DFR Gold : March 31, 2023 – Q1 2023 Report (MDA)

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

For the three-months period ended March 31, 2023 Date of release May 30, 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 three-months ended March 31, 2023

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

1. INTRODUCTION

This Management Discussion and Analysis (''MD&A") for the three-months period ended March 31, 2023 has been prepared as at May 30, 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 condensed 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

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.

On May 25 2023, DFR announced the completion of the first phase of a 10,000 metre drilling program (the "Drilling Program") consisting of 5,641 metres of reverse circulating drilling on the Cascades Project in Burkina Faso, West Africa, started during the first quarter of 2023. The Drilling Program confirmed significant new zones with result potential, further information will be released after the Company completes Bottle Roll (Leach WELL) analysis which were in progress at the date of issuing this report.

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

For the three-months ended March 31, 2023

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

1. INTRODUCTION (CONTINUED)

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

The condensed consolidated interim 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.

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 acquisition and restructuring of Moydow Holdings Limited ("Moydow"), a BVI company owning a portfolio of gold assets in West Africa. Moreover, DFR sold its Namibian diamond assets on November 28, 2022, as such, the Group started reporting the results of Moydow as from June 28, 2022 and reporting the 2022 comparatives for Namibia as discontinued operations. 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

Approval of disclosure of technical information

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 (2022) 80% controlled subsidiary, Moydow, holds two exclusive options for the Cascades project, until year 2024, to purchase 100% of the license holder's interest in the WUO Land 1 and WUO Land 2 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 three-months ended March 31, 2023

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

2. OVERVIEW (CONTINUED)

1. Principal Assets (continued) Cascades (Gold) - Burkina Faso (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 metres 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 consideration the historic drilling data, drilling performed by Moydow in 2021 and the 2022 drilling campaign, the aggregate drilling on the property as at the beginning of the reporting period has reached almost 75,000 metres. 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 announced the completion of 5,641 metres of reverse circulation drilling (being the first phase of a 10,000 metres drilling program) on the Cascades Project on May 25 2023.

Kalaka (Gold) - Mali.

The Company acquired, in June 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.

Gurara, Nigeria (Gold).

The Company acquired, in June 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 ("CGMM"), 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 three-months ended March 31, 2023

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

2. OVERVIEW (CONTINUED)

1. Highlights

Overall operation updates and performance

The Group posted a net loss of $1,309,102 (2022: $583,784) for the three-months period ended March

31, 2023. The net loss for the period ended consists principally of: exploration and evaluation

expenditures (arising mainly on Cascades Project) to an extent of $708,721 (2022: $127,301),

administrative expenses to an extent of $330,828 (2022: $444,818) and share based compensation to

an extent of $265,080 (2022: $nil).

3. RESULTS OF OPERATIONS

Review of selected financial and operating results Selected year ends financial and non-financial information

		Three-months ended
		March 31	March 31
		2023	2022
		$	$
Exploration and evaluation expenses*	(708,721)	(127,301)
General and administrative expenses*	(330,828)	(444,818)
Share based compensation	(265,080)	-
Interest income	4,304	-
Foreign exchange gain	14,688	713
Share of joint venture /Associate's	(23,465)	-
expenses	-
Loss from discontinued operation*	(12,378)
Net loss for the period	(1,309,102)	(583,784)
Exchange difference on translation of	(20,134)
foreign operations	(2,992)
Total comprehensive loss	(1,329,236)	(586,776)
Comprehensive Loss attributable to:	(1,178,433)
-	Equity shareholders	(574,398)
-	Non-controlling interest	(150,803)	(12,378)
Weighted average number of shares	181,670,852
outstanding	79,842,329
Loss per share - basic and diluted	(0.01)	(0.01)

• Expenses pertaining to the Namibian operations for the comparative period have been reclassified to discontinued operations.

Evaluation and Exploration expenditures (''E&E'')

E&E amounted to $708,766 (2021: $127,301) for the three-months ended March 31, 2023. E&E

expenditures incurred on Cascades amounted to $670,836 (2022: $nil (pre-acquisition)) for the three- months ended March 31, 2023, of which an amount of $512,335 is attributed to drilling and assaying expenses, and the balance for consultancy fees, support and logistics. E&E to an extent of $6,716 (2022: $6,443) have been incurred on the Beravina project for the three-months period ended March 31, 2023. Expenditures incurred in relation to the Namibian projects for the corresponding period last year have been disclosed separately under Discontinued Operations.

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