DFR Gold : December 31, 2022 – Annual Report (MDA)

Management's Discussion and Analysis of Financial Condition and Results of Operations

For the year ended December 31, 2022 Date of release April 28, 2023

(All amounts are expressed in United States dollars unless otherwise stated)

DFR GOLD INC. (formerly Diamond Fields Resources Inc,) Management's Discussion and Analysis

For the year ended December 31, 2022

(All amounts are expressed in U.S. dollars except where otherwise indicated)

1. INTRODUCTION

This Management Discussion and Analysis (''MD&A") for the year ended December 31, 2022 has been prepared as at April 28, 2023, and contains certain "forward-looking statements" under the Canadian securities laws. All statements, other than statements of historical fact included herein, including without limitation statements regarding potential mineralization, exploration results, plans and objectives of DFR Gold Inc. ("DFR Gold", "DFR" or "the Company" or together with its subsidiaries, "the Group"), are forward-looking statements that involve various risks, uncertainties and assumptions. The MD&A should be read in conjunction with the consolidated financial statements of DFR.

The Company changed its name from Diamond Fields Resources Inc. to DFR Gold Inc. effective January 30, 2023, and is referred to as DFR Gold Inc. throughout this report.

1. Geopolitical and political situation

The geopolitical situation in Eastern Europe intensified on February 24, 2022, with Russia's invasion of Ukraine. In addition to the human toll, the war is increasingly affecting economic and global financial markets and exacerbating ongoing economic challenges, including issues such as rising inflation and global supply-chain disruption. Additionally, the Countries where the Company conducts exploration in West Africa continue to experience civil unrest and/or warfare including civilians attacks.

Though the Company's activities have so far not been significantly affected by the situation in eastern Europe and in Burkina Faso, management believes that the nature and duration of uncertain and unpredictable events, such as attacks on civilians and further military action in Burkina Faso, additional sanctions on Russia and reactions to ongoing developments by global financial markets may have implications on the Company's activities.

The Company is continuously evaluating its direct and indirect exposures to the impacts of the local and regional events as well as consequences of the Russia-Ukraine conflict on its operation. Although the Company does not have direct exposure to Ukraine or Russia, it is likely to be affected by the overall economic uncertainty and any impact on the global economy and major financial markets arising from the war.

1. Material events following the end of the reporting period

Effective January 30, 2023, Diamond Fields Resources Inc. has changed its name to DFR Gold Inc.

On April 6, 2023, DFR announced a private placement of unsecured convertible debentures (the "Debentures"), with insiders and management, for gross total proceeds in an aggregate amount of US$1,705,750. The Debentures will mature on February 29, 2024 (the "Maturity date") unless converted earlier in accordance with their terms. The Debentures bear interest at a rate of 12.5% per annum, which is payable on the Maturity Date, unless the Debentures are converted earlier.

1. Management's responsibility for financial reporting

The consolidated financial statements have been prepared by management who, when necessary, have made informed judgements and estimates of the outcome of events and transactions, with due consideration given to materiality. Management acknowledges its responsibility for the fairness, integrity and objectivity of all information in the consolidated financial statements.

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DFR GOLD INC. (formerly Diamond Fields Resources Inc,) Management's Discussion and Analysis

For the year ended December 31, 2022

(All amounts are expressed in U.S. dollars except where otherwise indicated)

1. INTRODUCTION (CONTINUED)

1. Management's responsibility for financial reporting (continued)

As a means of executing its responsibility, management relies on the Company's system of internal control. This system has been established to ensure, within reasonable limits, that the assets are safeguarded, transactions are properly recorded and are executed in accordance with management's authorization. In addition, the system ensures that the accounting records provide a solid foundation from which to prepare the consolidated financial statements.

The Board of directors carries out its responsibility for the condensed consolidated financial statements principally through its Audit Committee, consisting solely of non-management directors. This committee makes its recommendations to the Board of directors. Based on those recommendations, the Board of directors approves the condensed consolidated financial statements.

2. OVERVIEW

1. Description of business

DFR Gold Inc., formerly Diamond Fields Resources Inc., announced changing its name to DFR Gold Inc. effective January 30, 2023. DFR is a British Columbia governed company listed on the TSX Venture Exchange. On June 28, 2022, the Company completed the previously announced acquisition and restructuring of Moydow Holdings Limited ("Moydow"), a BVI company owning a portfolio of gold assets in West Africa, which received final TSXV approval on July 11, 2022 (see DFR announcements dated August 25, 2021, June 29, 2022, and July 11, 2022). The Company is active in mineral exploration and has business interest in Burkina Faso, Mali, Nigeria and Madagascar. The Company has sold its Namibian diamond assets to Jean Boulle Diamond Mines Ltd. pursuant to a diamond business sale agreement dated November 28, 2022, as such, the Group's results include the results of Diamond Fields (Namibia) (Pty) Ltd. and Namibian Diamond Company (Pty) Ltd. up to November 28, 2022. The operating results of DFR's newly acquired gold projects are reported as part of the Company's income statement as from June 29, 2022. The Company is actively engaged in the development of its existing assets whilst continuing assessing additional mineral projects around the world to identify new opportunities.

The Company's trading symbol on the TSX Venture Exchange is DFR.

1. Principal Assets

Mr. David J. Reading, M.Sc., FIMM, Fellow of the Society of Economic Geologists (SEG), a director to the Company and a Qualified Person as defined under Canadian National Instrument 43 101 - Standards of Disclosure for Mineral Projects ("NI 43 101"), has reviewed and approved the technical information contained in this report.

Cascades (Gold) - Burkina Faso.

The Company's recently acquired 80% controlled subsidiary, Moydow, holds two exclusive options for the WUO Land WUO Land 1 and WUO Land 2, until year 2024, to purchase 100% of the license holder's interest in the WUO Land 1 and WUO Land 2 ("Cascades") exploration licenses covering 304 km2 of ground in the Banfora greenstone belt in southwest Burkina Faso. The license area contains a mineralised corridor 30km long and 5km wide containing a number of auriferous quartz shears.

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DFR GOLD INC. (formerly Diamond Fields Resources Inc,) Management's Discussion and Analysis

For the year ended December 31, 2022

(All amounts are expressed in U.S. dollars except where otherwise indicated)

2. OVERVIEW (CONTINUED)

1. Principal Assets (continued)

Data for over 65,000 meters of historical drilling has been acquired by the Company from previous option holders. The Company's subsidiary undertook a confirmatory twin and infill drilling campaign,

consisting of 4,739 meters reverse circulation (RC) drilling in 2021, following which a maiden resource statement was published. DFR completed 4,975 meters of RC drilling program in August 2022, started by Moydow prior to its acquisition by DFR. The results, including the discovery of a new gold zone, were announced by the Company (see DFR announcement dated on September 6, 2022).

Taking into account the historic drilling data, drilling performed by Moydow in 2021 and the 2022 drilling campaign, the aggregate drilling on the property as at the date of reporting has reached almost 75,000 meters. A NI 43-101 compliant technical report announced by the Company on October 25, 2021, and amended on April 20, 2022 reported:

• Indicated resource of 5.41 million tonnes at an average grade of 1.52 g/t AU for a total 264,000 ounces of gold; and,
• Inferred resource of 6.93 million tonnes at an average grade of 1.67 g/t Au for a total of 371,000 ounces of gold.

The Company started an initial 5,000 meters phase of drilling at Cascades during the first quarter of 2023, at the time of issuing this MD&A the drill samples were being assayed and results were being analysed.

Kalaka (Gold) - Mali.

The Company acquired, on June 28, 2022, a 40% indirect interest in the Kalaka license in Mali (as part of the Moydow transaction). The Kalaka gold project is located 260km south east of Bamako in South Mali, 80km south of the 8 million Ounces Morila gold mine owned by Barrick/AngloGold Ashanti and 85km northwest of the 6 million ounces Syama gold mine owned by Resolute. Previous works at Kalaka indicate a large, low-grade zone mineralization with multiple drill intersections.

Nigeria (Gold).

The Company acquired, on June 28, 2022, a 25.5% indirect interest in various gold exploration projects in Nigeria (as part of the Moydow transaction), where historically very little systematic, modern exploration has been undertaken. The projects are located within the gold-bearing ("Schist Belt") terrain of the Benin-Nigeria Shield, which has broad similarities to the Birimian of the Man Shield of West Africa.

Beravina (Zircon)

The Company through its Madagascar-based subsidiary, Compagnie Générale des Mines de Madagascar, owns a Mining License (Permis d'Exploitation PE 8096) for the exploration and mining of the Beravina deposit, valid until June 22, 2055. The project is located in Western Madagascar within the Melaky region, covering 625 hectares and is approximately 220km east of the port of Maintirano, near a state road. A NI 43-101 compliant technical report filed by the Company on January 29, 2019, reported an Inferred Mineral Resource Estimate of 1.5 million tonnes grading 22.7% Zircon (ZrSiO4) (equivalent to 15.3% ZrO2).

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DFR GOLD INC. (formerly Diamond Fields Resources Inc,) Management's Discussion and Analysis

For the year ended December 31, 2022

(All amounts are expressed in U.S. dollars except where otherwise indicated)

2. OVERVIEW (CONTINUED)

1. Principal Assets (Continued)

Namibia (Diamonds)

The Company disposed of its interest in previously 100% owned Diamond Fields (Namibia) (Pty) Ltd. and Namibian Diamond Company (Pty) Ltd. (the "Namibian Assets") on November 28, 2022 (the "Disposal date"), as such the consolidated results of the Group include those of the Namibian Assets until Disposal Date.

1. Highlights

Corporate activities

The acquisition and restructuring of Moydow was completed on June 28, 2022, and on July 11, 2022, the TSX Venture exchange (TSX-V) granted its final approval to the transaction, following which DFR's common shares, which had been halted since announcing the Moydow transaction on August 25, 2021, resumed trading on July 13, 2022. Pursuant to the Moydow transaction an aggregate of 98,677,892 common shares were issued as follows on closing: 71,880,320 shares (at a deemed price of C$0.185 per share) in exchange for Moydow securities; 6,160,072 shares subscribed at $0.217 per share as part of the founders' agreement, initially announced on August 25, 2021; and, 20,637,500 shares subscribed at C$ 0.20 per share (for cash and in exchange for services) as part of the financing initially announced on March 11, 2022.

Following completion of the acquisition of Moydow, three directors stood down, and three new directors, namely Brian Kiernan, Len Comerford and Carlo Baravalle, were appointed to the Board. On January 1, 2022, John McGloin was appointed as a Director, CEO and President of the Company. The new Board consists of the following directors: Brian Kiernan (Chairman); John McGloin (CEO and President); Sybrand Van Der Spuy (COO); Al Gourley; David Reading; Bertrand Boulle; Carlo Baravalle; and Len Comerford. Jean Lindberg Charles continues to serve as CFO and Secretary.

The Company issued 3,430,631 shares at a price of C$0.145 per share to option holders following the exercise of options by the latter in March and July 2022. Moreover, 1,119,369 options with a strike price of C$0.145 have expired unexercised during the year. The Company increased its fixed, less than 10% Stock Plan to 17,800,000 Stock Options and issued 16,150,000 new stock options, with an exercise price of C$0.20 each to directors and officers of the company as announced on September 22, 2022, and granted further 900,000 stock options with an exercise price of C$0.20 per share to directors and management in December 2022. Following the date of reporting, further 400,000 stock options with an exercise price of C$0.145 have expired.

Overall operation updates and performance

The Group posted a net loss of $16,738,746 (2021: $554,462) for year ended December 31, 2022. The

net loss consists principally of: mineral asset arising on the acquisition (and first time consolidation) of Moydow to an extent of $14,562,694 expensed in line with the Company's accounting policy pursuant to which, acquisition, exploration and evaluation asset expenditures incurred prior to the date of a positive economic assessment on the property are expensed as incurred; An amount of $142,389 has been recognized as gain on disposal of the company's previously held Namibian subsidiaries; exploration and evaluation expenses amounting to $587,518; share-based compensation arising on the issuance of Stock Options to an extent of $284,038; and, general and admin expenses to an extent of $1,434,682.

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