold) ("Au"), 0.78% Copper ("Cu") and 0.38% Lead ("Pb")

• Muck Bay #4 Zone; 23 ft. (7.01m) @ 14.69% Zn, 7.18 o.p.t. (246.17 g/t) Ag, 0.34% Cu and 0.65% Pb

• Laxey Zone; 40 ft. (12.19m) @ 16.44% Zn, 13.97 o.p.t. (478.97 g/t) Ag, 0.020 o.p.t. (0.68 g/t) Au, 0.70% Cu and 0.86% Pb

(Results previously reported in the Company`s annual / quarterly reports; news releases; and the May 2019 independent technical report titled, "National Instrument 43-101 Technical Report Updated Mineral Resource Estimate for the South Mountain Project Owyhee County, Idaho, USA." 1.00 meter (m) is equal to 3.28 feet (ft). One gram per tonne (g/t) is equal to 0.032 ounces per ton (oz/t, or o.p.t.).

Qualified Person - The technical information in this Form 10Q has been reviewed and approved by Larry D. Kornze, Retired, P. Eng., Qualified Person, and Director of Thunder Mountain Gold Inc., and a "Qualified Person" as defined by National Instrument 43-101 standards.

This property is without known reserves and the proposed program is exploratory in nature according to Instruction 3 to paragraph (b)(5) of the SEC`s Industry Guide 7. There are currently no permits required for conducting exploration in accordance with the Company`s current board approved exploration plan.

Trout Creek Project, Lander County, Nevada

The Trout Creek project is a highly prospective gold exploration target located along the western flank of the Shoshone Mountain Range in the Reese River Valley in Lander County, Nevada. The claim package consists of 78 unpatented mining claims (approximately 1560 acres) that are situated along a recognizable structural zone in the Eureka-Battle Mountain mineralized gold trend. Because the project is surrounded by Newmont Mining`s land package, Thunder Mountain struck a joint venture agreement with Newmont Mining on some of their adjoining mineral rights sections and aliquot parcels from 2011 thru 2016. On October 27, 2016, the Company terminated the exploration agreement with Newmont Mining Corporation to concentrate their efforts on the South Mountain Project. The Company retained the 78-claim package by paying annual fees to BLM of $12,090 and Lander County $940 fees.

The Project is located approximately 155 air miles northeast of Reno, Nevada, or approximately 20 miles south of Battle Mountain, Nevada, in Sections 10, 11, 14, 16, 21, 22, 27; T.29N.; R.44E. Mount Diablo Baseline & Meridian, Lander County, Nevada. Latitude: 40 23' 36" North, Longitude: 117 00' 58" West. The property is generally accessible year-round by traveling south from Battle Mountain Nevada on state highway 305, which is paved.

The Trout Creek target is anchored by a regional gravity anomaly on a well-defined northwest-southeast trending break in the alluvial fill thickness and underlying bedrock. Previous geophysical work in the 1980s revealed an airborne magnetic anomaly associated with the same structure, and this was further verified and outlined in 2008 by Company personnel, with consultation from Jim Wright - Wright Geophysics using a ground magnetometer. The target is covered by alluvial fan deposits of generally unknown thickness, shed from the adjacent Shoshone Range, a fault block mountain range composed of Paleozoic sediments of both upper and lower plate rocks of the Roberts Mountains thrust.

An extensive data package on the area was made available to Thunder Mountain Gold by Newmont during the joint exploration agreement period (2011-2016) that significantly enhanced the target area. This, along with fieldwork consisting of mapping and sampling the altered and mineralized structures that can be followed through the Shoshone Range. Of importance is that these structures align with the Cortez-Pipeline deposits and the Phoenix deposit (part of the Eureka-Battle Mountain-Getchell Trend).

In addition to the geologic fieldwork, Wright Geophysics conducted a ground gravity survey and CSMAT over the pediment target area and this provided insight into the gravel-bedrock contact as well as defining the favorable structural setting within the buried bedrock. An untested drill target was identified under the gravel pediment along

--------------------------------------------------------------------------------


                                       30

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

these structures, and the geophysics showed that the bedrock was within 500 feet of the surface, which is reasonable depth for exploration drilling and potential mining if a significant mineralization is encountered.

The Company does not plan to conduct any work on the Trout Creek Property in 2021 because of it`s focus on completing the NI 43-101 PEA at their South Mountain Project.

There are currently no environmental permits required for the planned exploration work on the property. In the future, a notice of intent may be required with the Bureau of Land Management. This property is without known reserves and the proposed program is exploratory in nature according to Instruction 3 to paragraph (b)(5) of the SEC's Industry Guide 7.





Competition

We are an exploration stage company. We compete with other mineral resource exploration and development companies for financing and for the acquisition of new mineral properties. Many of the mineral resource exploration and development companies with whom we compete have greater financial and technical resources than us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford greater geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and development. This competition could adversely impact on our ability to finance further exploration and to achieve the financing necessary for us to develop our mineral properties.





Employees

The Company employs three full-time officers. As part of the BeMetals agreement, the Company allowed these officers to work on the South Mountain Project on a consulting arrangement with BeMetals.





Results of Operations:

For the nine months ended September 30, 2021, the Company recorded a net loss of ($512,536) compared to net income of $1,043,569 for the same period ended September 30, 2020. The net loss realized for the quarter is due to the unrealized loss of $913,942 recognized on the Company's investment in BeMetals, which is carried at fair value compared to a gain of $1,454,058 recognized in the prior year's comparable period. In addition, the company reports an increased gain of $250,000 on the sale of mineral interest in the nine months ended September 30, 2021.

Three-month period comparisons

Total revenue for the three month periods ended September 30, 2021 and 2020 was $325,000, and consisted of $75,000 in management services income and the $250,000 gain on mineral interest pursuant to the BeMetals agreement. Total operating expenses for the three months ending September 30, 2021 of $136,490 increased from the same respective time period in 2020 by $18,744 or 16%. Management and administrative expense increased by $21,235 or 22% to $116,745 compared to $95,510 for the same period last year. Exploration, legal and accounting and depreciation expense remained consistent with the prior year.

Nine-month period comparisons

Total revenues for the nine-month period September 30, 2021 increased $250,000, or 52%, to $725,000 compared with $475,000 in the same period last year, While management service income remained consistent at $225,000 for both years, the gain on mineral interest increased to $500,000 as a result of payments receive pursuant to the terms of the Be Metals option agreement. Total operating expenses for the nine months ending September 30, 2021 of $424,662 decreased from the same respective time period in 2020 by $113,169 or 21%. Exploration expenses remained consistent with the prior year while legal and accounting expenses increased. Legal and accounting costs increased $22,595 to $68,694, an increase of 49%, compared with $46,099 in prior year. The increase is the result of additional legal expenses associated with the amendment to the BeMetals option agreement that was executed during the quarter. Management and administrative expense decreased by $121,496, or 26%, to $341,097 from $462,593 in the prior year due to a reduction in stock compensation expense recognized. The Company has not recognized any stock compensation in the current year compared with $159,740 in 2020 related to the grant of stock options to officers and directors. Depreciation expense continued to decrease as the Company's fixed assets are almost all fully depreciated.

--------------------------------------------------------------------------------


                                       31

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Liquidity and Capital Resources:

The consolidated financial statements for the period ended September 30, 2021, have been prepared under the assumption that we will continue as a going concern. Such assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the consolidated financial statements for the period ended September 30, 2021, the company believes it has sufficient cash reserves to cover normal operating expenditures for the following 12 months.

The liquidity of the Company was enhanced on February 27, 2019, when the Company entered the BeMetals Option Agreement with BeMetals Corp., and BMET USA, a wholly owned subsidiary of BeMetals. Under the terms of the BeMetals Option Agreement, BMET USA will be entitled to purchase 100% of the issued and outstanding shares of SMMI from TMRI, both wholly owned subsidiaries of the Company. The term of the agreement is for two years with BeMetals completing a preliminary economic assessment ("PEA") completed by a mutually agreed third-party engineering firm. Through September 30, 2021, cash proceeds of $1,100,000 and $250,000 in exchange for shares of the Company's common stock have been received. BeMetals also agreed to pay the Company $25,000 per month for management services. In the event that BeMetals decides not to proceed with the South Mountain Project, BeMetals will not be obligated to make any additional payments.

On July 19,2021, management and certain Directors exercised options for 710,000 common shares at a price of $0.10 per share for total proceeds of $71,000 of which $35.534 was for cash and a $35,466 reduction in current liabilities related to advances from related parties for funds advanced by management and foregone wages.

On May 17, 2021, the Company received US $649,557. The shares of 2,000,000 common stock were sold in an arranged transaction through Canaccord Genuity at a price of US $0.325 ($CAD 0.40). Currently, there remains 8,000,000 of BeMetals common stock shares being held at Canaccord Genuity in connection with the BeMetals Option Agreement. (See South Mountain Project above), This sale meets the requirements under the terms of the BeMetals Option Agreement.

In April 2020, the Company received a loan of $48,000 pursuant to the Paycheck Protection Program (the "PPP") under Division A, Title I, Section 1102 and 1106 of the CARES Act. The loan, which was in the form of a promissory note, as amended, dated April 21, 2020, issued by the Company (the "Note"); On October 21, 2020, the Company completed its Paycheck Protection Program (PPP) loan forgiveness application with Washington Trust Bank. On November 07, 2020, the Company received a notice that our loan was paid in full by Small Business Administration, and the PPP loan was forgiven.

The Company has historically incurred losses, however, under the BeMetals Option Agreement, the Company now has a recurring source of revenue, and its ability to continue as a going concern is no longer dependent on equity capital raises and borrowings. However, the Company believes it has the ability to raise capital in order to fund its future exploration and working capital requirements if necessary.

Potential additional sources of cash, include additional external debt, the sale of shares of our stock, or alternative methods such as mergers or sale of 8,000,000 BeMetals common stock shares held by the company. (See South Mountain Project above), No assurances can be given, however, that we will be able to obtain any of these potential sources of cash.

Our plans for the long-term continuation as a going concern include financing our future operations through sales of our common stock and/or debt and the potential exploitation of our mining properties. Our plans may also, at some future point, include the formation of mining joint ventures with senior mining company partners on specific mineral properties whereby the joint venture partner would provide the necessary financing in return for equity in the property.

In addition to the BeMetals Corp. Option Agreement, we believe that the Company will be able to meet its financial obligations because of the following:

·On October 27, 2021, we had $1,140,734 cash in our bank accounts.

--------------------------------------------------------------------------------


                                       32

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

·We do not include in this consideration any option payments mentioned below.

·Management is committed to manage expenses of all types to not exceed the on-hand cash resources of the Company at any point in time, now or in the future.

·The Company will also consider other sources of funding, including potential mergers, the sale of all or part of the Company`s BeMetals Corp. (TSX-V: BMET) common shares beneficially held, and/or additional farm-out of its other exploration property.

For the nine months ended September 30, 2021, the Company reports net cash used by operating activities of $198,863 compared to cash used by operating activities of $206,686 in 2020. During the nine-month period ended September 30, 2021, the Company received $1,149,557 in cash from investing activities, $500,000 from the sale of mineral interests for Tranches 5 and 6 of the BeMetals Option Agreement, and $649,557 in proceeds from sale of 2,000,000 shares of BeMetals common stock. During the period ended September 30, 2021, net cash used by financing activities was $4,274, which included $35,534 in proceeds from the exercise of stock options and $39,808 in payments on related notes payables. The Company reported a net cash increase of $946,420 for the period ended September 30, 2021, compared to a net cash increase of $91,314 for same period in 2020.

Our future liquidity and capital requirements will depend on many factors, including timing, cost and progress of our exploration efforts, our evaluation of, and decisions with respect to, our strategic alternatives, and costs associated with the regulatory approvals. If it turns out that we do not have enough cash to fund our operations, we will attempt to raise additional funds from a public offering, a private placement, mergers, farm-outs or loans.

Additional financing may be required in the future to fund our planned operations. We do not know whether additional financing will be available when needed or on acceptable terms, if at all. If we are unable to raise additional financing, when necessary, we may have to delay our exploration efforts or any property acquisitions or be forced to cease operations. Collaborative arrangements may require us to relinquish our rights to certain of our mining claims.





Contractual Obligations

During 2008 and 2009, three lease arrangements were made with landowners that own land parcels adjacent to the Company's South Mountain patented and unpatented mining claims. The leases were for a seven-year period, with options to renew, with annual payments (based on $20 per acre) listed in the following table. The leases have no work requirements.





                                             Payments due by period
Contractual obligations               Less than 1                       More than 5
                             Total*      year      2-3 years 4-5 years     years
Acree Lease (yearly,         $10,170        $3,390    $6,780         -       $     -
June)(1)
Lowry Lease (yearly,         $33,840       $11,280   $22,560         -       $     -
October)(1)(2)
OGT LLC(3)                   $25,000        $5,000   $10,000   $10,000       $     -
   Total                     $69,010       $19,670   $39,340   $10,000       $     -

(1)Amounts shown are for the lease periods years 12 through 16, a total of 4 years that remains after 2019. Lease was extended an additional 10 years at $30/acre after 2014.

(2)The Lowry lease has an early buy-out provision for 50% of the remaining amounts owed in the event the Company desires to drop the lease prior to the end of the first seven-year period.

(3) OGT LLC, managed by the Company's wholly owned subsidiary SMMI, receives a $5,000 per year payment for up to 10 years, or until a $5 million capped NPI Royalty is paid.





Critical Accounting Policies

We have identified our critical accounting policies, the application of which may materially affect the financial statements, either because of the significance of the financials statement item to which they relate, or because they require management's judgment in making estimates and assumptions in measuring, at a specific point in time, events which will be settled in the future. The critical accounting policies, judgments and estimates which management believes have the most significant effect on the financial statements are set forth below:

--------------------------------------------------------------------------------


                                       33

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

a)Estimates. Our management routinely makes judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution of the uncertainties increase, these judgments become even more subjective and complex. Although we believe that our estimates and assumptions are reasonable, actual results may differ significantly from these estimates. Changes in estimates and assumptions based upon actual results may have a material impact on our results of operation and/or financial condition.

b)Stock-based Compensation. The Company records stock-based compensation in accordance with ASC 718, "Compensation - Stock Compensation" using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

c)Income Taxes. We have current income tax assets recorded in our financial statements that are based on our estimates relating to federal and state income tax benefits. Our judgments regarding federal and state income tax rates, items that may or may not be deductible for income tax purposes and income tax regulations themselves are critical to the Company's financial statement income tax items.

d)Investments. In a joint venture where the Company holds more than 50% of the voting interest and has significant influence, the joint venture is consolidated with the presentation of non-controlling interest. In determining whether significant influences exist, the Company considers its participation in policy-making decisions and its representation on the venture's management committee.

© Edgar Online, source Glimpses