Gold State Resources : MD&A of Year Ended March 31, 2022

GOLD STATE RESOURCES INC. (FORMERLY

CYON EXPLORATION LTD.)

Management's Discussion & Analysis

For the Year Ended

March 31, 2022

(the "Year")

GOLD STATE RESOURCES INC. - Management's Discussion & Analysis - March 31, 2022

Cautionary Notices

The Company's unaudited financial statements for the Year, and this accompanying management's discussion and analysis ("MD&A") contain statements that constitute "forward-looking statements" within the meaning of National Instrument 51-102 - Continuous Disclosure Obligations of the Canadian Securities Administrators. Forward-looking statements often, but not always, are identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect", "targeting" and "intend" and statements that an event or result "may", "will", "should", "could", or "might" occur or be achieved and other similar expressions. Forward-looking statements in this MD&A include statements regarding the Company's future exploration plans and expenditures, the satisfaction of rights and performance of obligations under agreements to which the Company is a part, the ability of the Company to hire and retain employees and consultants and estimated administrative assessment and other expenses. The forward-looking statements that are contained in this MD&A involve a number of risks and uncertainties. As a consequence, actual results might differ materially from results forecast or suggested in these forward-looking statements. Some of these risks and uncertainties are identified under the heading "Risks Related to the Company's Business" in this MD&A. Additional information regarding these factors and other important factors that could cause results to differ materially may be referred to as part of particular forward-looking statements. The forward-looking statements are qualified in their entirety by reference to the important factors discussed under the heading "Risks Related to the Company's Business" and to those that may be discussed as part of particular forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause the actual results to differ include market prices, exploration success, continued availability of capital and financing, inability to obtain required regulatory approvals and general market conditions. These statements are based on a number of assumptions, including assumptions regarding general market conditions, the timing and receipt of regulatory approvals, the ability of the Company and other relevant parties to satisfy regulatory requirements, the availability of financing for proposed transactions and programs on reasonable terms and the ability of third-party service providers to deliver services in a timely manner. Forward-looking statements contained herein are made as of the date of this MD&A and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Introduction

The management's discussion and analysis ("MD&A" or "Report") of Gold State Resources Inc. (the "Company" or "Gold State") has been prepared by management in accordance with the requirements under National Instrument 51-102 - Continuous Disclosure Obligations as at July 28, 2022 (the "Report Date"), and provides comparative analysis of the Company's financial results for the Year. The following information should be read in conjunction with the Company's audited consolidated financial statements for the year ended March 31, 2022 (collectively, the "Financial Statements"). Unless otherwise indicated, all dollar amounts in this document are in Canadian dollars.

The Financial Statements, together with this MD&A, are intended to provide investors with a reasonable basis for assessing the financial performance of the Company as well as potential future performance, and are not necessarily indicative of the results that may be expected in future periods. The information in the MD&A may contain forward-looking statements, and the Company cautions investors that any forward looking statements by the Company are not guarantees of future performance, as they are subject to significant risks and uncertainties that may cause projected results or events to differ materially from actual results or events. Please refer to the risks and cautionary notices of this MD&A. Additional information relating to the Company may be found at www.sedar.com.

Management is responsible for the preparation and integrity of the financial statements, including the maintenance of appropriate information systems, procedures and internal controls to ensure that information used internally or disclosed externally, including the financial statements and MD&A, is complete and reliable.

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company's business or ability to raise funds.

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GOLD STATE RESOURCES INC. - Management's Discussion & Analysis - March 31, 2022

Description of Business, Overall Performance, and Projects

The Company is a mineral exploration company engaged in the acquisition, exploration and development of mineral properties in North America, primarily in Nevada, USA. The Company is a reporting issuer in British Columbia and Alberta, and trades on the TSX Venture Exchange under the symbol GOST.

On September 21, 2020, the Company consolidated its share capital on a six to one basis. These condensed interim consolidated financial statements reflect the share consolidation.

At any given time, the Company may have a number of projects at various stages of exploration and partnership or joint venture participation. The discussion below provides summary information in respect of the Company's mineral properties and the activity thereon. Refer to the Company's news releases filed on www.sedar.com, for additional exploration updates. The commitments in respect of consideration to be paid or received on acquisition or disposition of the Company's properties, respectively, are detailed in the Company's Financial Statements.

Panteria Property

During the year ended March 31, 2022, the Company entered into a binding letter of intent ("LOI") with Peruvian Metals Corp. to acquire a 100% interest in the Panteria copper-gold porphyry project and the Reynoldo project (the "Projects"). The projects are located approximately 210 kilometres southeast of Lima, Peru, in the Huancavelica department in the Castrovirrcyna Province.

Subsequent to the year ended March 31, 2022, the Company has closed the acquisition (the "Acquisition") of the mineral claims comprising the Panteria copper-gold porphyry project (the "Project") from Peruvian Metals Corp. ("Peruvian"). The Project is located approximately 210 kilometres southeast of Lima, Peru, in the Huancavelica department, and is considered highly prospective for both copper-gold("Cu-Au")porphyry-style mineralization and high-levelgold-silver(Au-Ag) epithermal mineralization.

The Project is composed of several mineral concessions covering an area of 2,700 hectares and is believed to be situated in the northern extension of the Southern Coastal porphyry belt. Peruvian acquired the project in 2010 and conducted extensive surface sampling and mapping programs followed by a small geophysical program in 2014. Peruvian recognized the porphyry potential of the area, and through fieldwork, identified the high-level Renaldo Au-Ag zone 4.5 kilometres east of the main Panteria zone. First Quantum Minerals Ltd. ("First Quantum") optioned the project from Peruvian and explored the area from 2016 to 2018. A total of 8,699 metres were drilled on the Project by First Quantum in 11 holes. Five main mineralized zones were identified on the Project by Peruvian and First Quantum; the Kisosko, El Corral, NW Corral, La Quebrada and Renaldo zones. To date the El Corral and NW Corral zones have proven the most prospective for Cu-Au porphyry mineralization while the Renaldo and Kiosko zones are considered high-levelAu-Ag precious metal targets and have not been drill tested.

The drilling by First Quantum mainly focused on the El Corral and La Quebrada zones. Porphyry-style mineralization and alteration, defined by the drilling, have a minimum 1,300-metre horizontal extent and an over 700-metre vertical extent in the subsurface. The large horizontal and vertical extent of the porphyry-style mineralization and alteration indicates a large hydrothermal system is present, typical of porphyry systems.

Black Rock Canyon Property

During the year ended March 31, 2022, the Company acquired all of the issued and outstanding shares of 1296067 B.C. Ltd. ("1296") in consideration of 12,000,000 common shares (issued and valued at $2,700,000 to 1296's shareholders. 1296 is the owner of certain mineral claims and interests in leases known as the Black Rock Canyon property.

The Company acquired additional claims during the year ended March 31, 2021 to expand the Black Rock Canyon property by acquiring all the issued and outstanding shares of 1266443 B.C. ("1266") Ltd. in consideration of 6,000,000 common shares to 1266's shareholders and cash payment of $100,000.

In March 2021, the Company drilled three pre-collar reverse circulation drill holes on the Black Rock Canyon property in advance of a proposed deep drilling campaign. Information about this drill program is detailed in the Company's news releases dated March 5, 10, and 18, 2021.

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GOLD STATE RESOURCES INC. - Management's Discussion & Analysis - March 31, 2022

Aspen Gold Property

During the year ended March 31, 2021, the Company acquired 100% interest in the Aspen Gold Property in British Columbia by acquiring all the issued and outstanding shares of Big Rock Resources Inc. ("Big Rock") in consideration of 6,000,000 common shares (issued and valued at $1,800,000) to Big Rock's shareholders and cash payment of $200,000. Big Rock is the beneficial owner of five mineral claims totaling over 3,000 hectares located 25 kilometres northeast of Artemis Gold Inc.'s (TSX‐V: ARTG) 10+ million ounce Blackwater Gold project and in close proximity to Tower Resources Ltd.'s (TSX‐V: TWR) Nechako Gold project in northern British Columbia.

Jumping Jack Property

During the year ended March 31, 2022, the Company acquired all the issued and outstanding common shares of 1309871 B.C. Ltd. ("1309871 BC" and formerly Gold State Resources Inc.) 1309871 BC, through its subsidiary, Jumping Jack Exploration Inc., is a party to an option agreement for the acquisition in certain mineral claims known as the Jumping Jack property ("Jumping Jack"). Jumping Jack is located in the Moors Creek mining district of Nye County, Nevada, approximately 55 miles north of Tonopah. It is situated along the eastern margin of the Walker Lane Gold Trend, ten miles north of Kinross Gold Corporation's well-known Round Mountain Gold Mine, and is five miles north of the nearest Round Mountain open pit. Jumping Jack is ten miles south of the Northumberland Gold Mine, active in the 1980s and 1990s. The United States Geological Survey Mineral Resource Data System has reported the total metal content of the Round Mountain gold system to be approximately 20 million ounces of gold.

The project history for the property dates back to about 1905, when it was reported that the then rancher/owner supported his family and ranch by underground gold mining for three years, constructing several adits and shafts totaling about 100 metres (305 feet) of underground workings. In the past, the ranchers/owners had not been favorable to corporate exploration programs except for three limited exploration programs, the last time being in the 1980s. Surface exploration during 2020 identified three parallel N15-20W silicified fault zones which include the original hundred-year-old mine workings. This strike orientation parallels major gold belts in Nevada including the Carlin Trend, the Cortez Gold Belt and the Walker Lane Trend. The silicified fault zones occur approximately 640 metres (2,100 feet) apart from each other spanning more than 1 km in width. The East zone is the site of the historical mining and is exposed for 610 metres (2,000 feet) along strike. The Middle zone can be traced over a strike length of 305 metres (1,000 feet), and the West zone is covered except for one pit exposing the fault zone over 3 metres (10 feet).

Selected Annual Information

	March 31, 2022	March 31, 2021	March 31, 2020
	$	$	$
Net loss and comprehensive loss for	(4,182,210)	(7,197,258)	(237,772)
the year
Basic and diluted loss per share	(0.05)	(0.15)	(0.01)
Total assets	77,619	644,820	75,083
Long-term financial liabilities	-	-	-

Summary of Quarterly Results

The following are selected financial data from the Company's eight most recently completed quarters.

	March 31,	December 31,	September 30,
	2022		2021		2021	June 30, 2021
Financial results
Net loss	$ (3,044,191)	$	(221,477)	$	(169,804)	$	(746,738)
Basic and diluted loss per share	(0.04)		(0.00)		(0.00)		(0.01)
Balance sheet data
Cash	3,983		6,501		73,614		131,840
Exploration and evaluation assets	-		9,193,128		7,594,728		4,828,204
Reclamation deposit	22,474		22,474		22,474		22,474
Total assets	77,619		9,280,964		7,846,127		5,473,024
Current liabilities	670,260		632,150		300,836		457,929
Shareholders' equity (deficiency)	(592,641)		8,648,814		7,545,291		5,015,095

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GOLD STATE RESOURCES INC. - Management's Discussion & Analysis - March 31, 2022

	March 31, 2021	December 31,	September 30,
	(restated)	2020		2020	June 30, 2020
Financial results
Net loss	$ (5,574,942)	$ (1,312,014)	$	(193,512)	$	(116,790)
Basic and diluted loss per share	(0.21)	(0.03)		(0.00)		(0.00)
Balance sheet data
Cash	131,840	29,737		49,444		9,085
Exploration and evaluation assets	-	-		-		-
Reclamation deposit	22,474	-
Total assets	644,820	4,902,021		1,920,529		84,107
Current liabilities	457,929	287,200		361,394		1,120,679
Shareholders' equity (deficiency)	186,891	4,902,021		1,559,132		(1,036,572)

During the quarters ended March 31, 2022 and March 31, 2021, the significant net losses of $3,114,180 and $5,574,942 respectively were due to an accounting policy change whereby costs directly related to exploration and evaluation expenditures in addition to acquisition costs, net of recoveries on a property-by-property basis are expensed in the year they occur. This change was applied on a retrospective basis.

During the quarter ended December 31, 2020, the significant net loss of $1,312,014 was due to the grant of stock options which resulted in a share-based compensation expense of $857,800.

Results of Operations

The Company has no revenue from its mineral interests, and losses are mainly costs associated with administration of the Company. Losses are reduced from time to time by any gain on disposition of a property, which could include marketable securities received as payment.

For the Year ended March 31, 2022

The Company incurred comprehensive loss of $4,252,199 for the year ended March 31, 2022, compared with comprehensive loss of $7,197,258 for the year ended March 31, 2021.

A brief explanation of the significant changes in expenses by category is provided below:

• Accounting and audit decreased to $87,462 (2021 - $100,262) due to decrease in business activities during the current year.
• Consulting decreased to $38,896 (2021 - $165,720) due to changes in management since the previous year.
• Exploration and evaluation decreased to $3,642,892 (2021 - $4,828,204) due to higher drilling activity and several acquisitions in the previous year.
• Legal decreased to $23,262 (2021 - $132,125) due to significant business activities during the previous year.
• Regulatory decreased to $35,761 (2021 - $77,339) due to significant business activities during the previous year.
• Shareholder communication decreased to $Nil (2021 - $95,955) due to significant business activities during the previous year.

Liquidity and Financial Condition

The Financial Statements are prepared on a 'going concern' basis, which contemplates that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business. The Company's ability to continue as a going concern is dependent on its ability to raise additional funds or the attainment of profitable operations. The Company will need to raise or borrow money for exploration and administration expenditures, and to settle current liabilities, and to ensure it maintains sufficient funds to keep its claims and property agreements in good standing. Current sources of funding are undetermined, and management continues to review potential financing options. Although the Company has been successful at raising funds in the past through the issuance of share capital and entering into loan agreements, there is no guarantee it will be successful or able to continue to do so in the future.

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