Minco Capital : Q3 MD&A

MINCO CAPITAL CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021

This Management's Discussion and Analysis ("MD&A") of Minco Capital Corp. ("we", "our", "us", "Minco Capital" or the "Company") has been prepared by management on the basis of available information up to November 22, 2021, and should be read in conjunction with the condensed interim financial statement and related notes thereto prepared by management for the three and nine months ended September 30, 2021. The Company's condensed interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting of International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. Certain information and notes usually provided in the annual financial statements have been omitted or condensed. Therefore, this MD&A should be read in conjunction with the audited financial statements and related notes thereto for the year ended December 31, 2020.

Except as noted, all financial amounts are expressed in Canadian dollars. All references to "$" and "dollars" are to Canadian dollars and all references to "US$" are United States dollars. Some dollar amounts are rounded to thousands ('000) for discussion purposes.

Additional information of the Company, including our continuous disclosure materials, the audited financial statements and the MD&A, is available under the Company's profile on SEDAR at www.sedar.com. The Company's audit committee reviews the condensed interim financial statements and the MD&A, and recommends approval to the Company's board of directors.

Minco Capital was incorporated in 1982 under the laws of British Columbia, Canada. The Company changed its name from Minco Gold Corporation to Minco Capital Corp. on February 25, 2019. Our corporate office is in Vancouver, British Columbia. The Company's common shares are traded on the TSX Venture Exchange ("TSX-V") under the symbol "MMM" and on the OTCQB Market tier in the USA ("OTCQB") under the symbol "MGHCF".

As at the date of this MD&A, the Company had 47,371,881 common shares and 6,640,000 stock options outstanding.

Table of Contents

1.	HIGHLIGHTS FOR THE PERIOD ......................................................................................................................	2
2.	INVESTMENTS AT FAIR VALUE ....................................................................................................................	2
3.	RESULTS OF OPERATIONS..............................................................................................................................	5
4.	SUMMARY OF QUARTERLY RESULTS .........................................................................................................	8
5.	LIQUIDITY AND CAPITAL RESOURCES .......................................................................................................	8
6.	OFF -BALANCESHEET ARRANGEMENTS ...................................................................................................	9
7.	RELATED PARTY TRANSACTIONS ...............................................................................................................	9
8.	SIGNIFICANT ACCOUNTING POLICIES ........................................................................................................	9
9.	FINANCIAL INSTRUMENTS...........................................................................................................................	10
10. INTERNAL CONTROLS OVER FINANCIAL REPORTING .........................................................................	11
11.	CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION ..............................................	11

(1)

1. Highlights for the period

During the nine months ended September 30, 2021, the Company:

1. acquired common shares and warrants of public companies for a total cost of $1,619,604 and disposed common shares of public companies for proceeds of $332,925 resulting in a realized gain of $116,945.
2. earned $15,373 of the dividend and interest income.
3. received an approval from the TSX Venture for a renewal of the normal course issuer bid ("NCIB") for a term of one year ending March 31, 2022. Under the NCIB program, the Company may acquire up to 2,388,594 shares or 5% of the Company's issued and outstanding shares.
   During the nine months ended September 30, 2021, the Company acquired and cancelled 685,000 common shares of the Company with an original cost of $566,989 for a total payment of $58,260. The difference of $508,729 between the purchase price paid and the original cost was recorded as a credit to retained earnings.
4. The coronavirus ("COVID-19") has slowed down the global economy and caused volatility in the global financial markets. The outbreak of COVID-19 and its impact on the global financial markets has had an adverse effect on the Company's investments. The extent to which COVID-19 may impact the Company's business will depend on the duration of the outbreak, travel restrictions, the effectiveness of actions and vaccine taken to contain and treat the disease. Although it is not possible to reliably estimate the financial impact, the Company's investment value declined $1,389,190 during the nine months ended September 30, 2021.

1.1. Subsequent events

Subsequent to September 30, 2021, the Company acquired additional common shares and warrants of various public companies for a total cost of $200,528 and disposed certain common shares with a total proceed of $46,799.

1.2. Net asset value

As at September 30, 2021, the Company's net asset value was $0.20 per share (December 31, 2020 - $0.23 per share) while the Company's common shares traded at $0.08 per share (December 31, 2020 - $0.07 per share). The Company believes that the market price of its common shares may not reflect their underlying value. Pursuant to the NCIB program, the Company has been repurchasing and cancelling its common shares and believes it is an appropriate use of the Company's funds to benefit all remaining shareholders by increasing their equity interest in the Company.

2. Investments at Fair Value

The fair values of financial instruments with quoted bid and ask prices are based on the price within the bid-ask spread that are most representative of fair value and may include closing prices in exchange markets. The Company considers the closing share price of investments issued by public entities at each reporting date as the fair value. Also, the Company applies the Black Scholes option pricing model to value public companies' share purchase warrants at the reporting date.

The Company has the following investments as at September 30, 2021:

(2)

	Number of Shares/Units Held	Fair value
Equities of public resource companies:	#	$
Top ten resource companies by fair value of common shares
-Minco Silver Corp. (i)	11,000,000	4,125,000
-Amerigo Resources Ltd.	309,000	389,340
-Asante Gold Corp.	333,334	383,410
-Neo Lithium Corp.	50,000	226,500
-Neo Performance Materials Inc.	11,000	193,380
-Global Lithium EFT	1,750	182,499
-Solaris Resources Inc.	16,230	178,692
-Amarillo Gold Corp.	715,000	171,600
-Hudson Resources Inc.	2,117,857	148,250
-Rare Element Resources Ltd.	60,000	130,723
Other common shares of public companies	various	1,981,512
Equities of a private company (EL Olivar) (ii)	400,000	-
Debentures:
-Convertible debenture: IBC Advanced Alloys 8.25%	100,000	94,063
Trust units
-Sprott physical platinum palladium	6,050	108,225
Equity, total		8,313,194
Share purchase warrants	various	423,250
Total		8,736,444

The Company has the following investments as at December 31, 2020:

	Number of Shares/Units Held	Fair value
Equities of public resource companies:	#	$
Top ten resource companies by fair value of common shares
-Minco Silver Corporation (i)	11,000,000	5,830,000
-Hudson Resources Inc.	2,142,857	589,286
-Global X Lithium & Battery ETF	3,500	275,349
-Amerigo Resources Ltd.	309,000	247,200
-Amarillo Gold Corp.	715,000	221,650
-Neo Performance Materials Inc.	11,000	151,580
-Sherritt International Corp.	250,000	102,500
-Solaris Resources Inc.	16,230	98,678
-High Gold Mining Inc.	42,500	95,200
-Orca Gold Inc.	100,000	90,000
Other common shares of public companies	various	787,935
Equities of a private company (El Olivar) (ii)	400,000	-
Debentures:
-Convertible debenture: IBC Advanced Alloys 8.25%	100,000	75,000
Trust units
-Sprott physical platinum palladium	6,050	113,232
Equity, total		8,677,610
Share purchase warrants	various	44,400
Total		8,722,010
(3)

1. As at September 30, 2021 and December 31, 2020, the Company's Investment in public entities includes 11,000,000 common shares of Minco Silver Corporation ("Minco Silver"), which was approximately 18% of Minco Silver's outstanding shares.

Minco Silver holds a 90% interest in the Fuwan silver deposit, situated along the northeast margin of the prospective Fuwan Silver Belt in Guangdong, China and 51% interest in the Changkeng gold project, located contiguous to, and part of the same mineralized system. Further information with respect to Minco Silver may be found at Minco Silver's website, www.mincosilver.ca. The Company has held its investment in Minco Silver since the spin-off of Minco Silver from the Company in 2005.

The change in share price of Minco Silver has a greater impact on the Company's performance than the balance of the portfolio. As at September 30, 2021, the share price of Minco Silver closed at $0.375 per share (December 31, 2020: $0.53 per share) and the fair market value of Minco Silver's 11 million common shares was $4,125,000 (December 31, 2020: $5,830,000), which accounted for 47% of the Company's investment portfolio by the fair value (December 31, 2020: 67%).

1. On December 22, 2016, the Company acquired 5.9% or 400,000 units ("Unit') of El Olivar Imperial SAC ("El Olivar"), a privately held Peruvian corporation, at US$1.00 per Unit through a private placement. Each Unit consists of one Class A voting preferred share and 1.5 Class A share purchase warrant (the "EI Warrant"), with each full warrant entitling the holder to purchase one additional Class A voting share at a price of US$1.00. Such warrants expired in 2019.

One director of the Company is also a director, an officer, and a significant shareholder of El Olivar.

As part of the consideration for the investment in El Olivar, the Company was entitled to receive an annual cash dividend in U.S. dollars equal to 6% of the total invested amount, calculated from the closing date of investment and payable starting on June 22, 2018. However, due to delays in project construction, no dividends have been paid. The Company has not accrued the dividend receivable given that El Olivar has not started its operations and the timing and structure of the initial dividend payment is uncertain.

During 2020, El Olivar restarted design work and initial construction of a tailings processing plant. Due to Covid-19 travel restrictions, plant construction began in Canada with the intention of shipping it to Peru during 2021 or as soon as possible under COVID-19 protocols. EI Olivar intends to raise additional funds in 2021 to complete civil works and installation of the plant.

In accordance with Level 3 of the fair value hierarchy, the Company impaired its investment of $545,293 (US$400,000) in El Olivar as at December 31, 2019. During the nine months ended September 30, 2021, there was no change in management's assessment and this investment remains impaired. As of September 30, 2021, EI Olivar has approximately 7 million shares outstanding.

The continuity of the Company's investments during the nine months ended September 30, 2021 is as follows:

			Proceeds		Unrealized
	December 31,		from	Realized	gains	September
	2020	Additions	dispositions	Gains	(losses)	30, 2021
Investment in public entities:	$	$	$	$	$	$
- Shares and partnership units	8,489,378	1,570,522	(332,925)	116,945	(1,733,014)	8,110,906
- Share purchase warrants	44,400	49,082	-	-	329,768	423,250
Investment in trust units:	113,232	-	-	-	(5,007)	108,225
Investment in convertible
debenture:
- IBC Advanced Alloys Corp.	75,000	-	-	-	19,063	94,063
Total	8,722,010	1,619,604	(332,925)	116,945	(1,389,190)	8,736,444

(4)

The continuity of the Company's investments during the year ended December 31, 2020 is as follows:

			Proceeds
	December 31,		from	Realized	Unrealized	December 31,
	2019	Additions	dispositions	Gains	losses	2020
Investment in public entities:	$	$	$	$	$	$
- Shares and partnership units	9,865,526	685,698	(868,255)	260,788	(1,454,379)	8,489,378
- Share purchase warrants	53,800	25,500	-	-	(34,900)	44,400
Investment in others: Platinum	141,829	-	(144,703)	14,902	(12,028)	-
Investment in trust units	-	134,972	-	-	(21,740)	113,232
Investment in convertible
debenture:
- IBC Advanced Alloys Corp.	95,137	-	-	-	(20,137)	75,000
Total	10,156,292	846,170	(1,012,958)	275,690	(1,543,184)	8,722,010

Details of the Company's net gain (loss) on investments are as follows:

	Three months ended	Nine months ended
		September 30,		September 30,
	2021	2020	2021	2020
	$	$	$	$
Proceeds from disposal	75,072	-	332,925	667,051
Cost of disposal	(75,184)	-	(215,980)	(477,683)
Realized (loss) / gain	(112)	-	116,945	189,368
Change in unrealized loss on investments	(1,256,373)	(395,736)	(1,389,190)	(2,547,656)
Net loss from investments	(1,256,485)	(395,736)	(1,272,245)	(2,358,288)

3. Results of Operations

3.1 Operating result comparison for the three months ended September 30, 2021 and 2020

Three months ended September 30,	2021	2020	Change
	$	$	$
Dividend and interest income	6,454	7,052	(598)
Realized loss from investments	(112)	-	(112)
Unrealized loss from investments	(1,256,373)	(395,736)	(860,637)
	(1,250,031)	(388,684)	(861,347)
Operating expenses	(105,200)	(194,757)	89,557
Foreign exchange gain (loss)	9,878	(28,842)	38,720
Net loss	(1,345,353)	(612,283)	(733,070)

The amount of gain and loss of the investments depends on the performance of the entities that the Company invests in and will fluctuate from time to time depending on many factors, including but not limited to the overall economy, foreign exchange rate, metal prices, which are not controlled by the Company.

For the three months ended September 30, 2021, $1,256,000 of the unrealized loss was adjusted to the market value of investments as at September 30, 2021 compared to its market value as at June 30, 2021. Such unrealized loss adjustment mainly due to the market value of Minco Silver shares decreased by $1,375,000 during the three months ended September 30, 2021, offset by $119,000 of an unrealized gain from various other investments.

For the three months ended September 30, 2020, $396,000 of the unrealized loss from investments was mainly due to the market value of Minco Silver shares dropped by $935,000 as at September 30, 2020 compared to its market value as at June 30, 2020, which offset by $539,000 of an unrealized gain from other investments.

The movement in connection with the operating expenses and foreign exchange gain (loss) is discussed in section 3.1.1 and 3.1.2, respectively, below.

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