SILVER GRAIL RESOURCES LTD.

Management’s Discussion & Analysis for the Year Ended March 31, 2020

2130 Crescent Road Victoria, BC V8S 2H3 Tel: 778-430-5680 / Fax: 778-430-5681 E-Mail: [email protected] Website: www.silvergrail.com

MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED MARCH 31, 2020

The following management’s discussion and analysis of the financial condition of Silver Grail Resources Ltd. (“Silver Grail” or the “Company”) and results of operations of the Company, prepared as of July 29, 2020, should be read in conjunction with the audited financial statements and the notes thereto for the year ended March 31, 2020 which were prepared in accordance with International Financial Reporting Standards. All amounts are expressed in Canadian dollars unless otherwise indicated.

OVERALL PERFORMANCE

The Company is currently an exploration stage company engaged in the acquisition and exploration of mineral properties, primarily in the Stewart region of northwestern British Columbia. Emphasis at this point is on exploring for silver and cobalt, and to a lesser degree gold, copper, zinc and molybdenum deposits.

Subject to the results of ongoing exploration and development activities, the Company may require additional capital in the future to continue these exploration and development programs and the administrative costs associated with them. As much as possible, the Company will continue to seek third parties to undertake options on its remaining properties. Again, in addition to the results of ongoing programs, general trends in the overall conditions of the mining industry will largely dictate the Company’s ability to raise capital.

OUR BUSINESS

The Company’s primary focus for the last thirty-five years has been exploration for gold and silver on its many claims in the Stewart region of northwestern British Columbia. In 2018 it also acquired two cobalt properties in British Columbia, the Pacifico and Kobold.

The Stewart region, which forms the most prospective portion of the Golden Triangle of northwestern British Columbia, has seen several important developments in the past three years. Foremost among these is Pretium’s Resources’ decision to spend approximately $1 billion on construction of its Brucejack Lake property, located 50 miles north of Stewart. The mine is now in production and has produced several quarters of profitable production. Closer to Stewart, IDM Mining received federal and provincial approval for start-up of its Red Mountain gold property and was subsequently acquired by Ascot Resources. Ascot, in turn, owns the previously producing Premier Gold mine as well as the neighboring Silver Coin gold deposit, both of which it intends to place into production in the near future. Two companies with established resources in the immediate area of Silver Grail’s claims—Auryn Resources (owner of the Homestake gold and silver property which adjoins Silver Grail’s Fiji property to the east) and Dolly Varden Silver Corp.—have also been busy in 2018-19 advancing their prospects. All of these events are positive indicators that the area is once again attracting interest from the investment community, a development which bodes well for the Company.

The Company carried out minor programs in 2019 on its Fiji claims and very recently on its Pacifico property in northwestern British Columbia. Results from both properties can be considered encouraging.

EXPLORATION

Stewart Region Properties

Clone Property

The Clone property was originally owned 50-50 with Teuton Resources Corp. (“Teuton”) and then owned 50% by Makena Resources and 25% each by the Company and Teuton. In September of 2017, Silver Grail’s and Teuton’s interest in the Clone property were both optioned out to Sunvest Ventures. Terms of the option call for 5,000,000 shares of Sunvest to be issued to Silver Grail/Teuton and $200,000 cash paid to Silver Grail/Teuton, collectively, over a two year period. Work commitments totaling $1.95 million are also to be carried out over three years. Silver Grail/Teuton, collectively, will share a 2% NSR, onehalf of which can be repurchased for $1.5 million. At the same time, Makena sold its 50% interest to Sunvest.

Sky Gold Corp., formerly Sunvest Ventures, conducted a large-scale exploration program in 2019 on the Clone, including drilling of several prospects. Various targets were drilled, including some within the Main zone on the property which producing encouraging results. On Nov. 6, 2019 Sky Gold served notice on the Company that it was not continuing with the option. Present ownership of the Clone property is now Silver Grail 25% and Teuton Resources Corp. 75% (Teuton recently purchased 50% of the property from private interests).

The Clone property is located about 16 kilometers southeast of Stewart, British Columbia. High-grade gold and gold-cobalt shear structures were identified on the Clone property in 1995 and subsequently drilled in 1996-7. Although several high-grade intersections were obtained in the drilling, continuity of mineralization was erratic. A structural study carried out in 1998 has helped to elucidate controls for the gold mineralization.

On November 30, 2005, the Company and joint owner Teuton announced that they had optioned the Clone property to Canasia Industries Corporation. Under the terms of the agreement, Canasia could earn a 50% interest in the Clone property by carrying out $1,800,000 in exploration over the five year term of the option. Option cash payments totaling $120,000 and share payments of 200,000 were to be split evenly between the Company and Teuton.

An Aeroquest EM-Mag survey flown over the Clone property in early 2006, financed by Canasia, disclosed a number of geophysical anomalies. The most promising, dubbed the Derby zone, lies 800m northeast of the Main zone and consists of a number of parallel EM conductors.

During the 2006 field season, all seven holes drilled into the Main Zone intersected gold mineralization. One of the better holes returned 35.5 feet grading 0.178 oz/ton gold. Lingering snow at high elevations precluded a thorough investigation of the geophysical conductors detected during the airborne survey carried out earlier in the year. For details, please refer to the News Release dated November 9, 2006 on file with SEDAR.

A 3,000 ft. drill program was carried out by Elite Diamond Drilling of Revelstoke, BC for the 2008 program. Ten holes were drilled and results were reported on SEDAR on October 19, 2008. A two-phase drilling program was carried out in 2009, funded by Canasia. In the first phase 20 holes were drilled with fair to excellent results as detailed in the News Release dated October 5, 2009 on file with Sedar. In the second phase a further 15 holes were drilled with generally excellent results. Results for this second phase are outlined below:

The holes were drilled between Trenches 4, 14 and 15 on the H-1 structure and were designed to guide a bulk sampling program. Dip angles for the holes were either minus 20, 30 or 40 degrees. For the purposes of calculating the true width coefficient, the zone was estimated to be vertically dipping.

Mineralization is localized within highly silicified semi-massive to massive hematite-specularite and gold occurs as fine disseminations and is associated with the oxide mineralization. The major lithology is observed to be light grey to green andesitic pyroclastics intercalated with fine grained to aphanitic andesite. Clasts are subangular to angular, matrix supported, and range in size from 1-3cm. Quartzcalcite stockwork pervades the unit in moderate abundance.

In 2010 the Company carried out a 16 hole drilling program on the Clone and undertook a bulk sampling program, paid for by optionee Canasia Industries Inc. Results of the drilling program were encouraging and are on file with SEDAR, dated October 15 and 28, 2010. Altogether 38 tons were airlifted out of the property during the bulk sampling program with each ton carefully assayed. Average for the 38 tons came out to 2.0 oz/ton gold.

The 2011 bulk sampling program consisted of 102 tons with an average grade of 4.0 oz/gold per ton which was removed from the site and shipped to Stewart by helicopter. Metallurgical studies have been completed which show that up to 76% of the gold can be liberated by a fine grind followed by gravity separation. An abbreviated continuation of the ongoing bulk sampling program was carried out on the Clone property in 2012. The Company has sent some of the bulk sample for processing and payment was received during the quarter ended Sept. 30, 2014.

In 2016 a diamond drilling program consisting of 7 holes was completed on the Clone property targeting two separate areas. Several of the holes had significant values in gold, the two best of which contained intersections averaging 6.43 metres of 17.83 g/t gold and 7.01 metres of 10.38 g/t gold (please refer to sedar.com, Feb. 20, 2017, for full details).

Mt. Boy Property

Silver Grail acquired the key claims of the historic Mountain Boy property in the early 1990’s. The property is situated 12 miles north of Stewart, BC, on American Creek. Several small, high-grade shipments of silver-bearing ore were shipped from the property in the 1920’s and 30’s. Two veins, the Main and HighGrade, have been explored by a network of tunnels.

In the late 1990’s, Silver Grail optioned the property to Mountain Boy Minerals Ltd. (“Mountain Boy”) who subsequently earned a 50% interest by making substantial cash payments to Silver Grail. Mountain Boy constructed a road into the property from the highway, rehabilitated several adits, took large bulk samples and carried out diamond drilling programs.

In January 2004, the Company granted Mountain Boy an option to earn its remaining 50% interest for cash payments totaling $237,500 over four years.

Subsequently, the Company revised its previous agreement with Mountain Boy and accepted $25,000 and 250,000 shares of Mountain Boy as a final payment on Mountain Boy’s purchase of the Company’s 50% interest in the Mt. Boy property. The Company retains a 2% Net Smelter Royalty, which can be purchased by Mountain Boy for $1,000,000 until 18 months following the commencement of commercial production. The final payment has been received by the Company and the revised agreement approved by the TSX Venture Exchange.

Konkin Silver Property

The Konkin Silver property is located 29 kilometers east of Stewart, British Columbia. Present access is by helicopter. Silver Grail and Teuton acquired the Konkin Silver property by staking in 1993-94, as part of a joint acquisition and exploration effort in the region surrounding the Red Mountain gold prospect. Prospecting in 1994 uncovered the central “Konkin Silver” showing, a bow-shaped structure carrying high silver values. It consists of carbonate, quartz, barite, galena, sphalerite and rare ruby silver and native silver in an arcuate structure spanning 35 metres. High silver values are most closely associated with galena which occurs as fine coatings on fractures, as coarse crystalline blebs and as disseminated grains. Maximum thickness of the feature appears to be in excess of 10 metres. Trenching of the Konkin Silver showing returned values up to 9.0m grading 34.94 oz/ton silver, 2.30% lead and 2.02% zinc.

Other similar, but smaller zones were found nearby. The Konkin Silver showing was drill-tested by Silver Standard under option in 1995, but several short holes failed to encounter high-grade silver mineralization conformable with surface results. The following year the property was returned to Teuton/Silver Grail. In

2002 a small program of rock sampling uncovered a new zone of low-grade, but extensive, silver mineralization.

After a brief property visit in 1998, Ross Sherlock, PhD, confirmed that the Konkin Silver prospect was located within a VMS environment.

Teuton and Silver Grail acquired by purchase two additional claims within the boundaries of the Konkin Silver property. These claims cover two silver-bearing showings similar to those on the original ground.

During the 2007 field season, Teuton and Silver Grail resumed drilling on the Konkin Silver property, targeting the King Konk and Konkin Silver structures. The program has been completed and results are presented in the News Release on file with SEDAR dated March 5, 2008. In 2008, minor surface sampling was carried out on the property with mixed results. One day was spent on the property by a prospecting crew in 2017, but they were not able to reach the target area due to steepness of the ground.

A Geotech crew in 2018 flew a ZTEM survey over the Konkin Silver property as part of a larger survey including properties to the north. The Geotech report indicates that two areas on the property are prospective for the discovery of gold mineralization (Targets A-9 and A-10) and one area prospective for porphyry mineralization (Target P-3). No work was carried out in 2019.

- Tonga Fiji Property

The Company and Teuton jointly own the Tonga-Fiji property situated 24 kilometers north of Alice Arm, British Columbia.

In 2005, a helicopter airborne EM-Mag survey was commissioned over the Tonga property, as a precursor to diamond drilling. Due to inclement weather, this survey was postponed until early JanuaryFebruary 2006. Results show a large zone of anomalous EM responses that is coincident with silver and molybdenum geochemical anomalies obtained in earlier soil, silt and talus fine surveys.

In September 2006, a drilling program was started on the Tonga property and completed in early October. Seven holes were drilled at various sites, testing geochemical and geophysical targets. Results are detailed in a News Release dated January 16, 2007, on file with SEDAR.

To the north of the Tonga, on the adjoining Fiji property surface prospecting in 2006 disclosed two promising zones containing gold and silver mineralization. This area was tested by drilling in 2007. Assay results were received and are detailed in the News Release on file with SEDAR dated March 5, 2008.

No further work has been done on the property in the interim. However, Homestake Resources (formerly Bravo Gold), owners of the adjoining Homestake property, continue to add tonnage to the resource on the two deposits occurring east of the common boundary between the Fiji and Homestake properties. In 2012, Homestake reported discovery of a new zone which lies only a few hundred meters east of the common boundary. This new zone was drilled by Homestake in 2012 with positive results. Homestake recently announced an increase in its gold and silver resources on the property. On July 11, 2016 Homestake was officially taken over by Auryn Resources.

Auryn recently announced its 2017 exploration plans which include 15,000m of drilling as well as extensive prospecting and sampling along favourable structural corridors. Two of these corridors have been drawn as going northwest right to the common border between the Homestake Ridge property of Auryn and the Fiji property of Silver Grail.

During the 2019 field season Company personnel discovered a new structure at least 300m long that had been exposed by retreating ice on the Fiji property. One sample taken from a lower portion of the zone returned encouraging silver values.

Midas Property

The Midas claims, originally jointly owned with Teuton Resources, are situated 28 km east of Stewart, BC, and adjoin the Konkin Silver property to the north, and the Del Norte property of Teuton to the south.

The claims cover part of a long, northerly-trending contact zone between volcanic and sedimentary rocks which recent exploration has shown to be related to multiple zones of gold-silver mineralization. Willoughby Creek, which cuts through the property is a well-known placer gold bearing stream.

Prospecting in the 3-ounce area near the border of the Del Norte/Midas claims resulted in the 2003 discovery of quartz float boulders grading up to 3 oz/ton gold, near the same volcanic-sediment contact which hosts the LG mineralization some 6 miles to the north. One day of trenching in 2004 partially exposed a quartz vein mineralized with tetrahedrite.

In 2005, when Teuton optioned its northerly adjoining Del Norte property to Sabina Silver Corp. (“SBB”TSX), the Midas claims were also included in the agreement. The combined property is now known as the Del Norte-Midas.

In 2006, Sabina Silver drilled three holes into the 3-Oz showing on the Midas property, encountering promising intercepts of bulk tonnage-type gold mineralization spatially related to a gold-rich vein. The best result was in Hole SDN-06-02 which returned a wide interval of gold mineralization grading 2.52 g/t gold (0.07 oz/ton) over 32.4 meters. True width is estimated at 29.2 meters or 96 feet. Within this intersection, a sub-interval ran 26.77 g/t gold (0.78 oz per ton) over 0.7 meters.

In 2007, Sabina Silver drilled an additional 9 holes into the 3-Oz showing. Results are detailed in the News Release on file with SEDAR dated December 3, 2007. By spending $2,500,000 on the combined Del Norte-Midas property, Sabina has now earned a 50 interest.

In July of 2014, Sabina entered into a purchase and sale agreement with Teuton whereby Teuton purchased all of Sabina’s 50% interest in the Del Norte-Midas property. Ownership of the Midas property is now 75% Teuton, 25% Silver Grail.

A Geotech crew in 2018 flew a ZTEM survey over the Midas property as part of a larger survey including properties to the north. The Geotech report indicates that two areas on the property are prospective for the discovery of gold mineralization (Targets A-7 and A-8) and one area prospective for porphyry mineralization (Target P-2). No work was undertaken in 2019.

Bay Silver Property

The Bay Silver property controls the old United Empire mine from which limited production of high-grade silver was seen in the 1920’s. Ore from the mine was shipped to the valley floor below by way of a tramline, portions of which still remain on the property. The property contains numerous silver-rich showings some of them developed by hundreds of feet of tunnels. In 1983 and 1984, high-grade ore was trenched from silver-lead-zinc veins, first explored in 1919. The No. 4 zone consists of a 1.2-metre-wide vein which strikes northeast and dips 20 degrees southeast. The vein contains 0.6 metres of massive galena, sphalerite and tetrahedrite in the hangingwall and 0.6 metres of quartz with disseminated sulphides in the footwall.

In previous assessment reports, a 0.61-metre chip sample across the vein assayed two grams per tonne gold, 8679.7 grams per tonne silver, 20.3 per cent lead and 20.2 per cent zinc. The No. 3 zone is reported as being located about 100 metres south of the No. 4 zone. This shear zone contains long lenses of quartz mineralized with pyrite, pyrrhotite, galena and sphalerite. These lenses are up to 1.8 metres wide associated with a stockwork of sulphide stringers and are hosted in schist which has a strike of 150 degrees.

The lower showings, 300 metres east of the No. 4 zone, consist of two quartz-sulphide veins. The southernmost vein lies along the contact between a large granodiorite dike on the east and hornfelsed argillite to the west. The vein contains lenses of pyrrhotite, sphalerite, galena and tetrahedrite in a gangue of quartz. In a previous assessment report a 0.91-metre chip sample across the vein assayed 42.30 grams per tonne gold and 1,273 grams per tonne silver. A second vein 120 metres to the north assayed 15.96 grams per tonne gold and 2,268 grams per tonne silver over a narrow width.

The property is jointly owned by Silver Grail Resources and Teuton Resources Corp.

In August of 2018 it was optioned to Auramex Resources. To acquire a 100% interest in the Bay Silver property Auramex was required to make an initial payment of $10,000 and to issue 100,000 shares upon Exchange acceptance, to be divided equally between Teuton and Silver Grail. To complete the option, payments aggregating a further $110,000 and 400,000 shares are required over the next four years, again to be divided equally. Teuton and Silver Grail will retain a collective 2% NSR, one half of which can be bought down for $1 million, with a minimum advance annual royalty of $50,000 to begin after 7 years.

Silver Crown 6 Property

On January 17, 2007 (see News Release of same date, on file with Sedar), the Company and Teuton optioned out a single claim from the southern portion of the Silver Crown property (Silver Crown 6 claim) to Decade Resources.

The claim optioned out to Decade Resources has become important owing to the discovery of goldbearing mineralization on Decade's Red Cliff property which adjoins the Silver Crown 6 claim to the south. Decade reported several long intervals of gold-bearing mineralization on its Montrose zone, which has been interpreted as striking into the Silver Crown 6 claim. Decade has constructed roads into the Silver Crown 6 in 2012 and has taken surface samples. The Company, along with Teuton, has granted Decade an extension until December 31, 2019 in order to carry out the $1.5 million work expenditure requirement under the option. In return for granting the extension, Decade agreed to forego the buyback on ½ of the NSR payable to Teuton and Silver Grail and also to pay Teuton and Silver Grail $10,000 prior to August 31, 2019 which was received by the Company during the year.

During the year ended March 31, 2020, Decade informed the Company that through inadvertence it had not filed assessment work on the property in time and the property had come open and was staked by another party. Negotiations are underway with Decade to compensate the Company for its lost rights under the option agreement.

Silver Crown Property

The Company also owns a 50% interest in several claims surrounding the Silver Crown 6 property, Teuton Resources owns the other 50% interest. These 11 claims, known as the “Silver Crown” property, were optioned to Auramex in 2019 in a deal allowing Auramex to earn a 100% interest by paying Teuton and Silver Grail $120,000 and 500,000 shares of Auramex over a four year period. A 2% NSR is payable, one half of which can be purchased for $1 million; a $50,000 annual advance royalty is payable after 7 years.

Additional Stewart region properties

The Company, jointly with Teuton, owns interests in several other properties throughout the Stewart region that were acquired in the previous years by staking. Minor prospecting was carried out on certain of these claims in 2004. Among these properties, the Silver Baron (formerly Silver Bell property), Gold Mountain (formerly called the Bud) and Ram claims were all the subject of airborne geophysical surveys in early 2006. Several interesting targets were detected during the surveys and these were to be followed up by ground-truthing and sampling during the 2006 field season, but this was precluded by lack of finances.

Silver Grail participated in a small way in Teuton Resources’ option of its King Tut and Tuck properties to Pretium Resources in July of 2015. Pretium requested that one of the Silver Crown claims be included in the option property because it needed surface rights under the Silver Crown claim for its powerline running from Brucejack Lake to the powerhouse at Divide Lake. It was agreed that the extra claim be added for an additional $100,000, bringing total consideration from $1.7 to $1.8 million. Silver Grail owns half of this claim jointly with Teuton, so it will receive its pro rata share of any option payments made under the agreement ($50,000 of the $1.8 million option payments made over four years). It’s share of the first payment of $250,000 made pursuant to the option, was 50% of 1/18 of $250,000, or $6,944. An additional $6,944.44 was received as part of the $250,000 payment made in January of 2016, another $6,944 was received in July of 2016, and yet another $6,944 was received in July of 2017. In July of 2018, Silver Grail received $11,111.11 as its share of a $400,000 payment made by Pretium and a further $11,111.11 was received in July of 2019.

New Westminster Division

Harrison Lake Property

The Company acquired by staking in 1998 the Andy claims on Talc Creek, east of Harrison Lake, about 100 kilometers east of Vancouver, BC. The Andy property was optioned in 2001 to Leader Mining International Inc. (“Leader” “LMN”). According to the option agreement LMN could earn a 51% interest in the property by spending $500,000 over a four year period, paying $10,000 upon signing (paid) and a further $40,000 along with 100,000 common shares of LMN upon vesting of the option, after which further work would have proceeded as a joint venture.

The Andy property covers the western limits of a 10 kilometer long ultramafic intrusive body, known from surface sampling and diamond drilling to contain magnesium (Mg).

In 2012, the property was merged with the adjoining Roman claims held by Teuton Resources Corp., with the combined property now 50% owned by Teuton and Silver Grail. A 3D IP survey was conducted over the nickel soil geochem anomalies. Three anomalous areas of chargeability were defined during the survey, related to the nickel soil geochemical anomalies.

The Company and Teuton have completed a first phase of exploration consisting of soil geochemical surveys and prospecting on the Roman property in 2018. This was designed to expand known anomalous areas of nickel and cobalt. Assays have been received and generally are consistent with work done in earlier years (previously, cobalt values in soils have run from trace to over 1,300 ppm). The cobalt price has recently reached a level of over $40US per pound on the strength of increased demand related to its use in batteries for electrical cars (primarily) but has since backed off to the $14/lb level.

Cobalt properties

The Company in 2018 acquired five cobalt properties located throughout British Columbia, based on the presence of highly anomalous levels of cobalt in stream geochemistry (as reported by BC Regional Geochemistry Surveys), including the highest value in the province. The claims were acquired for cost of staking from a private company owned by the President of Silver Grail; the private company will retain a 2% NSR. Two properties, the Pacifico and Kobold were kept, the remaining three were dropped.

Preliminary silt sampling and prospecting has been carried out on the Pacifico property which confirmed the presence of anomalous cobalt as defined by regional geochemical surveys. An expanded geochem survey and rock geochem program was recently undertaken and results confirmed anomalous cobalt values along a stream course. In addition, three separate areas on the property were found to contain anomalous copper values. In October of 2019, a crew was sent into the property to comprehensively silt sample five streams. Results were encouraging with four streams reporting highly anomalous values in cobalt and manganese. Further work is planned in 2020.

A small prospecting program carried out over the Company’s Kobald claims in 2018 returned values that were anomalous in both copper and cobalt. No work was carried out in 2019.

SELECTED ANNUAL INFORMATION

This discussion should be read in conjunction with the Company’s annual audited financial statements dated March 31, 2020, which are incorporated by reference to this discussion.

The following table sets forth selected annual audited financial information of Silver Grail from the last three completed financial years:

The net loss in the three years has ranged from $46,799 to $185,906. The larger amount in 2019 is due to a share-based compensation charge of $113,038 in fiscal 2019 as opposed to $Nil in fiscal 2020. Losses have been kept low due to the Company’s cost-cutting policy initiated several years ago, the principal point of which has been that management does not take any salary---a policy which may be reviewed once market conditions improve.

RESULTS OF OPERATIONS

For the three month period ended March 31, 2020 compared to the three month period ended March 31, 2019

Net loss for the quarter ended March 31, 2020 totaled $6,563 (or $nil per share) versus a net loss of $32,524 (or $nil per share) for the comparable quarter in 2019. In comparison to other venture companies, administrative costs are very much on the low end of the scale, so that the difference between the two years is not particularly significant.

For the year ended March 31, 2020 compared to the year ended March 31, 2019

Net loss for year ended March 31, 2020 totaled $53,914 (or $nil per share) versus a net loss of $185,906 (or $0.01 per share) for the comparable period in fiscal 2019. The primary reason for the difference can be explained by a share base compensation charge of $113,038 in the year ended March 31, 2019 as compared to a share base compensation charge of $nil in the year ended March 31, 2020. Also, option proceeds in excess of capitalized costs were $41,111 in the year ended March 31, 2020 as compared to $15,510 in the year ended March 31, 2019. Administrative items were roughly similar during the two years.

SUMMARY OF QUARTERLY RESULTS

The following is a summary of our company’s financial results for the eight most recently completed quarters:

Beginning in September 2013, management began a cost-cutting initiative which sharply reduced quarterly costs. Management and staff volunteered to forego their salaries in order to preserve capital. This cost-cutting initiative has been extended to the past eight quarters. For the most part, administrative expenses have been kept to under $20,000 a quarter.

LIQUIDITY

As at March 31, 2020, the Company had current assets of $96,965 compared to current assets of $145,146 as at March 31, 2019. The Company had current liabilities of $133,865 at March 31, 2020 compared to $136,092 as at March 31, 2019, which resulted in a working capital deficiency of $36,900 at March 31, 2020 compared to working capital of $9,054 as at March 31, 2019.

The Company received $41,111 in option proceeds in excess of capitalized costs during the year ended March 31, 2020 compared to $15,510 received during the previous year. In July of 2020, the Company completed a private placement which netted treasury $400,000. This money will be used for exploration on the Company’s properties, to pay back moneys owed to Teuton Resources Corp. and for general working capital.

The Company anticipates it may need additional capital in the near future to finance ongoing exploration of its properties, such capital to derive from mineral property option payments and the completion of further private placements.

Year ended March 31, 2020 compared to the year ended March 31, 2019:

Operating activities

During the year ended March 31, 2020, the Company used cash of $33,120 for operating activities compared to the use of $48,804 during the year ended March 31, 2019. Overall, the Company had limited operating activity and there was no significant change in business operations.

Investing activities

During the year ended March 31, 2020 the Company used net cash of $9,600 from investing activity as compared to $15,687 received for the comparable period in fiscal 2019. The Company spent $22,100 in exploration and evaluation expenditures during the year ended March 31, 2020 compared to $9,313 for the comparable period in fiscal 2019. The Company received $12,500 in mineral property option payment proceeds in the year ended March 31, 2020 compared to $25,000 received during the comparable period in fiscal 2019.

Financing activities

During the year ended March 31, 2020, the Company received cash of $48,000 from proceeds of exercise of share purchase warrants as compared to $nil in the comparable period in fiscal 2019. During the year ended March 31, 2020, the Company made repayments of $nil to related parties as compared to $103,491 in the year ended March 31, 2019.

Capital Management

The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of cash, marketable securities, and equity comprised of issued capital and share-based payment reserve.

The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its Board of Directors, will balance its overall capital structure through new share issues or by undertaking other activities as deemed appropriate under the specific circumstances.

The Company is not subject to externally imposed capital requirements and the Company’s overall strategy with respect to capital risk management remains unchanged from the year ended March 31, 2019.

OFF BALANCE SHEET ARRANGEMENTS

There are no off-balance sheet arrangements to which the Company is committed.

TRANSACTIONS WITH RELATED PARTIES

• (a) As at March 31, 2020, the amount of $246 (March 31, 2019 - $674) was owed to the President of the Company, Dino Cremonese, P.Eng, which is non-interest bearing, unsecured and due on demand.

• (b) As at March 31, 2020, the amount of $117,480 (March 31, 2019-- $123,048) was owed to Teuton which is non-interest bearing, unsecured and due on demand. The Company carries on joint exploration activity with Teuton and has done so for the past 30 years. Over the past 21 years, a balance has been owing from the Company to Teuton, or to the Company from Teuton (for 13 of those 21 years the balance was owed from Teuton to the Company). The balance owing to Teuton will be paid back by the proceeds from the private placement completed in July of 2020.

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

Fair Values

Assets and liabilities measured at fair value on a recurring basis were presented on the Company’s statement of financial position as at March 31, 2020 as follows:

The fair values of other financial instruments, which include amounts receivable, and accounts payable and accrued liabilities, and amounts due to related parties, approximate their carrying values due to the nature and relatively short-term maturity of these instruments.

Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash, marketable securities, and due from related parties. The Company limits its exposure to credit loss by placing its cash and marketable securities with high credit quality financial institutions. Amounts receivable consists of GST receivable from the Government of Canada. The carrying amount of financial assets represents the maximum credit exposure.

Foreign Exchange Rate and Interest Rate Risk

The Company is not exposed to any significant foreign exchange rate or interest rate risk.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company currently settles its financial obligations out of cash. The ability to do this relies on the Company raising equity financing in a timely manner and by maintaining sufficient cash in excess of anticipated needs.

Price Risk

The Company is exposed to price risk with respect to commodity prices. The Company’s ability to raise capital to fund exploration and development activities is subject to risks associated with fluctuations in the market price of commodities.

ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE

The Company has adopted the following new standards, along with any consequential amendments, effective April 1, 2019. These changes were made in accordance with the applicable transitional provisions and did not impact the Company’s financial statements.

IFRIC 23, “Uncertainty over Income Tax Treatments”

IFRIC 23 provides guidance on the accounting for current and deferred tax liabilities and assets in circumstances in which there is uncertainty over income tax treatments. The Interpretation is applicable for annual periods beginning on or after January 1, 2019. Earlier application is permitted. The Interpretation requires: (a) an entity to contemplate whether uncertain tax treatments should be considered separately, or together as a group, based on which approach provides better predictions of the resolution; (b) an entity to determine if it is probable that the tax authorities will accept the uncertain tax treatment; and (c) if it is not probable that the uncertain tax treatment will be accepted, measure the

tax uncertainty based on the most likely amount or expected value, depending on whichever method better predicts the resolution of the uncertainty.

IFRS 16, “Leases”

IFRS 16 replaces IAS 17, “Leases” and the related interpretative guidance. IFRS 16 applies a control model to the identification of leases, distinguishing between a lease and a service contract on the basis of whether the customer controls the asset being leased. For those assets determined to meet the definition of a lease, IFRS 16 introduces significant changes to the accounting by lessees, introducing a single, onbalance sheet accounting model that is similar to current finance lease accounting, with limited exceptions for short-term leases or leases of low value assets. Lessor accounting is not substantially changed. The standard is effective for periods beginning on or after January 1, 2019.

LEGAL PROCEEDINGS

There are no legal proceedings.

ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT SIGNIFICANT REVENUE

An analysis of material components of the Company’s general and administrative expenses is disclosed in the interim financial statements for the period ended March 31, 2020. An analysis of the material components of the exploration and evaluation assets is disclosed in the notes to the unaudited financial statements for the period ended March 31, 2020 to which this MD&A relates.

During the year ended March 31, 2020, the Company expended $40,130 on mineral property expenditures, allocated as follows:

DISCLOSURE OF OUTSTANDING SHARE DATA

Share Capital

As at July 29, 2020, the Company has 32,374,622 shares issued and outstanding.

Share Purchase Warrants

As at July 29, 2020, the Company had 2,000,000 share purchase warrants outstanding, with each warrant entitling the owner to purchase an additional share of the company at $0.15 up until July 13, 2021.

Stock Options

As of July 29, 2020, the Company had 1,900,000 stock options outstanding, all granted to directors. The stock options can be exercised into common shares of the Company at a price of $0.07 until September 21, 2022.

SUBSEQUENT EVENTS

On July 13, 2020, the Company completed a non-brokered private placement consisting of 4,000,000 units at a price of $0.10 per unit for gross proceeds of $400,000. Each unit consists of one common share and one-half common share purchase warrant; each whole warrant is exercisable at a price of $0.15 for a period of one year. The warrants are subject to acceleration at the Company’s discretion in the event the Company’s common shares trade on a volume weighted average price (VWAP) basis of $0.20 or more for a period of 10 consecutive trading days.

RISK FACTORS

In March 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. The impact on the Company is not currently determinable but management continues to monitor the situation.

OTHER

Additional information relating to the Company’s operations and activities can be found by visiting the Company’s website at www.silvergrail.com and by accessing the Company’s news releases and filings on SEDAR at www.sedar.com.

SILVER GRAIL RESOURCES LTD.

2130 Crescent Road Victoria, BC V8S 2H3 Tel: 778-430-5680 Fax: 778-430-5681 E-Mail: [email protected] Website: www.silvergrail.com

CORPORATE INFORMATION

DIRECTORS

OFFICERS

Dino Cremonese, P.Eng., Victoria, BC Robert Smiley, West Vancouver, BC Dr. Bill Pfaffenberger, Victoria, BC Barry Holmes, Crofton, BC

Dino Cremonese, P.Eng. President and CEO

Robert Smiley,CFO

Deborah Shilling Secretary

Registered Office & Corporate Counsel

Morton & Co. 1750-750 West Pender Street Vancouver, BC V6C 2T8

Transfer Agent

Computershare Investor Services Inc. 3^rd Floor, 510 Burrard Street Vancouver, BC V6C 3B9

Auditors

Manning Elliott LLP 1700 – 1030 West Georgia Street Vancouver, BC V6E 2Y3

Trading Symbol

SVG (TSX Venture Exchange) KD7 (Frankfurt Stock Exchange)