KWG Resources : MANAGEMENT’S DISCUSSION AND ANALYSIS – QUARTERLY HIGHLIGHTS FOR THE QUARTER ENDED MARCH 31, 2024

K W G R E S O U R C E S I N C .

c.o.b. The Canadian Chrome Company

(An exploration stage company)

M A N A G E M E N T ' S D I S C U S S I O N A N D A N A L Y S I S

• Q U A R T E R L Y H I G H L I G H T S

F O R THE QUARTER ENDED M ARCH 31, 2024

MANAGEMENT'S DISCUSSION AND ANALYSIS

• QUARTERLY HIGHLIGHTS

This Management's Discussion and Analysis - Quarterly Highlights (the "MD&A") should be read in conjunction with the 2023 annual and the interim quarterly financial statements for the period ended March 31, 2024 of KWG Resources Inc. ("KWG" or the "Company") all of which are available on the System for Electronic Document Analysis and Retrieval (`SEDAR+`) and can be accessed through the internet at www.sedarplus.ca. This MD&A - Quarterly Highlights contains forward-looking statements that are subject to risk factors set out in the cautionary note contained herein.

DATE

This MD&A for the quarter ended March 31, 2024, is dated as of May 30, 2024.

COMPANY OVERVIEW

KWG Resources Inc. (CSE: CACR and CACR.A), which carries on business as The Canadian Chrome Company ("KWG" or the "Company") (The Canadian Chrome Company is an Ontario registered business style of KWG), is an exploration stage company focussed on the acquisition of interests in, and the exploration, evaluation and development of, large-scale mineral deposits of chromite and other base metals and minerals.

The Company is participating in and consolidating the acquisition, delineation and development of large-scale mineral deposits, including chromite deposits, approximately 280 km north of Nakina, in the James Bay Lowlands of Northern Ontario, including 1,024 hectares covered by four unpatented mining claims which contain the Black Horse chromite deposit (the "Koper Lake Project") and 1,241 hectares covered by seven unpatented mining claims which contain the Big Daddy chromite deposit (the "Big Daddy Project"). These deposits are globally significant sources of chromite which may be reduced into metalized iron and chrome or refined into ferrochrome, a principal ingredient in the manufacture of stainless steel. KWG has been active in exploring the James Bay Lowlands since 1993 and discovered diamond-bearing kimberlite pipes near Attawapiskat and five pipes near the Ring of Fire area in 1994. This led to the discovery of the McFaulds Lake copper-zinc volcanogenic sulphide deposits in 2002, which precipitated a staking rush that defined the "Ring of Fire".

Bold Ventures Inc. ("Bold") entered into an option agreement with Fancamp Exploration Ltd. ("Fancamp") entitling Bold to acquire up to 100% of the Koper Lake Project. Through a subsequent option agreement (the "Option Agreement") with Bold, KWG obtained the right to acquire: (i) up to an 80% interest in respect of chromite contained in the Koper Lake Project and (ii) up to a 20% interest in respect of the non-chromite minerals contained in the Koper Lake Project. In 2016, KWG became vested in a 50% operator's interest in the Koper Lake Project which KWG renamed the Black Horse Joint Venture (also known as the Black Horse Project). The 50% joint venture interest includes 10% thereof in respect of chromite and 40% in respect of non-chromite minerals, of which Bold (for itself and its co-participant) is the beneficial owner as KWG funded that share of exploration and development expenses as a carried interest recoverable by capital payback from future production.

Through an agreement with Fancamp, on September 1, 2022, KWG acquired all of the rights, title and interests beneficially owned by Fancamp in and adjacent to the "Koper Lake-McFaulds" mineral properties, subject to Bold's rights under the Option Agreement. For Fancamp's interest in the Koper Lake Project plus $1,500,000 in cash received from Fancamp, KWG (a) delivered to Fancamp a secured convertible promissory note (the "Secured Convertible Promissory Note") in the principal amount of $34.5 million (the "Principal Amount"); (b) issued to Fancamp 4,044,453 warrants (the "Consideration Warrants") to purchase multiple voting shares of KWG ("MVS") at an exercise price of $4.6916 per MVS prior to September 1, 2023, at $4.4783 per MVS from September 1, 2023 until August 31, 2024 or at $4.2651 per MVS (the "Base Conversion Price") thereafter until the expiry date of September 1, 2027; and (c) granted to Fancamp a 2.0% net smelter return royalty (one-quarter of which may be purchased by KWG at any time for $5 million and the next one-quarter of which will be

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subject to a right of first refusal in favour of KWG) on any direct or indirect interest in the mining claims held by KWG on and after the closing date (the "Royalty").

The Company also has a 30% joint venture interest in the Big Daddy Project and a 100% interest in 1,033.6 hectares covered by 80 unpatented mining claims (the "Hornby Property") adjoining the southerly boundary of the Big Daddy Project, as well as interests in other mining exploration claims in northern Ontario, most of which are in the Ring of Fire area.

Through Canada Chrome Corporation ("CCC"), a wholly owned subsidiary, the Company has also staked and currently holds numerous mining claims (the "CCC Claims") in Northern Ontario along a 330 km route (the "Transportation and Utility Corridor") from the Ring of Fire area (which includes the Black Horse Project and the Big Daddy Project) to Aroland near Nakina, Ontario where there is access to existing road, railroad and electricity systems that connect to the rest of North America. The CCC Claims were staked in 2009 and 2010 with a view to exploring for, delineating and developing aggregate and other minerals, as well as identifying what KWG believes to be the optimal route for the development and construction of electricity transmission lines to serve the area and a proposed railway, tramway or other form of haulage system. These efforts were also undertaken to assist with Aboriginal consultations including to provide information to affected First Nations communities to help them understand the proposed projects and how those and other projects would affect the communities' asserted and established Aboriginal and treaty rights.

Following staking the CCC Claims, CCC undertook airborne surveys, drilling and other exploration activities over the CCC Claims, spending approximately $16.8 million on such activities and, although

1. did not discover any base metal or precious metal deposits, it did identify numerous prospective deposits of aggregate at various locations within the CCC Claims along the Transportation and Utility Corridor.

In and around that time, Cliffs Chromite Far North Inc. and its affiliates ("Cliffs"), participants in the Big Daddy and other mineral interests in the area, filed an application under the Public Lands Act (Ontario) (the "Public Lands Application") for an easement or right-of-way along much of the same route as the Transportation and Utility Corridor and over parts of the CCC Claims for the development of mines in the Ring of Fire area including the transportation of mine production to existing railroad systems in the Nakina area. Through various affiliates, Cliffs also filed applications under the Aggregate Resources Act (Ontario) for approximately 120 permits for authorization to extract aggregate from pits and quarries along the route. CCC contested the Public Lands Application seeking recognition of CCC's superior pre-emptive rights under the Mining Act (Ontario) to obtain surface rights for access over those lands, other Crown lands and third party lands for the development of mining activities. In conjunction with the foregoing, in 2012, CCC filed 32 applications under the Aggregate Resources Act (Ontario) for permits for a series of aggregate pits and quarries located in various places all along the

1. Claims from the south end near Nakina to the north end near the Ring of Fire area for the extraction of aggregate at various locations along the full length of the route to provide local sources of aggregate with minimized shipping costs for, among other uses, the development of transportation and electricity transmission facilities along the route of the Transportation and Utility Corridor.

After a series of hearings and appeals, it was ultimately determined that Cliffs had the right to apply for such an easement or right-of-way but such surface rights could only be granted with CCC's consent or, after a hearing on notice to CCC to give CCC an opportunity to oppose and/or seek terms and conditions, subject to such terms and conditions as may be ordered accordingly. Following those rulings, Cliffs did not pursue its Public Lands Application and, after CCC demanded and obtained an opportunity to review Cliffs' applications for aggregate permits, Cliffs withdrew its aggregate permit applications, leaving CCC with the CCC Claims and its 32 aggregate permit applications. Eventually, Cliffs sold its interests in the Ring of Fire area. On the other hand, KWG continues to hold interests in

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the Koper Lake Project and the Big Daddy Project and CCC continues to hold both mineral exploration claims along the route and CCC's 32 aggregate permit applications.

With those results, a number of principal objectives of KWG having CCC stake the CCC Claims was fulfilled - (i) to identify what KWG believes to be the optimal route for transportation and electricity transmission facilities to serve the Ring of Fire and communities of the area, (ii) to identify local sources of aggregate along the route for the development of those facilities and (iii) to ensure that

1. has the right to receive notice of and to participate in any applications for surface rights over the route. As well, the process confirmed that, with KWG holding interests in the Koper Lake Project and Big Daddy Project, KWG has the same rights as Cliffs had to make applications under the Public Lands Act (Ontario) for surface rights between its mining properties in the Ring of Fire and existing road, railroad and electricity systems in the Nakina area that connect to the rest of North America.
   In addition to seeking to identify mineral and aggregate resources along the CCC Claims, a benefit of CCC holding those claims was to maintain superior surface rights under the Mining Act (Ontario) - the usefulness of which was borne out in the litigation and other forms of contests with Cliffs a decade ago as described above. However, in the intervening years, the Ontario government withdrew that area from further staking under the Mining Act (Ontario) so no new claims could be staked in that area, although existing claims, including the CCC Claims, continued to be valid. Accordingly, even if CCC were not to hold all of those CCC Claims, no one else could stake mining claims over any part of the area, including the area covered by the aggregate permit applications, to gain such superior surface rights over those proposed pit and quarry locations covered by CCC's aggregate permit applications.

Moreover, so long as CCC holds a few strategic claims along the route, CCC would have the right to receive notice of any applications by any third parties for surface rights over those strategic claims and

1. would have the opportunity to negotiate with those third parties or, through the hearing process regarding those surface rights applications, seek an order to include terms and conditions for access and other rights for CCC and KWG regarding use of the surface and extraction of the aggregate. As well, KWG continues to have the right pursuant to the Mining Act (Ontario) to apply on its own under the Public Lands Act (Ontario) for surface rights between its mining properties in the Ring of Fire and the existing road, railroad and electricity transmission systems in the Nakina area that connect to the rest of North America.

For more than a decade, KWG has been advocating concepts of utilizing the CCC Claims and the transportation and utility systems like those proposed to be developed on the CCC Claims along the Transportation and Utility Corridor for the benefit of the local communities and sharing with the affected First Nations of the benefits and ownership of the Ring of Fire's mineral resources. To pursue these concepts, the Company continues its consultations with elders and current and former leaders of First Nations in the James Bay Lowlands area which includes the Ring of Fire where its principal mineral assets are located.

In addition to its mineral claims and aggregate permit applications, KWG has also acquired intellectual property interests, including a method for the direct reduction of chromite to metalized iron and chrome using natural gas and an accelerant. KWG subsidiary, Muketi Metallurgical LP, has acquired two chromite-refining patents in Canada and one in each of the USA, Kazakhstan and South Africa and is prosecuting an application in Turkey.

HIGHLIGHTS

During and subsequent to the quarter ended March 31, 2024:

On May 13th the Company announced a proposed private placement of up to $2 million of Series CD- 2024 convertible debentures (the "Debentures"). The Debentures will be (a) repayable at the Company's option at any time in whole or in part in cash on not less than 30 days' notice or (b)

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convertible into units (each a "Unit") (i) at the Company's option at any time after the first anniversary of the date on which the first Debenture of the Series CD-2024 Debentures is issued (the "Date of First Issuance") or (ii) at the holder's option at any time prior to payment in cash, in either case by the issuance of Units at a deemed value of $1.20 per Unit. The Debentures will mature March 31, 2028 (the "Maturity Date") and bear interest at 5% per annum, accruing daily, compounding annually on March 31 of each year and payable on each such March 31 anniversary date and at the Maturity Date or conversion. Payments of interest may, at the Company's option, be made either (i) by payment in cash (other than in the event of a conversion) or (ii) by the issuance of Units at a deemed value of $1.20 per Unit. Each Unit will be comprised of one (1) CACR.A multiple-voting share and one (1) share purchase warrant enabling its holder to acquire one further CACR.A multiple-voting share from treasury upon payment of $1.20, exercisable at any time on or before the earlier of (i) March 31, 2029 or (ii) two (2) business days after completion of a take-over bid or a merger, amalgamation, arrangement or other form of business combination as a result of which the shareholders of the Company immediately prior to such bid or business combination do not own a majority of votes attaching to the voting securities of the Company or of the resulting issuer or do not have the power to elect a majority of the directors of the Company or of the resulting issuer, as the case may be, after completion of such bid or business combination. Pursuant to the terms of the Debentures, holders will be paid a premium equal to 20% of the original principal amount, payable immediately following issuance of the Debentures by the issuance of Units with a deemed value of $1.20 per Unit. Each subscriber for Debentures must be an "accredited investor" within the meaning of applicable securities laws or otherwise qualify to purchase Debentures on a prospectus-exempt basis in accordance with applicable securities laws. The proceeds of the distribution of Debentures will be used to fund the Company's business focused on the acquisition of interests in, and the exploration, evaluation and development of, large scale mineral deposits of chromite and other base metals and minerals including, without limitation, funding the Company's overhead and operating expenses and the costs of this private placement. The Company will pay finder's fees of up to 5% of the aggregate amount of Debentures purchased by subscribers referred to the Company by finders entitled to receive such fees in accordance with applicable securities laws, which fees will be payable in Units at deemed price of $1.20 per Unit. All of the securities to be issued pursuant to this private placement will be subject to a four (4) month hold period.

OUTLOOK

The purchase of all of the rights, title and interests beneficially owned by Fancamp in and adjacent to the "Koper Lake-McFaulds" mineral properties (also known as the Black Horse Project), located within the "Ring of Fire" in the Province of Ontario, advances the consolidation and ownership and control of the chromite interests in that property. Although Bold and its participants continue to hold a small interest in the Black Horse Project, those efforts toward consolidation should make the project more attractive to investors and should facilitate the further exploration and development of the project.

KWG was invited on August 9, 2019, by the Canadian Environmental Assessment Agency (the Agency) to comment on its acceptance of a Project Description for the Marten Falls Community Access Road Project (the Project) submitted by Marten Falls First Nation (the proponent), to which the Company made the following response:

To ensure the economic feasibility of our interests in the chromite discoveries in the Ring of Fire in northern Ontario (by enabling their access to markets), we staked contiguous claims from locations near Nakina, Ontario, to the Ring of Fire, which was completed prior to the Far

North Act's promulgation. Our consent to the use of those claims will be forthcoming to any

application that enhances and does not frustrate that purpose. The Supreme Court of Canada

declined to interfere with the Ontario Court of Appeal's finding that we may not withhold

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consent to uses not offending our rights under the Mining Act, leaving intact the requirement for our consent to uses which could offend our rights under the Mining Act.

To properly assess that purpose, it is imperative for you to fully understand the results of the research undertaken by CanmetMINING and a study completed for us by China Railway First Survey & Design Institute Group (FSDI) relating to the economics of constructing and operating a railroad line on our claims from Nakina to the Ring of Fire in connection with development of chromite mines in the Ring of Fire.

The prospect for the development of these mines will provide for you important parts to an understanding of the global economic context of the rationale for Ontario providing the Webequie First Nation with a road to them, and the Marten Falls First Nation with bridges across the Ogoki and Albany Rivers for a road link south to Ontario's transportation network, in addition to the ostensible utility for the inhabitants of those communities.

That context is absent from the material filed to date.

Without that holistic context, your consideration of the Project is missing a significant and substantive reason, not being completely informed of an ultimate goal of these disparate and uncoordinated activities that may appear otherwise to be economically unsound but, with that holistic context, have a sound economic basis.

That substantive reason should absolutely command your consideration of the Project, in our view. That substantive reason is that Canada has been demonstrated to host in the Ring of Fire in northern Ontario an extremely high-grade and very thick chromite mineral occurrence of historic proportions which may be beneficiated to supply ferrochrome to a global market for many, many years, even generations and, with our country's wealth of natural gas, be able to do so at a tremendous cost advantage. Only your agency can properly weigh the profound economic imperative that these national endowments may visit on the global order for the benefit of many generations. Only your agency can rationally balance that international strategic currency of our land and people in considering the effect of its exploitation on its locale's society and biosphere.

Responsible extrapolations from available data suggest that, at current metal prices, there is a staggering value of chromium in situ in the Ring of Fire, that the FSDI railroad design can deliver from it, quantities greater than 100% of the world's present chromium consumption, and that a Canadian gas reduction patented process can produce ferrochrome from those deposits at significantly lower cost than all other sources.

As the world's nascent preference for non-corroding steel increasingly displaces corroding steels in rebar, structural steel and other aspects of infrastructure and building construction, Canada's chromium can become a most important international trade commodity. How that may occur, and the international trade considerations that will accompany that, must form part of your consideration.

These developments, combined with previously published resource estimates, support management's opinion that the chromite deposits of the Ring of Fire may have a very long combined production life. Management believes that this will enable the depreciation and amortization of the cost of an infrastructure asset such as a railroad, tramway or utility corridor over a very long time. When that

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term is combined with the present historic low cost of the capital required to construct such an undertaking, the unit cost for projected usage can be quite modest when compared to all available alternatives. The test work done to date on the conversion of the Black Horse chromite into a metalized chrome and iron alloy using natural gas continues to encourage KWG's management that an opportunity to create a substantial and globally significant export industry in this key industrial commodity appears achievable. In this context, the creation of the Canada-USA Critical Minerals Task Force can be anticipated to bring attention to not only this export potential, but also to the capacity of these domestic resources to guarantee Canadian and United States national security in chromium and its alloys.

In July, 2021, KWG and its subsidiary, CCC, (a) engaged Rail-Veyor Technologies Global Inc. for the preparation of a design engineering feasibility proposal to construct an ore haulage system to facilitate the direct transport of mine production from underground, across the surface of mining claims staked and assessed in part for that purpose by CCC along a 330-kilometer corridor from the Company's Black Horse project and Big Daddy project area to Aroland (near Nakina, Ontario) where there are road and rail systems that connect to the rest of North America and (b) engaged Cormorant Utility Services Ltd. for the preparation of a design engineering feasibility proposal to construct electrical power transmission lines along the same corridor from Aroland (where there are electrical transmission lines that are part of the Ontario power grid) to the Ring of Fire including transmission lines connecting to several contiguous remote communities.

The power line proposal enabled the Rail-Veyor ore haulage proposal to be prepared on the basis of electricity being supplied at Hydro One power-grid electricity rates, rather than the very-high-costdiesel-generated alternative. The Rail-Veyor ore haulage system will facilitate the direct transport of chromite and other ores from proposed underground mines in the Ring of Fire area, across the surface of mining claims staked and assessed for that purpose by CCC along a distance of 330 kilometers to Aroland (near Nakina, Ontario) where there is access to existing railroad systems that connect to the rest of North America.

In accordance with KWG's instructions, the study of the proposed electricity system was designed to include transmission lines connecting the Ontario Power Grid to several remote communities in the area, as well as to the Ring of Fire area. The transportation study also provides a base for opportunities to expand the transportation facilities to not only move mining production out of the Ring of Fire area but also to move materials and equipment into both the Ring of Fire area and indigenous communities of the area and to include moving people by rail or by road into and out of both the Ring of Fire area and the indigenous communities of the area. These studies were designed and have been used to assist with Aboriginal consultations by providing information to help affected First Nations communities understand and consider KWG's proposed projects in the Ring of Fire and how those projects might affect the communities' asserted and established Aboriginal and treaty rights as part of the consultation process.

KWG is very pleased to see the discovery areas directly affected First Nations continue to propound the Environmental Assessments for the transportation infrastructure which, in addition to servicing local communities, is needed for development of the resources in the Ring of Fire area. KWG's management is also very encouraged that the support for the development previously pledged by the governments of Ontario and Canada is now being acted on by the Province of Ontario to underwrite the planning cost of community access roads and a proposed link between them.

In that regard, the Company has proposed that utility corridor assets may be sold to and vested in a trust or other entity for the benefit of members of affected indigenous communities of the area in order that those utility assets can be operated by and for the beneficiaries whose traditional territories host this infrastructure so the provision of this Ring of Fire's mining transportation and electrification requirements can become a substantial and independent indigenous enterprise whose revenues can

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be used to further develop infrastructure and services for the communities of the area.

KWG's wholly owned subsidiary, CCC, continues to hold the mineral exploration claims along the route which it believes is best suited for the transportation facilities and electrification systems to connect the Ring of Fire area and several First Nations communities in the James Bay Lowlands to the road and railroad systems passing through Nakina and the Ontario power grid also passing through Nakina. CCC also continues to have 32 aggregate permit applications in place for the planned production of aggregate at various locations along that route for the construction of such transportation and electrification systems and other infrastructure developments to serve the local communities. As the electrification and transportation studies were prepared to assist with Aboriginal consultations by providing information to help affected First Nations communities understand and consider KWG's proposed projects in the Ring of Fire and how those and other projects might affect the communities' asserted and established Aboriginal and treaty rights as part of the consultation process, KWG believes that the cost of those studies should qualify for assessment credits with the Ministry of Mines to extend the life of CCC's mineral exploration claims, some of which would otherwise expire at various times throughout this current year. However, there is some doubt whether those costs will be accepted by the Ministry on that basis. To address such possibilities, CCC has requested that some of the CCC Claims which require additional assessment credits to extent their continuity be placed on hold without the requirement to file annual assessment credits. However, as noted above, even if that request is not successful and some of those CCC Claims are lost due to the lack of exploration assessment credits, their utility has been fulfilled, including to identify and, though aggregate permit applications, make available local sources of aggregate along the proposed utility corridor. As well, other CCC Claims will continue into future years and, accordingly, will require that notice be given to CCC of any applications for surface rights over them.

Selected Consolidated Financial Information(1)

As at and for the years ended
December 31	2023	2022	2021
Summary Operating Results Data	$	$	$
General and administrative expenses	4,669,060	4,192,888	2,945,968
Loss from operations	(14,352,180)	(38,370,977)	(14,751,544)
Net loss for the year	(14,323,386)	(35,269,253)	(14,884,427)
Loss per share	(0.01)	(0.02)	(0.01)

Summary Balance Sheet Data	$	$	$
Cash	310,473	921,680	1,825,789
Receivables	60,928	423,329	187,361
Total current assets	415,705	1,359,927	2,013,150
Total assets	551,733	1,462,969	2,081,874
Trade and other payables	4,512,691	3,545,265	2,158,734
Long-term liabilities	26,395,083	23,204,108	1,047,147
Total equity (deficiency)	(31,404,399)	(26,217,856)	(1,968,796)

1. This financial information has been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. The Corporation's presentation and functional currency is the Canadian dollar.

OVERALL PERFORMANCE - FINANCIAL

During the first quarter of 2024, the Company continued to utilize the proceeds of the convertible debenture financing from April, May and June 2023, which injected $1,008,000 of cash and converted $80,590 of payables into convertible debentures. KWG's exploration activities and operating costs were funded from the proceeds of this cash inflow. This cash inflow, together with the settlement of payables by issuing convertible debentures, was also utilized to reduce the Company's liabilities. The Company's other cash inflow consisted of a royalty payment of $781.

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Regular operating expenditures for general and administrative expenses in the first quarter of 2024 were approximately $294,000 lower than the first quarter of the previous year as the Company consciously reduced its spending based on its existing cash flow.

The Company has maintained its focus on its strategic plan to develop what it expects will become a major North American ferro-chrome source of supply to the globe's stainless-steel makers, as well to assess the construction of (a) a haulage system to transport mine production from the mine site and materials to the mine site and (b) an electrical power transmission system to serve the transportation system, the mine site and several contiguous remote communities.

KWG believes that its infrastructure project has been well-timed and the need for such facilities in the Ring of Fire is increasingly appreciated to be potentially very economic. Meetings with government and First Nations' officials are ongoing to determine a mutually beneficial result. As well, KWG continues to explore the available funding mechanisms that can be employed to continue development of the transportation and utility link to the Ring of Fire.

Although exploration activities on the mineral deposits in the Black Horse Project and the Big Daddy Project were not progressed very much in the last few years, that has recently changed with the Company engaging Quantec to undertake and report on a magnetotelluric survey completed in the first quarter of 2023 over portions of the Company's Black Horse chromite project in the Ring of Fire area of northern Ontario. The report and its graphic presentations enable readers to assess the findings of the magnetotelluric survey and the targets for future mineral exploration identified in the report. The results of the magnetotelluric survey also enable the Company's professional advisors to develop three-dimensional representations of previously discovered chromite resources and newly identified mineral exploration targets for chromite mineralization.

The reporting currency of the Company is Canadian dollars and the financial data is reported in this currency.

LIQUIDITY & CAPITAL RESOURCES

The main sources of financing for KWG have been the issuance of equity shares and convertible debentures and the sale of non-core assets, although the Company also received some funds from Fancamp in connection with the Company's acquisition of Fancamp's interests in the Koper Lake- McFauld's property in September 2022. Each of KWG's projects has demonstrated sufficient evidence of geological merit to warrant additional exploration. However, it is not presently possible to estimate the cost of further exploration programs, which may or may not bring individual properties to a subsequent stage of development, since they are all exploration projects and their development depends on the results of exploration and infrastructure.

On March 31, 2024, the Company had a working capital deficiency of $5,608,525 ($5,145,344 as at December 31, 2023). It had $143,016 in cash as at March 31, 2024 ($310,473 in cash as at December 31, 2023). The decrease in cash and the corresponding increase in the working capital deficit are attributable to normal operating expenses, as well as professional fees and other costs associated with its purchase of Fancamp's interests in the Koper Lake-McFauld's property.

Interest payments due to Fancamp under the terms of the Secured Convertible Debenture were paid by issuing MVS to Fancamp. An interest payment of $510,411 due on November 30, 2022 was paid by issuing 159,783 MVS at $3.1944 per share, an interest payment of $510,411 due on February 28, 2023 was paid by issuing 175,525 MVS at $2.9079 per share, an interest payment of $521,753 due on May 31, 2023 was paid by issuing 208,259 MVS at $2.5053 per share, an interest payment of $521,753 due on August 31, 2023 was paid by issuing 227,343 MVS at $2.295 per share, an interest

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payment due on November 30, 2023 was paid by issuing 332,213 MVS at $1.553 per share and an interest payment due on February 29, 2024 was paid by issuing 344,100 MVS at $1.50 per share.

The Company forecasts operating expenditures of approximately $3,500,000 for 2024. Due to the funds raised through the convertible debenture issuances in April, May and June 2023, the Company had sufficient working capital to finance its corporate and administrative activities through the first two quarters of 2024 with accommodations from service providers, contractors, employees, creditors and others to assist the Company with respect to its current cash requirements. The Company expects to raise additional funds through further equity and/or debt financings, receipt of funds from the exercise of outstanding share purchase warrants and stock options or the sale of non-core assets to cover its working capital requirements and longer term costs and exploration activities.

The Company is in the process of exploring its exploration and evaluation projects and has not yet determined whether its exploration and evaluation projects contain mineral deposits that are economically recoverable. The Company is also in the process of pursuing patents on its chromium alloy technology in several countries and preparing for the commercialization of that technology. The Company will periodically have to raise additional funds to continue its exploration and other activities and, while it has been successful in doing so in the past, there can be no assurance it will be able to do so in the future. Unless the holders of convertible debentures and a convertible promissory note issued by the Company exercise their conversion rights to convert such liabilities into equity, the Company will also have to raise additional funds to repay its debenture and promissory note obligations when they come due and, while many convertible debentures have been converted into equity in the past, there can be no assurance that the holders of those compound financial instruments will convert into equity or that the Company will be able to raise sufficient additional funds in a timely way at the applicable time.

Until it is determined that properties contain mineral reserves or resources that can be economically mined, they are classified as exploration and evaluation properties. The recoverability of the amounts expended on the Company's exploration and evaluation projects is dependent upon: the discovery of economically recoverable reserves and resources; securing and maintaining title and beneficial interest in the properties, including through exploration expenditures to meet annual assessment credit requirements; the ability to obtain necessary financing to complete exploration, development and construction of mining and processing facilities; consultations with affected First Nations; obtaining certain government approvals; and attaining profitable production.

There is no assurance that the Company will be successful in obtaining further financing or continuing accommodation and support from service providers. Should the Company not be able to obtain the necessary financing and support, there would be significant doubt as to the ability of the Company to meet its obligations as they come due and, accordingly, the appropriateness of the use of accounting principles applicable to a going concern.

RESULTS FROM OPERATIONS

During the first quarter of 2024, the Company recorded a loss of $1,611,100 ($0.00 per share) compared to a loss of $5,687,246 ($0.00 per share) for the same period in 2023. Included in these results are non-cash expenditures of $1,187,318 ($4,838,582 in 2023). The period results are explained as follows:

Income

Other income totaled $781 in the first quarters of both 2024 and 2023.

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