Xtra Gold Resources : Q1 2023 Management Discussion and Analysis (three months ended March 31, 2023)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the interim unaudited condensed consolidated financial statements and results of operations ("MD&A") of Xtra-Gold Resources Corp. ("Xtra-Gold" or our "company") for the three months ended March 31, 2023 and 2022 should be read in conjunction with the interim unaudited condensed consolidated financial statements and the related notes to the company's interim unaudited condensed consolidated financial statements. The following discussion contains forward-looking statements that reflect Xtra-Gold's plans, estimates and beliefs. Our company's actual results could differ materially from those discussed in the forward-looking statements set out herein. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and as contained elsewhere in this MD&A. Our company's condensed consolidated unaudited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles ("U.S. GAAP").Additional information relating to our company, including our consolidated audited financial statements and the notes thereto for the years ended December 31, 2022, 2021 and 2020 and our annual report on Form 20-F, can be viewed on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include but are not limited to those discussed below and elsewhere in our 20-F annual report, particularly in the item entitled "Risk Factors" beginning on page 8 of our 20-F annual report.

Highlights for the Year Ended December 31, 2022

During the three-month period ended March 31, 2023:

• in connection with our gold recovery operations, we produced 854 ounces of raw gold. We sold 1,491 fine ounces of gold at an average price of US$1,682 per ounce.
• cash on hand, excluding restricted cash, increased to $7.3 million at March 31, 2023, from $5.8 million at December 31, 2022.
• On April 27, 2023, Todd Gibson was appointed to the Board of Directors
• a total of 16 diamond core boreholes totaling 2,737 metres were completed by the Company's in-house drilling crews, with drilling efforts targeting the further expansion of the newly developing Boomerang East gold system.
• high-priorityexploration targets generated across the Kibi Gold Project by detailed 3D litho-structural modelling work completed by Tect Geological in mid-February 2023.

Overview

We are engaged in the exploration of gold properties exclusively in Ghana, West Africa in the search for mineral deposits and mineral reserves which could be economically and legally extracted or produced. Our exploration activities include the review of existing geological data, grid establishment and soil geochemical sampling, geological mapping, geophysical surveying, trenching and pitting to test gold-in-soil anomalies and diamond core and/or reverse circulation (RC) drilling to test targets followed by infill drilling, if successful, to define a mineral reserve.

Our mining concession portfolio currently consists of 225.87 square kilometers comprised of 33.65 square kilometers for our Kibi project, 51.67 square kilometers for our Banso project, 55.28 square kilometers for our Muoso project, 44.76 square kilometers for our Kwabeng project, and 40.51 square kilometers for our Pameng project, or 55,873 acres, pursuant to the leased areas set forth in our mining leases.

Technical Disclosure

The hardrock, lode gold exploration technical information relating to our mineral properties contained in this MD&A is based upon information prepared by or the preparation of which was supervised by Yves Clement, P.Geo., our Vice-President, Exploration. Mr. Clement is a Qualified Person as defined by Canadian Securities National Instrument 43-101 concerning standards of disclosure for mineral projects.

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Plan of Operations

Our strategic plan is, with respect to our mineral projects, to conduct an exploration program, consisting of the following: at our Kibi project:

• follow-uptrenching of Zone 1 - Zone 2 - Zone 3 early stage gold shoots / showings to guide future mineral resource expansion drilling efforts;
• prospecting, reconnaissance geology, hand augering and/or scout pitting, and trenching of high priority gold-in-soil anomalies and grassroots gold targets across the extent of the Apapam concession; and
• a diamond core drill program of approximately 15,000 metres, at an estimated cost of $850,000, to be implemented utilizing the Company's in-house operated drill rigs; consisting of a combination of follow up drilling of early stage gold targets and scout drilling of prospective litho-structural gold settings within the mineral resource footprint area; and scout drilling of new grassroots gold targets across the Apapam concession.

at our Kwabeng project:

• ongoing geological compilation, prospecting, soil geochemical sampling, hand augering and/or scout pitting, and trenching to identify and/or further advance grassroots targets; and
• the continuation of placer gold recovery operations at this project (commenced in March 2013);

at our Pameng project:

• ongoing geological compilation, prospecting, soil geochemical sampling, hand augering and/or scout pitting, and trenching to identify and/or further advance grassroots targets; and

at our Banso and Muoso projects:

• ongoing geological compilation, prospecting, soil geochemical sampling, hand augering and/or scout pitting, and trenching to identify and/or further advance grassroots targets; and
• the continuation of placer gold recovery operations at these projects (commenced in 2015);

As at the date of this annual report, we have estimated $500,000 for the cost for soil sampling, hand augering and/or scout pitting, and trenching at our Kibi, Kwabeng, Pameng, Banso and Muoso projects.

As part of our current business strategy, we plan to continue engaging technical personnel under contract where possible as our management believes that this strategy, at its current level of development, provides the best services available in the circumstances, leads to lower overall costs and provides the best flexibility for our business operations. For example, the purchase of an exploration drill as opposed to using contract drillers has generated significant savings to the company.

We anticipate that our ongoing efforts will continue to be focused on the exploration and development of our projects and completing acquisitions in strategic areas. We will look to acquire further interests in gold mineralized projects that fall within the criteria of providing a geological basis for development of drilling initiatives that can enhance shareholder value by demonstrating the potential to define reserves.

We continued with our recovery of placer gold operations at our Kwabeng Banso and Muoso properties in 2022. We contract out as many services as possible on our placer gold recovery operations to local Ghanaians in order to maximize cost efficiencies.

Our fiscal 2023 budget to carry out our plan of operations is approximately $2,350,000 as follows and as disclosed in our 20-F annual report under Item 4.B - Information on Xtra-Gold - Business Overview:

Soil sampling / trenching	$ 500,000
Drilling	850,000
Administration	750,000
Stock-based compensation (non-cash)	250,000
TOTAL	$ 2,350,000

These expenditures are subject to change if management decides to scale back or accelerate operations.

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Our company has historically relied on funds from gold recovery from alluvial operations, equity and debt financings to finance its ongoing operations. Existing working capital, possible debt instruments, further private placements and anticipated cash flow from placer gold recovery operations are expected to be adequate to fund our company's operations over the next year. During the current year and subsequent to 2023, we will not require additional capital to implement our plan of operations.

Trends

Gold prices closed in 2022 at $1,814 per ounce, just above the 2022 average of $1,801 per ounce. Gold prices were strong early in 2022, and fell throughout the year, recording the low for 2022 occurred in November. We saw some price recovery in December and to date in 2023. We continue to see positive indicators for gold prices in the future.

Interest rate increases throughout 2022 strengthened the US dollar as a safe haven, with the value of the US dollar reaching a 20-year peak in September 2022. With the Federal Reserve acknowledging that the disinflation process has commenced, most of the tightening cycle is believed to be completed. As a result, the comparative strength of the US dollar is expected to be reduced in 2023.

Gold does well in times of uncertainty. National, corporate and individual debt levels increase this uncertainty and leave less room to safely manage any potential crisis.

Gold prices per ounce over the year ended December 31, 2022 and previous two years are as follows:

	Q1 2023	2022	2021
High	$ 1,994	$ 2,039	$ 1,943
Low	1,811	1,629	1,684
Average	1,888	1,801	1,800

The tone for the precious metals market in the near future will depend on the U.S. dollar strength. The US Federal Reserve has raised interest rates to combat inflation, and has indicated that the pace of rate increases could slow going forward. The future focus will be on how much economic growth, government deficits and debts affect the ability of the Federal Reserve to increase future rates or shrink its balance sheet. Any further economic wobble or extension of the time to address the underlying issues could create uncertainty about the US economy, which would be good for gold prices.

Overall, a stronger U.S. dollar may lead to reduced interest in the gold exploration sector.

Currently, Covid-19 has not affected any of the Company's operations in Ghana. The first cases of Covid-19 were detected much later in Ghana than other parts of the world, and Government action has limited the incidence of transmission. The Company continues to monitor the potential effects on its operations and is implementing protocol to hopefully help in minimize its impact. However, investors are cautioned this is an evolving issue, and that there is not guarantee the Company's protocols will be effective.

Summary of the last five fiscal years ending December 31

	2022	2021	2020	2019	2018
	$	$	$	$	$
Operating revenues	Nil	Nil	Nil	Nil	Nil
Consolidated pre tax income for the year	1,564,849	2,045,713	2,297,023	2,388,347	1,539,294
Net gain attributable to non-controlling interest	(133,082)	(121,545)	(141,782)	(140,390)	(233,111)
Income tax	(800,000)	(1,088,192)	(294,992)	Nil	Nil
Net gain (loss) Xtra-Gold Resources Corp.	764,849	957,521	1,860,249	2,247,957	1,306,183
Basic and diluted income (loss) attributable to	0.01	0.02	0.04	0.05	0.03
common shareholders per common share
Total current assets	10,178,896	9,127,160	7,739,823	5,438,858	3,258,955
Total assets	11,881,013	10,758,031	9,340,942	6,875,325	4,790,576

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Total current liabilities	1,406,679	1,122,483	426,819		443,540		624,205
Total liabilities	1,406,679	1,122,483	426,819		443,540		624,205
Working capital	8,772,217	8,004,677	7,313,004		4,995,317		2,634,750
Capital stock	46,447	46,688	46,817		45,844		46,246
Total equity	10,474,334	9,635,548	8,914,123		6,431,785		4,166,371
Total Xtra-Gold Resources Corp. stockholders' equity	10,532,448	9,826,744	9,226,864		6,886,308		4,761,284
Dividends declared per share	Nil	Nil	Nil			Nil	Nil
Basic weighted average number of common shares
outstanding	46,542,900	46,779,574	46,645,387		46,095,232		47,089,027
Basic and diluted weighted average number of
common shares outstanding	48,822,024	48,925,574	49,033,887		49,589,430		49,405,027
Summary of Quarterly Results
					Basic and Diluted
		Three Months Ended			Income (Loss) Per
		Net Income (Loss)		Share
			$			$
		March 31, 2022	$	553,197		$ 0.01
		December 31, 2022		(164,659)		(0.00)
		September 30, 2022		(70,252)		(0.00)
		June 30, 2022		(55,360)		(0.00)
		March 31, 2022		922,038		0.02
		December 31, 2021		(739,525)		(0.01)
		September 30, 2021		(664,900)		(0.01)
		June 30, 2021		319,729		0.01

Results of Operations for the Three Months Ended March 31, 2023 as Compared to the Three Months Ended March 31, 2022

Our company reported a net gain after tax for the three months ended March 31, 2023 of $553,197 (March 31, 2022 - gain of $922,038). Our company's basic and diluted gain per share for the three months ended March 31, 2023 was $0.01 (March 31, 2022 - $0.02). Both quarters benefited from gold recovery results.

The weighted average number of shares outstanding was 46,435,928 (March 28, 2023 - 46,625,588). Average shares outstanding were reduced through share repurchases. Average fully diluted shares in Q1 2023 were 49,021,928 (Q1 2022 - 49,021,928), with the difference being in the money stock options and warrants. These items did not materially affect earnings per share.

We incurred expenses of $407,770 in the three-month period ended March 31, 2023 ( March 31, 2022 - $415,993). All expense categories were very similar in the two periods. Exploration expense was up slightly, to $268,761 as compared to $261,411. We expense all exploration costs. Depreciation in Q1 2023 was flat compared to Q1 2022. General and administrative expense in Q1 2023 of $103,228 decreased slightly from $119,120 in Q1 2022.

Exploration activities for the March 2023 quarter continued to focus on the Company's flagship Kibi Gold Project (Apapam Mining Lease) with the continuation of the Zone 3 resource expansion target generation drill program. Sixteen (16) diamond core boreholes totalling 2,737 metres ("m") were completed by the Company's in-house drill crews with drilling efforts primarily targeting the further delineation of the Boomerang East gold system identified in late 2021. Final compilation of the geological and assay result data for the present drilling work is currently in progress. The current Boomerang East drilling forms part of an exploration initiative targeting resource expansion opportunities along the southwestern (Zone 3) segment of the over three-kilometre-long Zone 2 - Zone 3 anticlinal

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fold structure; stretching over one kilometre beyond the limits of the current Mineral Resource Estimate ("MRE") footprint area. Drill results for a total of 90 holes (15,551.5 m) have been reported to date for the ongoing Zone 3 resource expansion drill program initiated following the late July 2021 database close-out date for the current MRE.

Present 3D litho-structural modelling indicates that the Boomerang East gold system is emplaced within the inner arc of a tight, moderate NE-plunging, isoclinally folded diorite body. The mineralization appears to occur as a system of stacked, flat-lying to crescent-shaped,NE-plunging gold shoots occupying the apparent fold hinge of the NE-trending, 1st Order, Zone 2 - Zone 3 anticlinal fold structure. Drilling to date has outlined three (3) principal gold shoots, including the Upper Shoot (s), the Lower Shoot, and the Footwall Shoot, across an approximately 250 m cross-plunge distance. The Lower Shoot, presently the most prominent mineralization shoot of the Boomerang East gold system, has so far been delineated from practically surface to a down-plunge depth of approximately 400 m along the fold hinge structure (approximately 275 m vertical depth from surface), and across an approximately 175 m NW-SE lateral distance.

The Company received the final product of the updated structural analysis of the Kibi Gold Project from Tect Geological Consulting of West Somerset, South Africa, in mid-February 2023. The detailed 3D litho-structural modelling work, encompassing an additional 90 drill holes (15,551.5 m) completed since the database close-out date for the current MRE, in combination with the 3D VTEM / TMI inversion models produced by TechnoImaging LLC of Salt Lake City, Utah, USA, in mid-July 2022, was undertaken to further define the structural controls of the Zone 2 - Zone 3 MRE footprint area gold mineralization and to generate exploration targets across the Kibi Gold Project. Integration of the high-priority exploration targets generated by the modelling work into the project database is currently ongoing.

We did not conduct any exploration activities on our Kwabeng, Pameng, Banso and Muoso projects during the current reporting period.

We recognized gains related to other items of $1,245,913 in Q1 2023 (Q1 2022 - $1,610,300). While gold sales contributed most of the gains in both periods, Q1 2022 also reported a significant gain on our investment portfolio. The gains in both periods were partly offset by foreign exchange losses. During the three-month period ended March 31, 2023, we sold 1,491 fine ounces of gold at an average price of US$1,682 for net proceeds of $1,338,420 (Q1 2022 - 2,017 fine ounces of gold at an average price of US$1,808 for net proceeds of $1,230,149). Gold sales relating to our share of gold is not recognized until the risks and rewards of ownership passed to the buyer. These placer gold recovery operations were contracted to local Ghanaian groups. We pay a 5% government royalty on our gold sales. Using local contractors promotes the local economy while avoiding illegal workings on our projects.

During the three-month period ended March 31, 2023, our company had a foreign exchange loss of $151,108 (Q1 2022 - loss of $122,745) mostly due to strength in the U.S. dollar against the Ghana cedi and the Canadian dollar. The company holds a substantial amount of its investment portfolio in Canadian dollars and this portfolio value weakened with the US dollar strength. In Ghana, the cedi continued to show weakness in the 2023 perod.

Our company recognized a trading and holding loss on marketable securities in Q1 2023 of $20,437 (Q1 2022 - gain of $489,611). Portfolio results in Q1 2023 did not approach the exceptional returns of Q1 2022 as markets pulled back. Unrealized gains and losses reflect mark-to-market changes in the investment portfolio during a period. A realized gain is recognized when securities are sold from the investment portfolio, being the difference between the selling price and the purchase price of the security sold. At the time of the sale, any mark-to-market gain or loss which is related to the security sold, previously recognized in unrealized gains and losses, is reversed.

Other income of $79,038 in Q1 2023 (Q1 2022 - $13,285) mostly relates to interest and dividends on investment portfolio assets.

Recent Capital Raising Transactions

Our activities, principally the exploration and acquisition of properties for gold and other metals, may be financed through joint ventures or through the completion of equity transactions such as equity offerings and the exercise of stock options and warrants.

There were no capital raising transactions in 2023 or 2022.

Liquidity and Capital Resources

We are an exploration company focused on gold and associated commodities and do not have operating revenues; and therefore, we must utilize our current cash reserves, income from placer gold sales, income from investments, funds obtained from the exercise of stock options and warrants and other financing transactions to maintain our capacity to meet the planned exploration programs, or to