Torq Resources : Financial Statements

MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE COMPANY'S CONSOLIDATED INTERIM FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For the three months ended March 31, 2021

Dated: May 27, 2021

TORQ RESOURCES INC.

Management's Discussion and Analysis of the Financial Condition and
Results of Operations for the Three Months Ended March 31, 2021	Expressed in Canadian dollars

1. Operational and corporate highlights for the three months ended March 31, 2021, and up to May 27, 2021
2. • On May 25, 2021, the Company announced it had acquired the option to earn a 100% interest in the Andrea copper porphyry project located in Chile.
   • On April 21, 2021, the Company announced initial results from the ongoing exploration program at the Margarita Project using a ground-based induced polarization (IP) geophysical survey which have outlined two north-northwest trending chargeability anomalies, approximately 3 km by 500 metres (m) in size, which Torq's technical team believes are associated with sulphide mineralization.
   • On April 8, 2021, the Company announced the commencement of work at its Margarita Project. The surface exploration program is focused on defining drill targets with the aim of initiating the first drill program at Margarita in Q3 2021.
   • On April 7, 2021, the Company announced the grant of incentive stock options for the purchase of 420,000 common shares to officers of the Company. The options are exercisable at $0.77 and expire five years from the date of grant.
   • On March 8, 2021, the Company announced it had acquired the option to earn a 100% in interest in the Margarita Project located in Chile.
3. Date of this document

This Management Discussion and Analysis ("MD&A") of Torq Resources Inc. (the "Company" or "Torq") has been prepared by management to assist the reader in assessing material changes in the interim financial condition and results of operations of the Company as at March 31, 2021 and for the three months then ended. This MD&A should be read in conjunction with the condensed consolidated interim financial statements of the Company and related notes thereto as at and for the three months ended March 31, 2021 and 2020. The condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34, "Interim Financial Reporting" using accounting policies consistent with International Financial Reporting Standards ("IFRS" or "GAAP") as issued by the International Accounting Standards Board ("IASB") and Interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC"). Other than as disclosed in the condensed consolidated interim financial statements for the three months ended March 31, 2021, the accounting policies followed in these condensed consolidated interim financial statements are the same as those applied in the Company's most recent audited annual consolidated financial statements for the year ended December 31, 2020. All financial information has been prepared in accordance with IFRS and all dollar amounts presented are Canadian dollars unless otherwise stated.

The effective date of this MD&A is May 27, 2021.

2.1 Forward-looking statements and risk factors

This MD&A may contain "forward-looking statements" which reflect the Company's current expectations regarding the future results of operations, performance and achievements of the Company, including but not limited to statements with respect to the Company's plans or future financial or operating performance, the estimation of mineral reserves and resources, conclusions of economic assessments of projects, the timing and amount of estimated future production, costs of future production, future capital expenditures, costs and timing of the development of deposits, success of exploration activities, permitting time lines, requirements for additional capital, sources and timing of additional financing, realization of unused tax benefits and future outcome of legal and tax matters.

The Company has tried, wherever possible, to identify these forward-looking statements by, among other things, using words such as "anticipate," "believe," "estimate," "expect", "budget", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".

The statements reflect the current beliefs of the management of the Company, and are based on currently available information. Accordingly, these statements are subject to known and unknown risks, uncertainties and other factors, which could cause the

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TORQ RESOURCES INC.

Management's Discussion and Analysis of the Financial Condition and
Results of Operations for the Three Months Ended March 31, 2021	Expressed in Canadian dollars

actual results, performance, or achievements of the Company to differ materially from those expressed in, or implied by, these statements. These uncertainties are factors that include but are not limited to risks related to international operations; risks related to general economic conditions and credit availability; public health crises such as the COVID-19 pandemic and other uninsurable risks; actual results of current exploration activities, unanticipated reclamation expenses; fluctuations in prices of base and precious metals; fluctuations in foreign currency exchange rates, increases in market prices of mining consumables; accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, changes in national and local government regulation of mining operations, tax rules and regulations, and political and economic developments in countries in which the Company operates, as well as other factors. Additional information relating to the Company and its operations is available on SEDAR at www.sedar.comand on the Company's website at www.torqresources.com.

The Company's management reviews periodically information reflected in forward-looking statements. The Company has and continues to disclose in its Management's Discussion and Analysis and other publicly filed documents, changes to material factors or assumptions underlying the forward-looking statements and to the validity of the statements themselves, in the period the changes occur.

Historical results of operations and trends that may be inferred from the following discussions and analysis may not necessarily indicate future results from operations.

3. Description of business

Torq is a junior exploration company focused on the acquisition, exploration and development of mineral resource properties. The Company is incorporated under the Business Corporations Act (British Columbia) and is a reporting issuer in British Columbia, Alberta and Ontario. The Company is listed on the TSX Venture Exchange (the "Exchange") as a Tier 2 mining issuer, and its shares trade under the symbol TORQ.V. On September 18, 2017, the Company commenced trading on the OTCQX under the US symbol TRBMF.

As at the date of this MD&A, the corporate organizational structure of Torq is as follows:

Subsidiary	Place of incorporation	Beneficial
Interest
Stratton Resources (Canada) Ltd.	BC, Canada	100%
Torq Resources Holdings Inc.	BC, Canada	100%
Torq USA Inc.	Nevada, USA	100%
Candelaria Minerals S.A.C.	Peru	100%
Torq Resources Chile SpA	Chile	100%
Minera Margarita SpA	Chile	100%

On May 18, 2021, the Company established a new 100% owned subsidiary, Minera Andrea SpA.

During the latter part of 2020 and into 2021, the Company has been entirely dedicated to project investigation activities and its goal of identifying and acquiring undervalued early stage exploration projects in order to maximize shareholder value. In the latter part of 2020, the Company announced it had focused attention on Chile, and recruited a highly experienced exploration and logistics team in the country with plans to build a portfolio of high potential projects. A key step was achieved in March 2021, when the Company announced it had acquired the option to earn a 100% interest in the Margarita Iron-Oxide-Copper-Gold ("IOCG") project located in Chile, approximately 65 kilometres (km) north of the city of Copiapo. The Company plans to move rapidly to drill stage by conducting geological mapping and geophysical surveying programs at the Margarita project (the "Margarita Project" or "Margarita"), while continuing to add to the Company's portfolio. Furthermore, on May 25, 2021, the Company announced it had acquired the option to earn a 100% interest in the Andrea copper porphyry project located in Chile, approximately 100 km east of the city of La Serena.

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TORQ RESOURCES INC.

Management's Discussion and Analysis of the Financial Condition and
Results of Operations for the Three Months Ended March 31, 2021	Expressed in Canadian dollars

3.1 Ongoing response to COVID-19

The Company continues to actively investigate projects through desktop reviews and continues site visits where appropriate generating several high-potential opportunities to create value for shareholders. The Company is monitoring the COVID-19 situation closely as restrictions are eased, and travel is being utilized where appropriate to support the evaluation of activities in the pursuit of new assets.

3.2 Margarita Project

On March 8, 2021, the Company announced it had acquired the option to earn a 100% interest in the Margarita Project located in Chile, 65 km north of the city of Copiapo. The property is located within the prolific Coastal Cordillera belt. The Company acquired the rights that constitute the Margarita Project through two option agreements: the Margarita claims and the La Cototuda claims.

Under the option agreement the Company can acquire 100% interest in the Margarita claims by making cash payments totalling US$6,200,000 over 66 months. The Company is required to incur work expenditures totalling US$3,050,000 within 30 months of signing the definitive agreement:

				Work expenditures
		Cash payments		requirement
		(US$)		(US$)
Period from signing of the definitive agreement:
Within 60 days (paid on April 23, 2021)	$	50,000	$	-
Within 6 months		50,000		400,000
Within 18 months		100,000		1,150,000
Within 30 months		300,000		1,500,000
Within 42 months		1,200,000		-
Within 54 months		2,000,000		-
Within 66 months		2,500,000		-
	$	6,200,000	$	3,050,000

The claims are subject to a net smelter return ("NSR") royalty of 1.0% with 50% (being 0.5%) buyable for US$2,000,000.

Under the La Cototuda option agreement, the Company can acquire 100% interest in the La Cototuda claims by making cash payments totalling US$900,000 over 36 months as follows:

		Cash payments
		(US$)
Period from signing of the definitive agreement:
Upon signing (paid $63,065 (US$50,000))	$	50,000
Within 12 months		250,000
Within 24 months		250,000
Within 36 months		350,000
	$	900,000

In relation to the option arrangement of the Margarita Project, a finders' fee of 466,667 shares (the "Finders Fee Shares") of the

Company over two years of which 81,250 shares were issued on April 7, 2021, 141,667 shares are to be issued on March 31, 2022, and 243,750 shares are to be issued on March 31, 2023.

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TORQ RESOURCES INC.

Management's Discussion and Analysis of the Financial Condition and
Results of Operations for the Three Months Ended March 31, 2021	Expressed in Canadian dollars

3.3 Andrea Project

On May 25, 2021, the Company announced it had successfully acquired the option to earn a 100% interest in the Andrea copper

porphyry project ("Andrea Project") located in northern Chile, 100 km east of the city of La Serena. The property is located at the

western margin of the Miocene aged El Indio belt that hosts the world class El Indio and Pascua Lama epithermal gold and silver deposits.

The Company acquired the rights that constitute the Andrea Project through three option agreements. Under these option agreements the Company can acquire 100% interest in the project, subject to net smelter return (NSR) royalties, through cash payments as follows:

		Cash payments
		(US$)
Period from signing of the definitive agreement:
Within 60 days	$	105,000
Within 12 months		135,000
Within 24 months		185,000
Within 36 months		300,000
Within 48 months		1,000,000
Within 60 months		4,275,000
	$	6,000,000

The option agreements each include a NSR of 1.5% which is buyable for payments totaling US$3,000,000.

3.4 Exploration and evaluation expenses

The Company is currently exploring and evaluating Margarita. The table below shows the nature of the exploration and evaluation expenses incurred during the three months ended March 31, 2021 and 2020.

		Three months ended March 31,
		2021		2020
Concession holding costs	$	10,123	$	-
Equipment, vehicles, rent and field supplies		1,226		-
Geological consulting, salaries and wages		91,677		-
Project support costs		12,239		-
Travel, meals and accommodation		4,659		-
	$	119,924	$	-

During the first four months of 2021, the Company conducted a ground-based induced polarization (IP) geophysical survey at the Margarita Project which consisted of a total of 49-line km with lines spaced every 250 m. The results of the program have demonstrated two north-northwest trending chargeability anomalies that are approximately 3 km by 500 m in dimension at a threshold of 30 millivolts, which is consistent with the presence of sulphide minerals. Importantly, these chargeability anomalies spatially overlap with resistivity lows that are consistent with hydrothermal alteration and form the basis of geophysical targeting at the project. Torq also recently completed 1:5000 scale geological mapping and has defined two major structural trends, north- northwest and west-northwest. The Company believes these structures control the emplacement of copper oxide mineralization, hydrothermal breccias, intrusive bodies and alteration that is consistent with IOCG/porphyry deposits. The areas of chargeability highs and resistivity lows are aligned in north-northwest structural corridors. Additional data layers of detailed geological mapping and geochemical surveys will complete the targeting process at the project as the Company prepares to drill the project in the third quarter of this year.

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