Minco Silver : MD&A

MINCO SILVER CORPORATION

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 Silver Corporation ("we", "our", "us", "Minco Silver" or the "Company") has been prepared by management on the basis of available information up to November 12, 2021, and should be read in conjunction with the Company's condensed consolidated interim financial statements and related notes thereto prepared by management for the three and nine months ended September 30, 2021. The Company's condensed consolidated 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 consolidated 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 "$" and "dollars" are to Canadian dollars, all references to "US$" are United States dollars and all references to "RMB" are Chinese Renminbi. Some dollar amounts are rounded in thousands ('000) for discussion purposes.

Additional information regarding the Company, including our continuous disclosure materials, the audited consolidated financial statements, MD&A and Annual Information Form ("AIF"), which contain extensive disclosure of the history and properties of the Company, are available under the Company's profile on SEDAR at www.sedar.com.

This MD&A contains forward-looking information that is subject to risk factors set out in a cautionary note contained in the Company's MD&A. The Company's audit committee reviewed the consolidated financial statements and MD&A, and recommended approval to the Company's Board of Directors.

Refer to Note 3 of the audited consolidated financial statements for the year ended December 31, 2020 for details of the Company's significant accounting policies.

Minco Silver (TSX: MSV) was incorporated under the laws of British Columbia, Canada on August 20, 2004. Minco Silver is engaged in the acquisition, exploration and development of precious metals mineral properties and projects.

As at September 30, 2021, the Company had the following Chinese subsidiaries: Minco Investment Holding HK Ltd. ("Minco HK"), Minco Resource Limited ("Minco Resources"), Minco Mining (China) Co. Ltd. ("Minco China"), Changfu Minco Mining Co. Ltd., ("Changfu Minco"), Tibet Minco Mining Co. Ltd. ("Tibet Minco"), and its 51% interest in Mingzhong Mining Co. Ltd. ("Mingzhong"). Changfu Minco is subject to a 10% net profit interest held by Guangdong Geological Bureau ("GGB") and the Company.

At the date of this MD&A, the Company has 61,025,083 common shares and 7,333,000 stock options outstanding.

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Table of Contents
1.	Highlights for the Period ....................................................................................................................................................................	3
2.	Exploration and Project Development Activities .......................................................................................................................	3
3.	Results of Operations...........................................................................................................................................................................	5
4.	Summary of Quarterly Results .........................................................................................................................................................	9
5.	Liquidity and Capital Resources ......................................................................................................................................................	9
6.	Off-BalanceSheet Arrangements ..................................................................................................................................................	10
7.	Transactions with Related Parties..................................................................................................................................................	11
8.	Critical Accounting Estimates and Judgments ..........................................................................................................................	12
9.	Significant Accounting Policies .....................................................................................................................................................	12
10.	Financial Instruments ........................................................................................................................................................................	12
11.	Risks Factor and Uncertainties .......................................................................................................................................................	14
12.	Disclosure Controls and Procedure and Internal Controls over Financial Reporting ...................................................	14
13.	Cautionary Statement of Forward Looking Information........................................................................................................	15

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1. Highlights for the Period

During the nine months ended September 30, 2021:

1. The Exploration Permit for the Fuwan Silver Project, the Luoke-Jilinggang exploration permit, was renewed in March 2021 for five years with an expiry date of March 8, 2026.
2. The Note receivable from Longxin Mining Co., Ltd. ("Longxin Mining") was due on March 31, 2021. In April 2021, Minco China entered into a legal service agreement (the "Anheli Service Agreement") with Beijing Anheli Law Firm ("Anheli") for a legal action to recover the outstanding Note principal and accrued interest. On May 11, 2021, the Company filed a lawsuit to the court for legally freezing the Note collaterals and recovering $10,918,704 (RMB 55,424,433) of the outstanding Note principal plus $629,085 (RMB 3,253,625) of interests accrued up to April 1, 2021 at an annum interest rate of 24% for the period between January 1, 2020 and August 19, 2020 then at 15.4% of an annum interest rate thereafter.
   As at September 30, 2021, the outstanding Note principal was $10,918,704 (RMB 55,424,433) ($9,589,148 (RMB 49,200,000) was recorded as at December 31, 2020) and the accrued interest receivable was $1,495,722 (RMB 7,592,434) ($283,880 (RMB 1,456,533) was recorded as at December 31, 2020), as a result of $1,329,556 (RMB 6,224,433) payments received by the Company in 2020 now offset the accrued interest first instead of the principal first. In addition, the annum interest rate was changed from 12% to 24% for the period between January 1, 2020 and August 19, 2020 then at 15.4% of annum rate thereafter as claimed in the Company's court filing.
   Pursuant to Anheli Service Agreement, the Company paid $58,005 (RMB 300,000) of legal fees and will pay to Anheli a success fee which equals to 10% of the total principal and interests recovered by the Company from this legal action. The Company accrued such 10% as a provision for legal fees of $1,198,471 (RMB 6,083,561) as at September 30, 2021.
   In September 2021, the competent court in China granted a property preservation order in favour of the Company with respect to its legal collection action.
   Refer to Note 6, Note receivable, of the condensed consolidated interim financial statements for the three and nine months ended September 30, 2021 and 2020 for more details.
3. The Company invested in certain equity through the public market using the Company's surplus cash held. The investment does not alter the Company's business focus on exploration and development of mineral properties.
   During the nine months ended September 30, 2021, the Company invested a total of $9,815,570 in various companies' common shares and warrants, received $7,818,365 from disposal of investments with a realized gain of $1,392,344. As at September 30, 2021, the remained investment had $3,721,396 of the fair market value and the Company recorded $28,244 of unrealized gain adjustment.
4. The Company had a lease agreement with the Company's CEO for an office located in Beijing, China. The lease started on April 1, 2019 and ended on August 31, 2021. During the nine months ended September 30, 2021, the lease term was extended to August 31, 2026.

2. Exploration and Project Development Activities

2.1 Mineral interests

In the past, the Company experienced significant delays in the renewal of exploration permits of both the Fuwan Silver Deposit and Changkeng Gold Project. As a result, during 2019, the Company impaired $60 million of exploration and evaluation costs incurred in the Fuwan Silver Project and Changkeng Gold Project.

A value in use calculation is not applicable as the Company does not have any expected cash flows from using these mineral properties at this stage of operations. In estimating the fair value less cost of disposal, management did not have observable or unobservable inputs to estimate the recoverable amount greater than $Nil. As this valuation technique

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requires management's judgment and estimates of the recoverable amount, it is classified within Level 3 of the fair value hierarchy.

In November 2020, the renewal for the Changkeng Gold Project exploration permit was obtained. In March 2021, the Company received the new exploration permit on the Fuwan Silver Project. Now that both exploration permits have been renewed, the Company plans to resume its permitting, obtaining a mining license and exploration activities on its Changkeng Gold Project and Fuwan Silver Projects.

2.2 Disclosure of Technical Information

Technical information or other scientific information of the Fuwan Silver Project are disclosed in two Technical Reports, which are available on the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.comunder the Company's profile or on the Company's website at www.mincosilver.com.

The following is a summary:

A National Instrument 43-101 ("NI 43-101") compliant technical report entitled "Technical Report and Updated Resource Estimate on the Fuwan Property Guangdong Province, China", dated January 25, 2008, was prepared by Eugene Puritch, P. Eng. Ontario, Tracy Armstrong, P. Geo Ontario, and Antoine Yassa, P.Geo. Québec. This technical report includes relevant information regarding the data, data validation and the assumptions, parameters, and methods of the mineral resource estimates on the Fuwan Silver Project.

A NI 43-101 compliant technical report entitled "Fuwan Silver Project Feasibility Study Technical Report" effective date September 1, 2009 (the "Feasibility Study") was prepared by John Huang, P.Eng., S. Byron V. Stewart, P.Eng., Aleksandar Živković, P.Eng. and Scott Cowie, B. Eng, MAusIMM, and Eugene Puritch, P.Eng. These preparers are qualified persons for NI 43-101. This technical report includes relevant information regarding the data, data validation and the assumptions, parameters and methods used in determining the ore reserves on the Fuwan Silver Project.

The Company acquired Changkeng Gold Project from Minco Capital Corp. ("Minco Capital") on July 31, 2015. Technical Information of the Changkeng Gold Project is available from the NI 43-101 technical report prepared for Minco Capital entitled "Technical Report and Updated Resource Estimate on the Changkeng Gold Project Guangdong Province, China", dated effective February 21, 2009 and prepared by Tracy Armstrong, P. Geo Ontario, Eugene Puritch, P. Eng. Ontario and Antoine Yassa, P.Geo. Québec who are qualified persons for the purposes of NI 43-101. This technical report includes relevant information regarding the data, data validation and the assumptions, parameters, and methods of the mineral resource estimates on the Changkeng Gold Project and is available at www.sedar.caunder the profile of Minco Capital.

The Company has not updated the three technical reports or feasibility studies mentioned above since their initial publication. Readers are cautioned not to rely on the above-mentioned technical reports / feasibility study for the assessment of the prospect of the Fuwan Silver Project and Changkeng Gold Project, and for the accuracy of certain numbers, including the mineral resources estimates, capital cost, development cost, preproduction cost and operating cost.

2.3 Fuwan Silver Project

The Company, through Changfu Minco, had reconnaissance survey exploration permit, Luoke-Jilinggan Permit, in the Fuwan area, covering an area located in Gaoming County approximately 45 km southwest of Guangzhou, the fourth largest city in China with more than 14 million people and the capital city of Guangdong Province.

The Luoke- Jilinggang Permit expired on July 20, 2017, but in March 2021 the Company received the new exploration permit on the Fuwan Silver Project for five years with an expiry date of March 8, 2026.

2.4 Changkeng Gold Project

The Changkeng Gold Project is adjoined to the Fuwan Silver Project and situated close to well-established water, power, and transportation infrastructure. The Company has 51% interest in the Changkeng Project through its subsidiary Mingzhong, which is a cooperative joint-venture established with three Chinese partners.

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The Changkeng exploration permit expired in September 2019. In late November 2020, the Company received the new exploration permit on the ChangKeng Gold Project for two years with expiry date on November 21, 2022.

2.5 Field expenses and property investigation

During the nine months ended September 30, 2021, the Company expensed $205,000 (2020 - $503,000) of field salary, consulting, insurance, permitting and general administration etc. expenses. $Nil of expenses capitalized during the nine months ended September 30, 2021 and 2020.

The Company is also focused on the acquisition of advanced high-quality mineral projects around the world. During the nine months ended September 30, 2021, the Company spent $246,000 (2020 - $285,000) of salary, consulting and other expenses related to the property investigations.

3. Results of Operations

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

	2021	2020	Change
	$	$	$
Operating expenses	(510,627)	(672,963)	162,336
Other income	2,049,845	268,922	1,780,923
Share of loss from equity investment	(463,078)	(304,269)	(158,809)
Provision for legal fees	(31,047)	-	(31,047)
Income (loss) before income taxes	1,045,093	(708,310)	1,753,403

Income before income taxes for the three months ended September 30, 2021 was $1,045,000 compared to a loss of $708,000 in the prior year's same period, which increased by $1.8 million mainly due to the realized gain on disposition of investment in financial assets increased by $1.3 million and operation expenses decreased by $162,000.

The movement in connection with the operating expenses and other income (expenses) are discussed in the section 3.1.1 and 3.1.2 respectively, below.

Share of loss from equity investment

In May 2020, the Company purchased 7,950,000 common shares of Hempnova Lifetech Corporation ("Hempnova") representing approximately 12.7% of the issued and outstanding common shares of Hempnova. The Company accounts for this investment using the equity method due to its significant influence over Hempnova.

During the three months ended September 30, 2021, the Company's share of Hempnova loss was $463,000 compared to $304,000 in the prior year's same period.

Provision for legal fees

Pursuant to Anheli Service Agreement (refer to section 1 (b), above), the Company accrued $1,167,424 (RMB 6,083,561) of Anheli's success fee as an estimated provision for legal fees as at June 30, 2021. $31,047 of foreign exchange difference was adjusted as at September 30, 2021.

3.1.1 Operating Expenses

The Company maintains a field office in Gaoming and Gaoyao Counties, Guangdong province, an office in Beijing, China and an office in Vancouver, Canada. The Company's operating expenses include overhead associated with administering, field expenses and property investigation activities.

The following table is a summary of the Company's operating expenses for the three months ended September 30, 2021 and 2020:

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