Power Nickel : 2023 Q4 MD&A

POWER NICKEL INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

YEAR ENDED DECEMBER 31, 2023

Power Nickel Inc.

Management Discussion and Analysis

Year ended December 31, 2023

Dated - April 29, 2024

MANAGEMENT DISCUSSION AND ANALYSIS

The following Management's Discussion and Analysis ("MD&A") dated as of April 29, 2024, supplements the consolidated financial statements of Power Nickel Inc. (formerly Chilean Metals Inc; the "Company") and the notes thereto for the years ended December 31, 2023 and 2022. The MD&A has been prepared in compliance with the requirements of National Instrument 51-102 - Continuous Disclosure Obligations. This discussion should be read in conjunction with the consolidated financial statements of the Company for the years ended December 31, 2023 and 2022 together with the notes thereto. Results are reported in Canadian dollars, unless otherwise noted. The Company's consolidated financial statements and the financial information contained in this MD&A are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the IFRS Interpretations Committee ("IFRIC"). Information contained herein is presented as of April 29, 2024, unless otherwise indicated.

For the purposes of preparing this MD&A, Management, in conjunction with the Board of Directors, considers the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of the Company's common shares; (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) it would significantly alter the total mix of information available to investors. Management, in conjunction with the Board of Directors, evaluates materiality with reference to all relevant circumstances, including potential market sensitivity.

The Company's shares are listed on the TSX Venture Exchange ("TSX-V") and Santiago Stock Exchange, Venture Market. Further information about the Company and its operations can be obtained from the offices of the Company or from www.sedarplus.caand the Company's website www.powernickel.com.

CAUTION REGARDING FORWARD-LOOKINGSTATEMENTS

This MD&A contains certain forward-looking information and forward-looking statements, as defined in applicable securities laws (collectively referred to herein as "forward-looking statements"). These statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "continues", "forecasts", "projects", "predicts", "intends", "anticipates" or "believes", or variations of, or the negatives of, such words and phrases, or statements that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Forward- looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in such forward-looking statements. The forward-looking statements in this MD&A speak only as of the date of this MD&A or as of the date specified in such statement. The following table outlines certain significant forward-looking statements contained in this MD&A and provides the material assumptions used to develop such forward-looking statements and material risk factors that could cause actual results to differ materially from the forward-looking statements.

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Power Nickel Inc.

Management Discussion and Analysis

Year ended December 31, 2023

Dated - April 29, 2024

Forward-looking statements

Assumptions

Risk factors

Potential

of

the

Company's

Financing will be available for future

Price volatility of precious and base

properties

to

contain economic

exploration and development of the

metals;

uncertainties

involved in

deposits of any precious and base

Company's

properties; the

actual

interpreting

geological

data

and

metals discovered

results

of

the

Company's

confirming

title

to

acquired

exploration

and

development

properties; the possibility that future

activities

will

be

favourable;

exploration results will not be

operating,

exploration

and

consistent

with

the

Company's

development costs will not exceed

expectations; availability of financing

the

Company's

expectations; the

for and actual results of the

Company will be able to retain and

Company's

exploration

and

attract skilled staff; all requisite

development activities; increases in

regulatory

and

governmental

costs;

environmental

compliance

approvals

for exploration projects

and changes in environmental

and

and other operations will be

other

local

legislation

and

received on a timely basis upon

regulation;

interest

rate

and

terms acceptable to the Company,

exchange rate fluctuations; changes

and

applicable

political

and

in economic and political conditions;

economic conditions are favourable

the Company's ability to retain and

to the Company; the price of

attract skilled staff; availability of

precious and base metals and

permits

applicable

interest

and exchange

rates will be favourable to the

Company; no title disputes exist with

respect to the Company's properties

The Company has no source of

The

operating

and

exploration

Changes in debt and equity

revenue and it will require additional

activities of the Company for the

markets; timing and availability of

cash resources to meet its

next twelve months and beyond,

external

financing

on

acceptable

administrative

overhead

and

starting from December 31, 2023,

terms; changes in the operations

maintain its mineral investments for

and the costs associated therewith,

currently planned;

increases

in

the next twelve months, starting

will be consistent with the

costs;

environmental

compliance

from December 31, 2023

Company's

current

expectations;

and changes in environmental and

debt and equity markets, exchange

other

local

legislation

and

The Company expects to incur

and interest rates and other

regulation;

interest

rate

and

further losses in the development of

applicable economic conditions are

exchange rate fluctuations; changes

its business and will need to raise

favourable to the Company

in economic conditions

additional financing to meet its

financial requirements

The Company's ability to carry out

The

exploration

and

maintenance

Changes in debt and equity

anticipated

exploration

and

activities of the Company for the

markets; timing and availability of

maintenance

on

its

property

year ended December 31, 2024,

external

financing

on

acceptable

interests and its anticipated use of

and the costs associated therewith,

terms; increases in costs; changes

cash

will be consistent with the

in the operations currently planned;

Company's

current

expectations;

environmental compliance

and

debt and equity markets, exchange

changes in environmental and other

and interest rates and other

local legislation

and

regulation;

applicable economic conditions are

interest rate and exchange rate

favourable to the Company

fluctuations;

changes in economic

conditions;

receipt

of

applicable

permits

Sensitivity

analysis

of

financial

Foreign exchange rates will not be

Changes

in

exchange

rate

instruments

subject to change in excess of plus

fluctuations

or minus 1%

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Power Nickel Inc.

Management Discussion and Analysis

Year ended December 31, 2023

Dated - April 29, 2024

Plans, costs, timing and capital for

Financing will be available for the

Price volatility of any mineral

future exploration and development

Company's

exploration

and

discovered,

changes

in

debt

and

of the Company's property interests,

development

activities

and the

equity

markets;

timing

and

including the costs and potential

results thereof will be favourable;

availability of external financing on

impact of complying with existing

actual

operating

and exploration

acceptable terms; the uncertainties

and proposed laws and regulations

costs will be consistent with the

involved in

interpreting

geological

Company's

current

expectations;

data and confirming title to acquired

the Company will be able to retain

properties; the possibility that future

and attract skilled staff; all

exploration results will not be

applicable

regulatory

and

consistent

with

the

Company's

governmental

approvals

for

expectations; increases

in costs;

exploration

projects

and

other

environmental

compliance

and

operations will be received on a

changes in environmental and other

timely basis upon terms acceptable

local

legislation

and

regulation;

to the Company; the Company will

interest rate and exchange rate

not be adversely affected by market

fluctuations;

changes

in economic

competition;

debt

and

equity

and

political

conditions;

the

markets, exchange

and

interest

Company's ability to retain and

rates and other applicable economic

attract skilled staff; availability of

and

political

conditions

are

permits; market competition

favourable to the Company; the

price of precious and base metals

will be favourable to the Company;

no title disputes exist with respect to

the Company's properties

Management's outlook regarding

Financing will be available for the

Price volatility of any precious and

future trends, including the future

Company's

exploration

and

base metals discovered; changes in

price of any precious and base

operating activities; the price of

debt and equity markets; interest

metals discovered and availability of

applicable

minerals

will

be

rate and exchange rate fluctuations;

future financing

favourable to the Company

changes in economic and political

conditions; availability of financing

Prices and price volatility for

The price of precious and base

Changes in debt and equity markets

precious and base metals

metals will be favourable; debt and

and the spot price of precious and

equity

markets,

interest

and

base metals, if available; interest

exchange rates and other economic

rate and exchange rate fluctuations;

factors which may impact the price

changes in economic and political

of precious and base metals will be

conditions

favourable

Inherent in forward-looking statements are risks, uncertainties and other factors beyond the Company's ability to predict or control. Please, in addition, also make reference to those risk factors referenced in the "Risk Factors" section below. Readers are cautioned that the above chart does not contain an exhaustive list of the factors or assumptions that may affect the forward-looking statements, and that the assumptions underlying such statements may prove to be incorrect. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this MD&A.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. All forward-looking statements herein are qualified by this cautionary statement. Accordingly, readers should not place undue reliance on forward- looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements whether as a result of new information or future events or otherwise, except as may be required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements, unless required by law.

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Power Nickel Inc.

Management Discussion and Analysis

Year ended December 31, 2023

Dated - April 29, 2024

CORPORATE GOVERNANCE

Management of the Company is responsible for the preparation and presentation of the audited consolidated financial statements and notes thereto. Additionally, it is Management's responsibility to ensure the Company complies with the laws and regulations applicable to its activities.

The Company's Management is held accountable to the Board of Directors ("Directors"), each member of which is elected annually by the shareholders of the Company. The Directors are responsible for reviewing and approving the financial statements and the MD&A. Responsibility for the review and approval of the Company's financial statements and MD&A is delegated by the Directors to the Audit Committee, which is composed of three directors. Additionally, the Audit Committee pre-approves audit and non-audit services provided by the Company's auditors.

The auditors are appointed annually by the shareholders to conduct an audit of the financial statements in accordance with generally accepted auditing standards. The external auditors have complete access to the Audit Committee to discuss audit, financial reporting and related matters resulting from the annual audit as well as assist the members of the Audit Committee in discharging their corporate governance responsibilities.

DESCRIPTION OF BUSINESS

Power Nickel Inc. (formerly Chilean Metals Inc.) is a resource exploration company involved in exploring for Nickel Copper, Cobalt, PEG group metals, gold, and silver on its various properties located in Chile, and Canada (Quebec & British Columbia). Exploring in Chile is done through its wholly owned subsidiaries in Chile, being Minera IPBX Limitada ("IPBX"), Minera Tierra de Oro Limitada, Minera Palo Negro Limitada and Minera Sierra Pintada Limitada ("Power Nickel Subsidiaries").

OVERALL PERFORMANCE

As at December 31, 2023, the Company had assets of $3,734,149 and a net deficiency position of $2,546,048. This compares with assets of $1,960,445 and a net deficiency position of $812,477 at December 31, 2022. At December 31, 2023, the Company had $6,224,733 of liabilities (December 31, 2022 - $2,717,458).

At December 31, 2023, the Company had a working capital deficit of $2,496,899, compared to working capital deficit of $766,032 at December 31, 2022, a change of $1,730,867 (see "Liquidity Section" for more details). The Company had cash of $216,365 at December 31, 2023, compared to cash of $1,275,104 at December 31, 2022, a decrease of $1,058,739. The Company needs to secure additional financing to carry on business activities for the twelve months ending December 31, 2024 (See below).

QUALIFIED PERSON

Qualified Person Kenneth Williamson, P.Geo. (OGQ #01490, APGO #2176), Vice-President Exploration of Power Nickel, and Qualified Person under NI 43-101, has reviewed and approved the technical content of this MD&A.

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Power Nickel Inc.

Management Discussion and Analysis

Year ended December 31, 2023

Dated - April 29, 2024

EXPLORATION

Nisk Property

On December 22, 2020 (the "Effective Date") the Company entered into an option agreement with Critical Elements Limited ("Critical") to acquire a 50% interest in the Nisk property (the "First Option"). Upon completion of the terms of the First Option the Company also has a Second Option to increase its interest from 50% to 80% by incurring or funding additional work in the amount of $2,200,000 including a Resource Estimate for a period of four years from the effective date of completion of the First Option. On February 24, 2021 ("Closing Date") the Company closed the transaction.

Under the terms of the agreement, the requirements to exercise the First Option are:

1. Make cash payments totaling $500,000 to Critical on or before the dates set out below:
2. 1. A non-refundable amount of $25,000 on the date of execution of the agreement; (paid)
   2. An amount of $225,000 within a delay of five (5) Business Days following the Effective Date; and (paid)
   3. An amount $250,000 within a delay of six (6) months from the Effective Date; (paid)
3. issue 12,051,770 Shares within a delay of five (5) Business Days following the Effective Date. (issued)
4. incur an aggregate of $2,800,000 of Work Expenditures on the Property on or before the dates set out below:
5. 1. $500,000 in Work Expenditures on or before the date that is one (1) year from Closing Date; (completed)
   2. $800,000 in Work Expenditures on or before the date that is two (2) years from Closing Date; (completed) and
   3. $1,500,000 in Work Expenditures on or before the date that is three (3) years from Closing Date; (completed)

In connection with closing of the Nisk property agreement, the Company issued to Paradox Equity Partners Ltd a finders fee of 668,377 shares on February 24, 2021.

In connection with closing of the Nisk property agreement, the Company issued to Paradox Equity Partners Ltd a finders fee of 668,377 shares on February 24, 2021.

The 12,720,147 common shares issued during the year ended December 31, 2021 in connection with this property option agreement were valued at $3,943,246 based on the trading price of the Company's shares on the date of issuance.

Following the exercise of the First Option, Critical will receive a 2% net smelter return from the extraction and production of lithium products, the amount of which Power Nickel may, following the payment of $2 million in cash, reduce to 1%

Subsequently, Power Nickel has exercised its option to acquire 50% of the Nisk Project and delivered notice to Critical Elements that it intends to exercise its second option to bring its ownership to 80%. The last remaining commitment to activate this exercise of the option is the delivery of a NI-43-101 Technical report which occurred in late Q4 2023. Critical Elements has acknowledged all terms have been met and initiated the process to transfer the claims which is expected to close in early Q2.

The NISK property comprises a large land position (20 kilometres of strike length) with numerous high-grade intercepts. Power Nickel, formerly Chilean Metals is focused on confirming and expanding its current high-grade,nickel-copper PGE, Gold and Silver mineralization

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Power Nickel Inc.

Management Discussion and Analysis

Year ended December 31, 2023

Dated - April 29, 2024

In late Q4 2023 Power Nickel produced a Technical report outlined below.

The figure below presents a longitudinal view of the current 2023 Mineral Resource Estimate.

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Power Nickel Inc.

Management Discussion and Analysis

Year ended December 31, 2023

Dated - April 29, 2024

The information presented above is derived from the Technical Report titled: "Amended and Updated NI 43-101

Technical Report and Updated Mineral Resource Estimate for the Nisk Project, Eeyou Istchee James Bay Territory, Québec"; Duncan Studd, Pierre-Luc Richard, Gordon Marrs and Jeffrey Cassoff; January 19th, 2024.

The Technical report represents a snapshot in time of our historic exploration work as it relates to resource size. The Company has significant exploration programs ongoing and planned.

The Company employed Fleet Space Technologies and their Ambient Noise Tomography technology to assist in better evaluation of its land package in search for additional resources. The search was focused in two areas. Around our current resource, what we refer to as Nisk Main, and around a exploration result we obtained about 5.5 Kilometres North and East of Nisk main. This was a project historically referred to as Wildcat but whose name has subsequently been changed to the Lion Discovery.

Below are targets labelled ANT 1-4 outlining our intent to explore these areas in pursuit of additional Nickel Sulfide mineralization.

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Power Nickel Inc.

Management Discussion and Analysis Year ended December 31, 2023 Dated - April 29, 2024

The Lion Discovery, previously called Wildcat

The Below is from a release issued on April 16th 2024

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Power Nickel Inc.

Management Discussion and Analysis

Year ended December 31, 2023

Dated - April 29, 2024

Power Nickel has drilled 9800 metres on Nisk. It has used the services of veteran Geoscientific consulting team GeoVector to manage the day to day drill program execution and to assist our inhouse team on the Geological drilling design.

Nickel Sulphate discoveries globally tend to come in clusters, the dual focus of the next Power Nickel campaign will be drilling deeper on the Nisk Main target and the Nisk West target where previous exploration had identified mineralized high grade nickel zones. In addition, we will be following up on the successful exploration of the Lion Discovery.

Golden Ivan Property

Power Nickel has announced it plans to spin out via a Plan of arrangement the mining properties it controls in British Colombia (Golden Ivan) and in Chile. It plans to complete this in Q1 2024. The new Company Pan American Gold Equities will update exploration plans at that time.

Golden Ivan is located approx. 3 kilometers to the east of Stewart, BC in the heart of the Golden Triangle. The Golden Ivan property consists of thirteen (13) mineral claims, all in good standing, for a total area of approximately 797 hectares.

On January 14, 2021, the Company announced it finalized an agreement dated October 7, 2020 to acquire 100% of the Golden Ivan property via a series of option payments and work commitments. On June 29, 2021, the agreement was revised to eliminate all the cash payments and work commitment and expedite the payment by shares while reducing the overall quantity of shares by 1,000,000 shares from the original agreement. The revised terms are as follows:

1. 3,900,000 common shares within five Business Days after receipt of the TSXV Approval. These common shares were valued at $1,209,000 based on the trading price of the Company's shares on the date of issuance.
2. 6,500,000 common shares on or before June 29, 2021 subject to TSXV Approval. These common shares were valued at $1,235,000 based on the trading price of the Company's shares on the date of issuance.

As a result, the Company acquired a 100% interest subject only to a 2.5% NSR royalty. The Company retains the option to purchase 40% of this royalty for a one-time payment of $1,000,000.

Golden Triangle has reported mineral resources (past production and current resources) in total of 67 million ounces of gold, 569 million ounces of silver and 27 billion pounds of copper. This property hosts two known mineral showings (gold ore and magee), and a portion of the past-producing Silverado mine, which was reportedly exploited between 1921 and 1939. These mineral showings are described to be Polymetallic veins that contain quantities of silver, lead, zinc, plus/minus gold, and plus/minus copper.

In the summer of 2021, a highly successful prospecting and geologic mapping program has resulted in the discovery of two new high grade gold zones yielding 16.2 grams-per-tonne (g/t) gold (Au) and 15.1 g/t Au in outcrop.

The 2021 Golden Ivan Property campaign completed during July and August 2021, included the collection of 210 surface rock samples including 7 channel samples, in addition to reconnaissance geologic mapping and whole rock geochemical analysis throughout the Property. A total of 17 of the 210 rock samples returned greater than 0.1 g/t Au, and up to 16.2 g/t Au from the newly discovered Lone Goat Showing, and 15.1 g/t Au over 0.75 metres from a channel sample at the newly discovered Molly B. East showing in addition to significant silver and base metal values (Table 1).

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