Palamina : Management Discussion & Analysis for the year ended December 31, 2023

PALAMINA CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2023

General

The following management's discussion and analysis ("MD&A") of the financial condition and results of the operations of Palamina Corp. ("Palamina", or the "Company") constitutes management's review of the factors that affected the Company's financial and operating performance for the years ended December 31, 2023 and 2022. This MD&A was written to comply with the requirements of National Instrument 51-102 - Continuous Disclosure Obligations. This discussion should be read in conjunction with the audited annual consolidated financial statements of the Company for the years ended December 31, 2023 and 2022, together with the notes thereto ("the financial statements"). Results are reported in Canadian dollars, unless otherwise noted.

The financial statements and the financial information contained in this MD&A were prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"). Please refer to Note 3 of the annual audited consolidated financial statements as at and for the years ended December 31, 2023 and 2022 for disclosure of the Company's material accounting policies.

The audit committee of the Company has reviewed this MD&A and the audited consolidated financial statements for the years ended December 31, 2023 and 2022 and the Company's Board of Directors approved these documents prior to their release.

This MD&A is dated April 29, 2024 and is current to that date.

Additional information relating to the Company is available free of charge on the System for Electronic Document Analysis and Retrieval Plus ("SEDAR+") website at www.sedarplus.ca, on Palamina's website at www.palamina.com.

Caution Regarding Forward Looking Information

This MD&A includes certain statements that may be deemed "forward-looking statements". All statements in this discussion, other than statements of historical fact, that address future exploration activities and events or developments that the Company expects, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.

Qualified Person

Technical information contained in this MD&A has been prepared by or under the supervision of Mr. Alvaro Fernandez-Baca, P. Geo., Vice-President, Exploration of Palamina, who acts as Palamina's Qualified Person ("QP") as defined by National Instrument 43-101 - "Standards of Disclosure for Mineral Projects ("NI 43-101"). Mr. Fernandez-Baca has reviewed work practices and verified the data comprising such technical information, including sampling, analytical and test data underlying the information or opinions contained in this MD&A.

In addition, Mr. Yury Valdivieso, Palamina's lead geologist and project manager in Peru, is responsible for the execution of all exploration programs. Mr. Valdivieso has a MSc. in economic geology and is a member of the Society of Economic Geologists ("SEG"), the Geological Society of Peru ("SGP") and the College of Engineers of Peru ("CIP").

Palamina Corp.

Management's Discussion & Analysis

For the Year Ended December 31, 2023

Overview

Palamina is an exploration stage company focused on the exploration for economic mineral deposits in Peru through its wholly owned subsidiary, Palamina SAC ("Palamina Peru"), and to a lesser extent in Mexico through its wholly owned subsidiary, Palamina S.A. de C.V. ("Palamina Mexico"). Palamina was incorporated on April 23, 2015 under the Business Corporations Act (Ontario). The Company's head office is located at 145 King Street West, Suite 2870 Toronto, Ontario M5H 1J8. Palamina is a reporting issuer pursuant to the securities laws of Ontario, British Columbia, Alberta, and Saskatchewan and is listed in Canada on the TSX Venture Exchange ("TSX-V") under the symbol PA and in the United States on the OTCQB under the symbol PLMNF.

Management's strategy for building Palamina into a profitable resource company and maximizing shareholder value is to acquire and explore properties with the potential to host significant economic deposits within prolific mining districts in Peru. The Company explores primarily for gold and silver, with the objective of enhancing the value of its properties either by direct exploration or through option or joint venture agreements with third parties. This strategy diversifies the business risks inherent in developing a single property.

Investment in Winshear Gold Corp.

Winshear Gold Corp. ("Winshear") is listed on the TSX-V and trades under the symbol WINS. On September 19, 2023, the Company's equity and royalty partner, Winshear announced that it had suspended arbitration proceedings with the United Republic of Tanzania ("Tanzania") in relation to its dispute regarding the SMP Gold Project in Tanzania and that a conditional settlement agreement had been reached. On October 16, 2023, Winshear, announced that it had successfully concluded the settlement with Tanzania in the amount of US$30,000,000 and that after payment of various amounts, including legal costs, the net amount paid to Winshear was US$18,455,305 million (CDN$25,256,084). Palamina recorded its proportionate share of the income arising from this settlement during the three- month period ended December 31, 2023.

On October 26, 2023, Winshear announced that its board of directors had approved a cash distribution to Winshear shareholders by way of a return of capital ("ROC") of CDN$0.25 per share to shareholders of record as at November 23, 2023, with the payment to occur on December 8, 2023.

On November 23, 2023 Palamina held 14,500,000 common shares of Winshear and received a non- dilutive inflow of $3,625,000 in cash by way of return of capital on December 8, 2023.

Palamina is fully funded with respect to its 2024 operating budget and its ability to execute its 2024 exploration plans, including a planned drilling program on its flagship Usicayos Gold project in Peru.

Effective February 13, 2024, Winshear completed a share consolidation on the basis of 1 post- consolidation common share for every 3 pre-consolidation common shares. As a result, as at December 31, 2023 and April 29, 2024, Palamina owns 4,833,333 common shares Winshear or 15.4% of the 31,418,632 shares outstanding. On April 26, 2024, Winshear closed at $0.12 per share, giving Palamina's investment a market value of $580,000.

Winshear is fully funded to execute its 2024 exploration plans in Peru. In addition to its 15.4% ownership of Winshear, Palamina holds a 2% net smelter return ("NSR") royalty on Winshear's Peru properties and is due to receive an advance royalty payment of US$100,000 on or before September 19, 2024.

In 2024, Palamina shareholders will participate in two separate planned drilling programs in Peru at Palamina's Usicayos and Winshear's Gaban Gold Projects.

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Palamina Corp.

Management's Discussion & Analysis

For the Year Ended December 31, 2023

Corporate Highlights - January 1, 2023 to April 29, 2024

• On April 1, 2024, Palamina appointed Alvaro Fernandez-Baca as Vice-President, Exploration and Hall Stewart and Jerry Blackwell as advisors. A total of 1,100,000 incentive stock options were granted, exercisable at $0.15 per common share.
• On February 13, 2024 Winshear Gold consolidated its outstanding common share capital on the basis of three (3) pre-Consolidationshares for one (1) post-Consollidationshare thereby modifying Palamina's ownership to 4,833,333 common shares Winshear or 15.4% of the 31,418,632 shares outstanding.
• On December 15, 2023, Palamina granted 1,585,000 incentive stock options to certain officers, directors, advisors and consultants of the Company under its Stock Option Plan. All options are exercisable at $0.15 per common share.
• On December 8, 2023, Winshear Gold carried out a Return of Capital to shareholders resulting in Palamina receiving a non-dilutive cash payment of CDN$3,625,000. These proceeds were offset by losses in Palamina where no taxes are due. Proceeds will be used to drill test the Cayos and Sol de Oro ("SDO") zones at Palamina's Usicayos Gold Project in 2024.
• On November 17, 2023, Palamina exercised warrants in Winshear to purchase 546,000 common shares of Winshear at a price of $0.20 per share at a cost of $109,200.
• On November 10, 2023, Palamina exercised warrants in Winshear to purchase 775,000 common shares of Winshear at a price of $0.10 per share at a cost of $77,500.
• On November 10, 2023, Palamina sold 243,000 shares of Winshear at $0.27 per share for net proceeds of $62,425.
• On October 26, 2023, Winshear announced its intention to make a return of capital payment of CDN$0.25 per share to shareholders of record on November 23, 2023, with the payment to be carried out on December 8, 2023.
• On October 16, 2023, Winshear received a gross settlement payment of US$30,000,000 from the Tanzanian Government as compensation for the expropriation of Winshear's SMP gold deposit in Tanzania. After payment of various amounts, including legal costs, the net amount paid to Winshear was US$18,455,305 million (CDN$25,256,084).
• On August 21, 2023, Palamina received a US$50,000 Advance Royalty ("AR") payment from Winshear. The AR payment was due pursuant to a property purchase agreement signed and approved on September 19, 2019.
• On June 15, 2023, Palamina closed a non-brokered private placement through the issuance of 6,000,000 units at $0.125 per unit for gross proceeds of $750,000. Each unit was comprised of a common share and a common share purchase warrant entitling the holder thereof to purchase an additional common share at a price of $0.25 for a period of 24 months from closing. $171,250 of the private placement was subscribed for by directors of Palamina, including the Company's President and Chief Executive Officer. The Company paid a finder's fee of $2,625 and issued 21,000 finder warrants at $0.125 for a period of two years.
• On February 21, 2023, Palamina's equity partner Winshear, concluded arbitration proceedings against the Government of Tanzania for the expropriation of its SMP Gold Project.

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Palamina Corp.

Management's Discussion & Analysis

For the Year Ended December 31, 2023

Operational Highlights - January 1, 2023 to April 29, 2024

• On February 29, 2024, Palamina released geochemical results from its December 2023 field program in the SDO zone at the Usicayos Gold project. Highlights include 1m of 153 gold grams per tonne ("g/t Au") at SDO-S and 4m @ 5.2 g/t Au at SDO-E.
• On November 23, 2023 Palamina Peru received its water permit for the Usicayos Gold Project.
• On September 5, 2023 Palamina received approval of its Authorization to Initiate Exploration Activities ("AIEA") from the Ministry of Energy and Mines of Peru and is fully permitted to carry out a drilling program at the Usicayos Gold Project.
• On May 16, 2023, Winshear received approval of its AIEA and is also fully permitted to carry out a drilling program at its Gaban Gold Project.
• On April 5, 2023, Palamina received approval of the modification of its Declaración de lmpacto Ambiental ("DIA") at the Usicayos Gold Project which will allow for drilling of the Sol de Oro and Cayos gold zones.
• On January 23, 2023, Palamina announced channel sampling assays of 5.1 g/t Au over 4 metres at surface and 15.4 g/t Au over 2.7 metres underground at the Usicayos Gold Project.

Peru Properties

Focus on Puno Orogenic Gold Belt

The Puno Orogenic Gold Belt ("POGB") is an auriferous, southeasterly trending metasedimentary-hosted belt located in southern Peru which follows the Andean trend and covers an area of approximately 175 km NW-SE by up to 75 km NE-SW in the Puno region of Peru. The POGB is a section of a larger 3,400 km long belt of orogenic gold deposits extending from Argentina in the south, through Bolivia and the Puno region, to the Pataz region in northern Peru. The POGB is flanked on the northeast by the gold producing Madre de Dios region in Peru. Palamina's exploration targets in this region are 'pizarra' or slate-hosted gold systems.

Orogenic gold mineralization in the Puno region occurs in association with regional-scale structures, generally hosted by deformed and folded slates and related metasediments. Palamina is targeting continuous, tabular zones of orogenic gold mineralization within fine-grained, sheared, locally metamorphosed sedimentary rocks. Mineralization may occur in discrete, stacked horizons as bedding- or shear-parallel horizons within the host rock. Gold mineralization typically consists of native gold in distinctive "packages" of fine-grained quartz veins, veinlets and micro-veinlets. Globally, orogenic-type gold deposits are known to extend to vertical depths greater than 1,000 m. Important examples of slate hosted deposits in the POGB in Peru include Ollachea & La Rinconada.

The orogenic gold belt in Puno hosts more than 100 known hard-rock gold occurrences and over 50 hard-rock mining operations are being operated by small and medium-scale artisanal miners. Palamina believes the POGB has considerable potential to contain a significant number of additional yet undiscovered orogenic gold deposits. Erosion of these gold-bearing structures (by both fluvial and glacial processes) is widely considered to be the source for the extensive alluvial gold deposits located in the low-lying Madre de Dios region of Peru's Amazon basin.

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Palamina Corp.

Management's Discussion & Analysis

For the Year Ended December 31, 2023

There has been a significant up-grading of road access in the Puno region (example: Pacific-Atlantic

interoceanic highway) and power infrastructure (example: 206 MW San Gaban hydro-electric facility). It is Palamina's belief that these infrastructure developments greatly assist exploration of the POGB and will well support future mine developments in the region.

Comparison with other Gold Projects in the POGB:

The Ollachea orogenic gold deposit, located 60 km northwest of Usicayos, reportedly occurs along a structurally deformed east-west trending regional shear structure on the edge of the SE trending POGB. Similarly, 75 km southeast of Usicayos, the large orogenic gold occurrence at La Rinconada also features a significant east-west inflection zone. Midway between Ollachea and La Rinconada, the Usicayos Gold Project also lies along a comparably deformed east-west trending structural jog.

Usicayos Gold Project

At the Usicayos Gold Project, Palamina holds title to 11,012 hectares of mineral concessions. On June 4, 2022, Palamina completed a total of US$ 55,000 in payments to acquire 100% of a 200-hectare titled internal concession covering the Sol de Oro Zone, southwest of the Cayos and Veta Zones. On July 1, 2023, Palamina reduced the Usicayos claims block by 3,000 hectares to reduce ongoing carrying costs in Peru. As a result, Palamina now holds 100% interest to 11,012 hectares at Usicayos with no underlying payments or royalties.

The Usicayos Gold Project is located near the town of Usicayos (centrally located along the western periphery of the POGB). The Usicayos concessions extend east and west of the town of Usicayos at elevations ranging from 3,200 to 4,700 m. Rock exposure in the area is generally excellent as the properties sit predominantly above the tree line.

At Usicayos, Palamina has prioritized a 2.4 km section of a 4.5 km mineralized gold trend for drilling consisting of 3 separate gold zones trending southwest to northeast for drilling; Sol de Oro, Cayos and Veta. Veta was the initial discovery zone followed by the Cayos zone and more recently the Sol de Oro zone.

On September 30, 2021, Palamina started its inaugural diamond drilling campaign in the Veta zone. A total of 4 drillholes totalling 1,704.50 metres were completed over a 600-metre strike length before the onset of the rainy season. On January 13, 2022, Palamina announced results from the first 4 diamond drillholes with select results reporting; VE-01-2021 returned 1 m @ 1.26 g/t Au, VE-02-2021 1 m @ 3.09 g/t Au (visible gold in intercept), VE-03-2021 24 m @ 0.5 g/t Au, VE-04-2021 11 m @ 0.8 g/t Au.

In September the Ministry of Mines in Peru accepted Palamina's application to modify its Declaración de lmpacto Ambiental ("DIA") to include the Cayos and Sol de Oro zones.

On September 18, 2022, Palamina announced results from a fall mapping and rock sampling (247 new chip-channel samples) focused on the SDO area, approximately 1.7 to 3 km's southwest of the previously drilled Veta Zone. Select results from the sampling campaign were reported as follows:

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Palamina Corp.

Management's Discussion & Analysis

For the Year Ended December 31, 2023

In November 2022, Palamina carried out a drone-supported topographic survey over the 4.5 km long mineralized gold trend to provide better geological controls, including defining the main structural controls.

On January 23, 2023 Palamina announced results from its second mapping and sampling campaign in the Sol De Oro zone completed in Q4 2022. A total of 342 samples were taken of which 17 were underground samples. This program was primarily made up of channel samples designed to test the continuity of gold mineralization on surface across the SDO North and SDO South zones.

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Palamina Corp.

Management's Discussion & Analysis

For the Year Ended December 31, 2023

SDO NORTH ZONE: At the SDO North zone, surface mapping and sampling has identified two significant structures. Surveying and underground channel sampling were carried out within accessible historic adits driven at various elevations into the hillside, following or crosscutting gold structures. Select results from surface and underground channel samples were returned as follows:

SDO SOUTH ZONES: Gold mineralization at the SDO South zone is made up of three separate NE

trending structures: SDO SE, SDO S and SDO SW. Surface channel sampling in the 3 zones returned the following select results:

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Palamina Corp.

Management's Discussion & Analysis

For the Year Ended December 31, 2023

On April 5, 2023, Palamina received approval of the modification of its DIA at the Usicayos Gold Project which allows for the construction of a further 35 drill pads in the Sol de Oro and Cayos gold zones.

On September 5, 2023, Palamina Peru received its Authorization to Initiate Exploration Activities ("AIEA") permit to commence drilling in the SDO and Cayos zones at Usicayos. On September 5, 2023, Palamina Peru received its water permit required to carry out a drilling program.

In December of 2023, Company geologists completed a channel sampling and geological reconnaissance program designed to test the continuity of gold mineralization in the SDO North, East, and South zones. Approximately 30% of all samples collected were continuous channels taken using a diamond saw, and the remaining samples were rock chips collected using hammers and chisels. Samples, some of which contained visible gold, were collected on both outcrops and along artisanal underground tunnels and workings built by local miners in the past.

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Palamina Corp.

Management's Discussion & Analysis

For the Year Ended December 31, 2023

On December of 2023, Palamina reported the following selected results from the SDO zone:

ZONE

SAMPLE

SAMPLE

LENGTH

Au

LOCATION

TYPE

METRES

g/t

SDO S

Outcrop

Channel

3.2

9.3

SDO S

Outcrop

Including

1.2

18.4

SDO S

Underground

Channel

1.0

1.2

SDO S

Underground

Channel

1.0

153

SDO S

Outcrop

Channel

4.5

3.4

SDO S

Outcrop

Including

1.0

9.1

SDO S

Underground

Channel

1.0

11.4

SDO S

Underground

Channel

1.0

6.6

SDO S

Underground

Channel

1.0

3.3

SDO E

Outcrop

Channel

1.0

2.6

SDO E

Outcrop

Channel

1.0

1.7

SDO E

Outcrop

Channel

4.0

5.2

SDO E

Outcrop

Including

1.0

9.6

SDO E

Outcrop

Channel

9.0

0.8

SDO E

Outcrop

Channel

1.0

3.2

In April of 2024, Palamina commenced its first field exploration campaign post the rainy season in the SDO-E zone which hosts two outcropping mantos that can be traced over an 800-metre strike length. Company geologists are investigating the potential to define at least three other parallel mantos, in the area where small miners have worked in the past, with the potential to host continuous gold mineralization at SDO-E. A structural geological consultant has been hired to define the structural controls for gold mineralization at a local scale and better define the drill targets. Palamina is also ready to commence construction of a road, drill pads, and the exploration camp in the SDO zone in order to commence drilling.

Subsequent to drilling the SDO Zone, Palamina also plans to drill the Cayos Zone in 2024. Prior sampling programs in the Cayos Zone have returned up to 30.5 g/t Au over 3m in a continuous channel sample. A topographic survey, immediately followed by a drone airborne magnetic survey are also scheduled to start in May. Drilling is scheduled to commence in late June to initially test the four target areas identified to date at SDO.

Panorama Gold Project

On January 4, 2022, Palamina applied for the mineral rights to 2,400 hectares. The Panorama application area sits within the Ananea formation and lies within the same regional structural corridor as Palamina's Usicayos Gold Project and Gold Mining Inc.'s Crucero Gold Project. In August 2022, Palamina completed a drone survey over Panorama and a brief mapping/sampling program to confirm if Panorama is a SE extension of the Crucero Gold Project. No work programs have been undertaken in 2023.

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Palamina Corp.

Management's Discussion & Analysis

For the Year Ended December 31, 2023

Cristel Gold Project

On January 4, 2022, Palamina applied for the mineral rights to the Cristel Uno 300-hectare concession to cover a large colour anomaly. On May 3, 2022, Palamina made application for a further 2,700 hectares when it came open for acquisition to cover the historic Resplandor gold mining area southwest of Cristel Uno and an AI target area generated from the POGB study completed by GoldSpot Discoveries Inc. ("GoldSpot"). Cristel sits southeast of Minera IRL's Ollachea gold deposit and northwest of Palamina's Usicayos Gold Project. In August 2022, Palamina completed drone reconnaissance over Cristel and a brief mapping/sampling program. A site visit was carried out by Palamina's new VP Exploration with our geological team in February of 2024. No work programs have been undertaken in 2023.

Yin Gold Project

On May 3, 2022 Palamina applied for the mineral rights to 4,000 hectares that make up the Yin claims area to cover an AI target area generated from GoldSpot's study of the POGB. Winshear's Yang claim to the northeast covered the balance of the target area. Yang was staked by Palamina to cover historic mine areas seen from satellite images west of the Mucumayo mines area, and was subsequently sold to Winshear. In February 2022, Palamina signed a letter agreement with Winshear to wave the 2 km area of influence surrounding the Yang claim in order that Palamina may stake the Yin application area.

In August 2022, an agreement was signed with the Icaco community to carry out an initial exploration program of the Yin and Yang claims. In October 2022, Palamina and Winshear completed an initial visit of the Yin and Yang claims to investigate the target area. The site visit failed to locate any meaningful gold values on Palamina's Yin and Winshear's Yang claims. No work programs have been undertaken in 2023.

Bendi Gold Project

Palamina holds title to 5,295 hectares covering the Bendi Project. On July 1, 2023, Palamina dropped 8,105 hectares to reduce ongoing carrying costs in Peru. The Bendi Gold Project is located northeast of the Usicayos Gold Project. Staking has been based on Palamina's understanding of prospective district- scale geological features in the Benditani Mine district and proximity to historical and current operating small-scale orogenic gold mines in the area. Mining in the Benditani district reportedly dates back to Pre-Inca times.

Palamina's exploration efforts at Bendi to date have focused on 2 highly prospective sub-parallel district- scale structures; 1) The Carol structure is an approximately 15 km long NW-SE trending shear zone interpreted to have developed in close association with the core of an anticline. This structure transects the southwestern sector of the Bendi concessions. The auriferous Carol anomaly is located southwest of the Huacolcota mine. At Carol, Palamina has reported rock chip samples returning up to 47.8 g/t Au and channel samples returning high values of 1.8 m of 13.4 g/t Au and 234 g/t Ag (Palamina news release October 29, 2018); 2) The Mantos structure is a 7 km long thrust-relatedshear-zone trending sub- parallel to the host shear structure of the Benditani gold mine. Palamina has reported rock chip samples returning 25.4 g/t Au and 9.9 g/t Au from the Mantos Gold Anomaly (Palamina news release October 29, 2018). A site visit was carried out by Palamina's new VP Exploration with our geological team in April of 2024. No work programs have been undertaken in 2023.

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