CMX Gold & Silver : MDA September 30 2021.pdf

CMX GOLD & SILVER CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following discussion is management's analysis of CMX Gold & Silver Corp.'s (the "Company" or "CMX") operating and financial data for the nine months ended September 30, 2021 and 2020 as well as management's estimates of future operating and financial performance based on information currently available. It should be read in conjunction with the unaudited consolidated financial statements and notes for the nine months ended September 30, 2021 and 2020.

This Management's Discussion and Analysis ("MD&A") and the consolidated financial statements and comparative information have been prepared in accordance with IFRS.

Technical disclosure for the Clayton Property included in this MD&A has been reviewed by Richard Walker, P.Geo., a Qualified Person under National Instrument 43‐101 - Standards of Disclosure for Mineral Projects ("NI 43‐101").

All financial information in this MD&A is stated in Canadian dollars, the Company's reporting currency, unless otherwise noted. The MD&A was prepared effective November 29, 2021. Additional information relating to CMX can be found at www.sedar.com.

MATERIAL FORWARD-LOOKING STATEMENTS

This MD&A contains forward-looking information as contemplated by Canadian securities regulators' Form 51-102F1, also known as forward-looking statements. All estimates and statements that describe the Company's objectives, goals or future plans are forward-looking statements. Readers are cautioned that the forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated by the Company and described in the forward-looking statements. The Company will issue updates where actual results differ materially from any forward-looking statement previously disclosed.

RESPONSIBILITY OF MANAGEMENT

The preparation of the financial statements, including the accompanying notes, is the responsibility of management. Management has the responsibility of selecting the accounting policies used in preparing the financial statements. In addition, management's judgment is required in preparing estimates contained in the financial statements.

ABOUT CMX GOLD & SILVER CORP.

CMX is a junior mining company with a silver-lead-zinc property in the United States of America. The Company's focus is the development of its 100%-owned Clayton property located in Idaho, U.S.A., with the primary focus being to determine the feasibility of reactivating the mine. The Clayton property has historically produced silver, lead and zinc with minor gold. The property is held by CMX's wholly owned subsidiary, CMX Gold & Silver (USA) Corp.

In Canada, the Company's shares trade on the Canadian Securities Exchange ("CSE") under the trading symbol "CXC", and in the USA, the Company's shares trade on the OTC Markets under the trading symbol "CXXMF".

2021 OVERVIEW

The Company's strategy is to proceed with work programs on the Clayton Silver Property, including further sampling of the mine dump, geophysical work on the mine site to delineate future drilling targets and preliminary engineering on the refurbishment of the mill.

To carry out further programs on the Clayton property, the Company is pursuing several funding programs. CMX has made significant progress attracting a strategic investor to provide multi-year funding for the Clayton project. Although there is no certainty that the financing efforts will be successful, the Company's goal is to secure funds for work programs on the Clayton property commencing in the fourth quarter 2021.

On February 23, 2021, 2,050,000 warrants exercisable at $0.10 per share expired.

On June 22, 2020, the Alberta Securities Commission (ASC) and the Ontario Securities Commission (OSC) issued cease trade orders ("CTO") for CMX's failure to file audited financial statements for the fiscal year ended December 31, 2019 and related continuous disclosure documents. On June 15, 2021, CMX was granted a partial revocation of the CTO issued by the ASC for the purpose of completing a private placement to raise capital to complete 2019 and 2020 audits of the Company's financial statements and to make all requisite regulatory filings. On June 30, 2021, CMX closed the private placement of 7,000,000 units at an issue price of $0.05 per unit, with each unit comprised of one common share and one common share

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purchase warrant exercisable for two years at $0.10 per share. The cash proceeds of the private placement were $200,000 for 4,000,000 units and $150,000 of debt was settled for 3,000,000 units.

On October 4, 2021, the ASC and OSC issued a Revocation Order revoking the CTO.

On November 19, 2021, the Company closed a private placement of 1,800,000 units at an issue price of $0.05 per unit, with each unit comprised of one common share and one common share purchase warrant exercisable at $0.10 per share expiring on November 19, 2023, for cash proceeds of $90,000.

On November 19, 2021, the Company closed a private placement of 1,670,000 units at an issue price of $0.05 per unit, with each unit comprised of one common share and one common share purchase warrant exercisable at $0.10 per share expiring on November 19, 2023, in settlement of $83,500 of debt.

On November 19, 2021, the Company closed shares-for-debt settlements of $1,193,625 with the issuance of 15,915,000 common shares at an issue price of $0.075 per share.

On November 24, 2021, the Company was reinstated for trading on the CSE.

COVID-19

Covid-19 had a major negative effect on the Company in 2020. Due to the negative economic effects of Covid-19 and the restrictions put in place by governments around the world, the Company was unable to close the RTO that had been announced on June 28, 2019. At that time, CMX had requested a halt in trading pending the closing of the transaction and the Company was unable to recommence trading once it was informed the RTO transaction would not be completed. This put the Company in a difficult position where it could not raise funds to complete the annual audits, resulting in the Company being unable to file its annual financial statements. This caused the CTO to be issued on June 22, 2020.

The Company has now received a revocation of the cease trade order and expects to be in a position to move forward with the Company's exploration efforts.

The Company continues to be affected by the restrictions in place due to Covid-19 with respect to management travel to the Clayton property in Idaho but anticipates an easing of these restrictions later in 2021.

Other than as disclosed above, the Company does not anticipate any further material negative effects from Covid-19 for the remainder of 2021, although determining what will happen past 2021 is impossible due to the inability to predict any future outbreaks of Covid-19.

RESULTS OF OPERATIONS

During the nine months ended September 30, 2021, the company realized a loss before financing expenses of $191,171 compared to a loss before financing expenses of $74,497 in 2020, resulting in an increase of $116,674. The Company's operations were heavily curtailed during 2020 due to Covid-19 resulting in a reduction of operating costs during that period. The Company has had an increase in activity as it completed raising equity funding and subsequently completed its audits and brought its regulatory filings up to date.

The following table itemizes the net loss from operations for the nine months ended September 30, 2021 and 2020.

SCHEDULE OF LOSS BEFORE FINANCING EXPENSES

			2021		2020
	Management fees	$	139,466	$	43,740
	General and administrative		10,832		16,772
	Listing and filing fees		34,943		8,138
	Professional Fees		6,200		-
	Mineral property expenditures		3,213		3,500
	Loss on foreign exchange		1,111		1,624
	Shareholder reporting & investor communications		722		723
	Expense recovery		(5,316)		-
	Loss before financing income (expenses)	$	191,171	$	74,497

EXPLORATION AND EVALUATION ASSETS

The Company's only exploration and evaluation asset is the Clayton Property, which has a carrying value of $658,065. Total exploration expenditures on the property to September 30, 2021, are $339,115. These expenditures are expensed in the period incurred for financial reporting purposes. Although there have been no material expenditures on the Clayton property during

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the nine-month periods ended 2021 and 2020, the Company expects to be able to raise the necessary funding to commence work on the Clayton project in early 2022

Clayton Property

The Clayton Silver Mine, discovered in the late 1800's and historically one of the most active underground mines in the Bayhorse Mining District in central Idaho for lead, zinc, silver, and copper with minor gold. Located approximately 30 km south-southwest of Challis in Custer County, central Idaho, the 276 ha (684 acre) property consists of 29 patented mining claims and two patented mills sites, comprising approximately 228 ha (565 acres). An additional six unpatented mining claims were filed in January 2015 and comprise 48 ha (119 acres) adjacent to and contiguous with the property to the south.

The Company has compiled and comprehensively reviewed available historical drilling and mining information for the Clayton Mine and the Clayton Silver Property. Information available in the public domain was obtained from both the United States and Idaho Geological Surveys. Several sub-surface mine plans were obtained from private sources, as well as the U.S. Department of the Interior, Office of Surface Mining. These data provide the basis for an initial compilation of the sub- surface workings tied to surface. The underground workings are flooded and inaccessible and, consequently, historical records are the only source of information available.

The Clayton silver-lead-zinc-copper mine had total production of 218,692 kg silver (7,031,110 oz), 39,358,903 kg lead (86,771,527 lbs), 12,778,700 kg zinc (28,172,211 lbs), and 754,858 kg copper (1,664,177 lbs), with 67 kg (2,154 oz) gold from an estimated 2,145,652 tonnes of ore mined between 1934 and 1985. Mineralization was originally discovered in 1877, with the mine operating almost continuously over 50 years until its closure in 1986 due to low metal prices.

The Clayton Mine was developed on eight levels to a depth of 1,100 feet (335 meters) below surface and is comprised of approximately 6,000 meters (19,690 feet) of underground development. Two major ore bodies were partially mined: the "South Ore Body" and the "North Ore Body". Both are tabular ore bodies raking northeast to depth. Production was initiated on the South Ore Body and development extended to the North Ore Body. As a result of lower silver prices, the mine was closed in early 1986. Mineralization is open to the north, the south and to depth, all of which is untested. For example, there is potential for resources to exist at shallower depths below and adjacent to the South Ore Body.

Historical records indicate the "South Ore Body" was mined from the 100-foot level to the 800-foot level, while the "North Ore Body" was mined from the 100-foot level to the 1100-foot level. Internal mine records from 1966 indicate a resource of 597,075 tonnes between the 800-foot level and 1300-foot level, having a weighted average grade of 3.83 oz Ag/t. Values for lead and zinc were not disclosed. Underground development on the 800-foot level was extended to the "North Ore Body", with subsequent development down to the 1100-foot level to access the ore. Records indicate that as of January 1, 1982, there were approximately 458,590 tonnes of ore identified between the 800 and 1100 foot levels. Of this resource, 52,800 tonnes were mined in 1983, 76,110 tonnes in 1984 and 102,258 in 1985, suggesting 227,422 tonnes have not been mined. Additional tonnage identified down to the 1530-foot level was not mined and, therefore, is interpreted to remain available. Significant potential is demonstrated in hole 1501-A, drilled in the mid-1960's, which penetrated the mineralized zone at 1,425 feet. At that depth, the hole intercepted 22 feet (6.70 m) of 4.07 oz Ag/t, 5.75% lead and 5.37% zinc (note: true width is unknown).

On November 23, 2015, CMX filed on SEDAR a NI 43-101 compliant technical report dated March 7, 2013 for the Clayton Silver Property.

Clayton Evaluation Program

In August 2014, representatives of the Company collected a total of 95 samples from 19 locations, including 16 locations on the Mine Dump situated immediately adjacent to the old Clayton Mine workings and extending to the south. An additional three locations were sampled on the Tailings Pile south of the mine. An aggregate of over 3,000 kilograms of sample material was collected. Sample locations were selected to ensure representative samples. CMX representatives were on site during sampling to ensure random sample selection. A tracked backhoe was used to trench to a maximum depth of approximately 12 feet and five representative samples, each weighing roughly 33 kg, were taken at 2-3 foot intervals for each location.

The preliminary results from analysis of the Mine Dump samples confirmed the presence of a suite of metals of potential interest. Panning of material from the Mine Dump has confirmed the presence of free, relatively coarse gold, while analysis of the samples documents the presence of gold in each sample. In particular, assays confirmed gold values up to 2.84 gm/t (Sample 11369) with an average of 0.80 gm/t for the 16 locations comprised of the initial suite of samples.

Plans and Status for The Clayton Project

Although the Clayton property was a producing mine until 1986 as outlined above, the Company classifies the property as an early-stage project as the Company has not completed any programs to assess the resource potential.

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The Company has developed plans to assess the underground resource potential as well as to investigate the economic potential of the above ground mine dump. The Company has not commenced any programs since the completion of the sampling and analysis program on the mine dump in the 2014/2015 and has not incurred any material expenditures on the Clayton property since that time.

The Company will commence programs over the next several years to assess the resource potential within the structures related to the previously mined sections and to expand the search to determine the potential for other mineralized zones in adjacent structures. This will entail detailed geophysical work and multiple drill programs. CMX has concluded that very little geophysics was done on the property historically.

The Company plans to commence the first program, during the fourth quarter of 2021 with geophysical work to pinpoint drill locations for immediate follow-up drilling within the known mineralized systems identified and referred to as the South and North Ore Bodies in the old mine workings.

Management also plans a more detailed sampling program commencing to assess the economic potential of the Mine Dump. The program will include drilling in a grid pattern over the mine dump to recover multiple samples from each location. The Mine Dump is estimated to contain greater than 500,000 tonnes of metal-bearing material readily available for immediate processing. Upon completion of the detailed sampling and conditional on satisfactory results, CMX intends to proceed with a preliminary economic assessment (PEA) specifically for the mine dump.

The Company requires substantial funding to complete the programs on the Clayton property and has put together plans for the initial funding of the project, although as outlined above, Covid-19 has caused substantial delays in CMX's funding process. The Company is working on plans to obtain the necessary funding with the goal of closing the funding in the latter part of the fourth quarter of 2021 or early in 2022.

Outlined in the LIQUIDITY AND CAPITAL RESOURCES section below are the expected cash flow requirements for the upcoming 12-month period.

Phase 1 Work Programs for the 12-month period once funding is received:

Site preparation and clean up	$	75,000
Underground Resources Potential
Geophysics		60,000
Drilling - approximately 4,000 feet		800,000
Geochemical Assays		80,000
Total Underground Resources Potential		1,015,000
Mine Dump
Drilling - approximately 2,500 feet		470,000
Geochemical Assays		12,500
Total Mine Dump		485,000
Total program cost	$	1,500,000

SUMMARY OF QUARTERLY RESULTS

	2021				2020			2019
	Q3	Q2	Q1	Q4	Q3	Q2	Q1	Q4
Loss before
financing costs	$80,050	$66,437	$44,684	$52,326	$19,607	$19,554	$35,336	$96,769
Loss before
financing costs on a
per share basis	0.002	0.002	0.001	0.001	0.001	0.001	0.001	0.004
Net loss	$97,728	$87,670	$64,630	$78,292	$38,162	$39,097	$53,331	$100,328
Net loss on a
per share basis	0.002	0.003	0.002	0.002	0.001	0.001	0.002	0.004

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LIQUIDITY AND CAPITAL RESOURCES

The net loss from operations for the nine months ended September 30, 2021, was funded through the issuance of shares and debt. As of September 30, 2021, the Company had a net working capital deficiency of $1,408,861 (2020 - $1,431,716). As disclosed in the 2021 OVERVIEW, the Company completed private placements for cash as well as in settlement of debt. This has the effect on a pro forma basis of reducing the working capital deficiency as at September 30, 2021, to $41,736 (see "PRO FORMA STATEMENT"). Future operations will be funded by the issuance of capital stock. The Company is seeing an increase in interest in the junior mining sector as commodity prices continue to improve. As outlined above, CMX is working on plans to raise sufficient funds to carry out the planned programs on Clayton (see "EXPLORATION AND EVALUATION ASSETS").

Estimated Cash Flow Requirements for the Next 12 Months
Sampling, drilling, exploration and site preparation work on the
Clayton property (funding dependent)	$	1,500,000
General and administrative			335,000
Total estimated cash requirements	$	1,835,000

The total exploration program expenditures are contingent on CMX being able to raise sufficient equity capital in the future.

GOING CONCERN RISK

The Company has no source of operating cash flow and operations to date have been funded primarily from the issue of share capital. The Company's ability to continue as a going concern is contingent on obtaining additional financing. Whether the Company will be successful with any future financing ventures is uncertain, and this uncertainty casts significant doubt upon the Company's ability to continue as a going concern. While the Company intends to advance its plans through additional equity financing, there is no assurance that any funds will ultimately be available for operations.

RISKS AND UNCERTANTIES

Exploration and Development Risks

It is indeterminable if exploration properties will result in profitable commercial mining operations. Mine development projects such as the Clayton Property require significant expenditures during the exploration and development phase before production is possible. Exploration and development projects are subject to the completion of successful drilling and assay results, feasibility studies and environmental assessments, issuance of necessary governmental permits and availability of adequate financing. The economic feasibility of development projects is based on many factors, including estimation of mineral reserves, anticipated metallurgical recoveries, environmental considerations and permitting, future metal prices, and anticipated capital and operating costs. Although the Clayton property has past operating history the data is limited upon which to base estimates of future production and cash operating costs. Particularly for development projects, estimates of proven and probable mineral reserves and cash operating costs are, to a large extent, based upon the interpretation of geologic data obtained from drill holes and other sampling techniques, and feasibility studies that derive estimates of cash operating costs based upon anticipated tonnage and grades of ore to be mined and processed, the configuration of the ore body, expected recovery rates of metals from the ore, estimated operating costs and other factors. As a result, it is possible that actual capital and operating costs and economic returns will differ significantly from those currently estimated for a project prior to production. Any of the following events, among others, could affect the profitability or economic feasibility of a project. Unanticipated changes in grade and tons of ore to be mined and processed, unanticipated adverse geological conditions, unanticipated metallurgical recovery problems, incorrect data on which engineering assumptions are made, availability and costs of labor, costs of processing and refining facilities, availability of economic sources of power, adequacy of water supply, availability of surface on which to locate processing and refining facilities, adequate access to the site, unanticipated transportation costs, government regulations (including regulations with respect to prices, royalties, duties, taxes, permitting, restrictions on production, quotas on exportation of minerals, environmental), fluctuations in metals prices, foreign exchange rates, accidents, labor actions and force-majeure events. It is not unusual in new mining operations to experience unexpected problems during the start-up phase, and delays can often occur at the start of production.

Title risk

The Company holds patented claims as well as claims on Bureau of Land Management (BLM) lands in Idaho. The company makes a search of mining records in accordance with mining industry practices to confirm satisfactory title to properties in which it holds or intends to acquire an interest. CMX has obtained title insurance on the Clayton patented claims, but coverage is limited to the purchase price of U.S. $500,000. Although the Company maintains its patented claims by ensuring timely payment of its property taxes and payment of annual fees on its BLM claims, the possibility exists that title to one or more of