Magna Gold : MDA Q4 2021

MAGNA GOLD CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2021 AND NINE MONTHS ENDED DECEMBER 31, 2020

(EXPRESSED IN MILLIONS OF US DOLLARS, UNLESS OTHERWISE STATED)

Magna Gold Corp.

Management's Discussion and Analysis

Year Ended December 31, 2021 and Nine Months Ended December 31, 2020 Discussion dated: April 29, 2022

(In millions of US Dollars, unless otherwise stated)

INTRODUCTION

The following Management's Discussion and Analysis ("MD&A") for Magna Gold Corp. together with its subsidiaries ("Magna" or the

"Company") is prepared as of April 29, 2022, and relates to the financial condition and results of operations for the year ended December 31, 2021 and nine months ended December 31, 2020. Past performance may not be indicative of future performance. This MD&A should be read in conjunction with the audited consolidated financial statements ("consolidated financial statements") and related notes for the year ended December 31, 2021, and nine months ended December 31, 2020, which have been prepared using accounting policies consistent with International Financial Reporting Standards as issued by the International Accounting

Standards Board ("IFRS" or "GAAP").

As a result of the change in the Company's year-end from March 31 to December 31 during the previous fiscal year, the comparative period for the three months ended December 31, 2021 is the three months ended December 31, 2020, and the comparative period for the year ended December 31, 2021, is the nine months ended December 31, 2020.

The first, second, third and fourth quarters of the Company's fiscal years are referred to as "Q1", "Q2", "Q3" and "Q4", respectively.

The three months ended December 31, 2021, are also referred to as "Q4 2021". The year ended December 31, 2021, and the nine months ended December 31, 2020, are also referred to as "fiscal 2021" and "fiscal 2020", respectively.

All amounts are presented in United States dollars, the Company's presentation currency, unless otherwise stated. References to

"C$" and "MXN" are to Canadian dollars and Mexican pesos, respectively.

Statements are subject to the risks and uncertainties identified in the "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" sections of this document. The Company has included the non-GAAP performance measures of cash cost per gold ounce on a by-product basis and all-in sustaining cost per gold ounce on a by-product basis throughout this document. For further information and detailed calculations of these measures, see the "Non-GAAP Measures" section of this document.

Additional information relating to the Company, including the Annual Information Form filed by the Company, is available on SEDAR atwww.sedar.com.

ANNUAL OPERATIONAL OVERVIEW AND RECENT DEVELOPMENTS

San Francisco Mine Highlights

The San Francisco Mine completed planned pre-stripping activities during June 2021. Q3 2021 was the first quarter at full-scale and steady rate commercial production.

During the year ended December 31, 2021, the San Francisco Mine produced 56,099 ounces of gold, meeting its stated production guidance of 55,000 to 65,000 ounces.

Environmental, Social and Governance ("ESG")

The Company is committed to follow good ESG practices and continuously endeavours to operate in a sustainable and socially responsible manner. During fiscal 2021, the Company achieved the following:

• - Received the Enterprise Socially Responsible (ESR) award from the Mexican Center for Philanthropy for the ninth consecutive year. Subsequent to December 31, 2021, the Company received the ESR award for the tenth consecutive year.

• - No lost-time incident ("LTI") at the San Francisco Mine or at the Company's exploration sites. At December 31, 2021, the Company had achieved 4,614,861 man-hours worked without LTI at the San Francisco Mine.

• - 1,944 hours of training were provided to the employees of the San Francisco Mine.

• - Compliance with all environmental requirements set up by governmental authorities. All environmental permits were successfully renewed.

• - Involvement in activities and programs benefiting the local community, such as providing school supplies, supporting access to essential health services, maintaining roads, and tree planting, amongst others.

• - Provision of transportation to COVID-19 vaccination centers for employees of the mine and logistical support for the nearby vaccination center.

• - A number of governance policies were approved by the Board of Directors and implemented, such as disclosure, anti-corruption, whistleblower, diversity and securities trading policies. A code of business ethics was also adopted.

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Magna Gold Corp.

Management's Discussion and Analysis

Year Ended December 31, 2021 and Nine Months Ended December 31, 2020 Discussion dated: April 29, 2022

(In millions of US Dollars, unless otherwise stated)

Corporate Activities

Appointment of CFO

On January 27, 2021, the Company appointed Mr. Colin Sutherland, CPA, CA, as Chief Financial Officer. Mr. Sutherland continues to be a director of the Company.

Auramet agreement and extensions

During February 2021, the Company, through its subsidiary Molimentales del Noroeste, S.A. de C.V. ("Molimentales"), signed an agreement with Auramet International LLC ("Auramet") pursuant to which the Company received $4.0 million in exchange for nine equal payments of 270 gold ounces to be delivered to Auramet starting May 31, 2021, and ending on January 31, 2022 (the "Auramet

Agreement"). Auramet has been Molimentales' primary purchaser of gold doré bars since 2010 and continues to be so after the acquisition of Molimentales by the Company.

On February 12, 2021, the Company received $4.0 million less transaction costs and upfront fee of 1%.

During September 2021, Molimentales and Auramet signed an agreement extension pursuant to which the Company would receive an additional $2.0 million in exchange for four equal payments of 307 gold ounces to be delivered to Auramet starting on February 28, 2022, and ending on May 31, 2022 (the "Auramet 2021 Extension").

On September 24, 2021, the Company received $2.0 million less transaction costs and upfront fee of 1%.

Subsequent to December 31, 2021, Molimentales and Auramet signed another agreement extension pursuant to which the Company would receive an additional $2.0 million, increasing the overall funds received from the Auramet 2021 Extension to $4.0 million in exchange for six equal payments of 431 gold ounces to be delivered to Auramet starting on July 29, 2022, and ending December 29, 2022 (the "Auramet 2022 Extension"). The Auramet 2022 Extension supersedes the prior Auramet 2021 Extension both in delivery of gold ounces and delivery dates.

On March 1, 2022, the Company received $2.0 million less transaction costs and upfront fee of 1%.

In relation to the Auramet 2022 Extension, the Company issued 1,500,000 non-transferable warrants to Auramet with each warrant being exercisable for one common share at C$0.78 per common share until March 18, 2023.

Under the agreement with Auramet, the Company must maintain a minimum consolidated cash balance of $1.0 million at all times during the duration of the agreement. Subsequent to December 31, 2021, the minimum consolidated cash balance increased to $1.5 million upon finalization of the Auramet 2022 Extension. The Company is required to maintain the minimum consolidated cash balance until all gold delivery obligations in relation to the Auramet 2022 Extension are fulfilled on December 29, 2022.

Argonaut promissory note

On May 6, 2021, Minera Magna S.A. de C.V. ("Minera Magna") had provided a promissory note to Timmins Goldcorp Mexico S.A. de C.V. ("Timmins"), a Mexican subsidiary of Argonaut Gold Inc. ("Argonaut"), for the working capital differential of $2.7 million in relation to the acquisition of the San Francisco Mine. The promissory note was to be paid in four monthly installments, plus interest, commencing July 6, 2021, and ending October 6, 2021. The promissory note carried uncompounded interest at a rate of 5% per annum.

During fiscal 2021, Minera Magna made all of the scheduled payments, thereby satisfying the promissory note obligations with Timmins.

Private placement of convertible debentures

On May 12, 2021, the Company entered into a non-brokered private placement of C$10.0 million secured convertible debentures

(the "Debentures") with Delbrook Capital Advisors Inc. ("Delbrook") on behalf of funds managed by Delbrook. The private placement closed on August 19, 2021, and the Company received C$10.0 million in exchange for 10,000 debentures. The Company paid Delbrook a 1.25% arrangement fee upon closing.

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Magna Gold Corp.

Management's Discussion and Analysis

Year Ended December 31, 2021 and Nine Months Ended December 31, 2020 Discussion dated: April 29, 2022

(In millions of US Dollars, unless otherwise stated)

The principal amount of the Debentures is convertible, at the election of Delbrook, into common shares of the Company at a conversion price of C$1.25 per common share, subject to adjustment in certain events. The interest on the Debentures is convertible, at the election of Delbrook, into either cash or common shares of the Company based on the closing price on the day prior to the issuance of a press release relating to the applicable interest payment date and will be paid in full, including in the event of early conversion.

The Debentures mature on August 19, 2023, twenty-four months from the closing date. The Debentures will initially be unsecured obligations of the Company and will bear interest at a rate of 8.5% per annum until the date that the security contemplated for the Debentures is delivered to Delbrook. Following such delivery, if applicable, the Debentures will bear interest at a rate of 6.5% per annum. As at the date of this MD&A, the interest rate remained at 8.5% per annum.

In connection with the private placement, the Company issued 600,000 common shares and 450,000 share purchase warrants to

Medalist Capital Ltd. in lieu of cash finder's fees. The share purchase warrants were issued with an exercise price of C$1.25 and an expiry date of August 19, 2024.

During September 2021, the private placement of the Debentures was given final TSX Venture Exchange ("TSXV") approval.

Stock option grants

On September 3, 2021, the Company granted options to certain officers and employees to purchase 1,000,000 common shares of the Company pursuant to the Company's stock option plan. The options are exercisable at C$0.90 per common share and expire on September 3, 2026. The options vested immediately.

On December 31, 2021, the Company granted options to certain directors, officers and employees to purchase 2,500,000 common shares of the Company pursuant to the Company's stock option plan. The options are exercisable at C$0.80 per common share and expire on December 31, 2026. The options vested immediately.

Preliminary short form base shelf prospectus

On April 21, 2021, the Company filed a preliminary short form base shelf prospectus in connection with the qualification for distribution, from time to time, of up to an aggregate offering price of C$100.0 million of the Company's securities. On July 20, 2021, the Company filed an amended and restated preliminary short form base shelf prospectus. On October 21, 2021, the Company filed a notice of withdrawal. The Company is currently evaluating potential financing activities, including the filing of a new base shelf prospectus.

Labour Reform in Mexico

On April 21, 2021, Mexican Congress approved a bill prohibiting outsourcing services in Mexico. Following the approval, a labour and tax reform (the "Reform") was later published in the Mexican Official Gazette. The Reform includes various changes to the

Federal Labour Law, including the elimination of labour subcontracting arrangements, also known as outsourcing. The effective date of the elimination of outsourcing was initially set on August 1, 2021, but then extended to September 1, 2021.

Prior to the Reform, the Company's Mexican personnel were outsourced. During July 2021, to comply with the Reform, the Company proceeded with transferring its Mexican outsourced personnel to direct employees of either Molimentales or Minera Magna. LM Mining Corp, S.A. de C.V. does not have direct employees or outsourced personnel.

The Company has reviewed the impact of the Reform and does not expect a material increase of its labour costs in Mexico. The prior employee compensation structure was already in compliance with the stated requirements of the Reform.

Accident at the San Francisco Mine

On February 16, 2022, the Company reported a fatal accident involving three employees at its San Francisco Mine that occurred on February 15, 2022. The Company provided all necessary support and assistance to the families and collaborated with the authorities during the investigation.

The crushing and laboratory areas were temporarily suspended for several days after an inspection by the State Civil Protection Coordination. The Company carried out improvement actions to comply with the observations issued by this authority. Activities in the restricted areas resumed on February 22, 2022, after a final inspection.

As of the date of this MD&A, all inspections and administrative procedures have been carried out and only the final report from the Mexican Ministry of Labor remains to be completed.

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Magna Gold Corp.

Management's Discussion and Analysis

Year Ended December 31, 2021 and Nine Months Ended December 31, 2020 Discussion dated: April 29, 2022

(In millions of US Dollars, unless otherwise stated)

Margarita exploration program

On March 8, 2022, the Company reported results from its resource definition drill campaign currently underway at its 100% owned Margarita silver project located in the state of Chihuahua, Mexico. Results were from the first 22 of 43 drill holes completed by the Company.

All drill holes intersected significant near surface silver mineralization over significant widths and the presence of multiple parallel mineralized veins was confirmed. The most significant result was for hole MAR-22-020, with a grade of 155.86 g/t Ag over 55.95 meters, including 12.80 meters with a grade of 498.0 g/t Ag. Please refer to the press release "Magna Gold Drills 12.80 metres at 498.08 g/t Silver within 55.95 metres at 155.86 g/t Silver starting 3 metres from Surface" dated March 8, 2022, and available on the Company's website atwww.magnagoldcorp.comand on SEDAR at www.sedar.com.

On April 21, 2022, the Company reported a maiden mineral resource estimate which will lead to the completion of a preliminary economic assessment ("PEA") shortly thereafter. Indicated mineral resources are estimated to be 1.854 million tonnes ("Mt") at 204.9

g/t Ag and inferred mineral resources of 0.454 Mt at 153.4 g/t Ag above a 75 g/t Ag cut-off grade. It corresponds to indicated resources of 12.22 million ounces ("Moz") of silver and inferred resources of 2.24 Moz of silver. Please refer to the press release "Magna Gold Announces Maiden Resource Estimate for the Margarita Silver Project" dated April 21, 2022, and available on the Company's website atwww.magnagoldcorp.comand on SEDAR at www.sedar.com.

OVERVIEW OF THE BUSINESS

Magna was incorporated on January 9, 2018, pursuant to the Business Corporations Act (Ontario) under the name Magna Gold Corp. The authorized share capital of the Company consists of an unlimited number of common shares, without nominal or par value. Its shares have been listed on the TSXV under the symbol "MGR" since June 10, 2019. In addition, Magna's shares trade on the OTCQB

Venture Market, a U.S. trading platform that is operated by OTC Markets Group in New York, under the symbol "MGLQF". The Company's registered address is 82 Richmond Street East, Toronto, Ontario, M5C 1P1.

On June 6, 2019, the Company completed its Qualifying Transaction, as defined in TSXV Policy 2.4 - Capital Pool Companies, consisting of the property option agreement dated September 25, 2018, pursuant to which the Company acquired an option to acquire a 100% interest in the Mercedes Property in Yécora, Mexico.

Magna is a gold mining company engaged in acquisition, exploration, development and operation of quality precious metals properties in Mexico. Magna's vision is to create a leading precious metals company by leveraging its existing platform of assets and people to maximize value for all its stakeholders.

Magna operates one open-pit heap leach operating mine: the San Francisco Mine in the state of Sonora, Mexico, located approximately 150 kilometers north of Hermosillo and 120 kilometers south of the United States/Mexico border via Highway15 (Pan-American Highway). The San Francisco Mine was in residual leaching when it was acquired on May 6, 2020. The mining and crushing activities restarted late in June 2020. During June 2021, the San Francisco Mine completed planned pre-stripping activities and began full-scale and steady rate commercial production.

In addition, Magna has exploration stage projects in Mexico. The exploration stage projects of the Company at the date of this MD&A consist of: (i) the Mercedes Property; (ii) the San Judas Project; (iii) the La Pima Project; (iv) the Las Marias Property; (v) the Los Muertos Project; (vi) the La Fortuna Project (previously described as the Cuproros Project); and (vii) the Margarita Project. Through the acquisition of Molimentales, in addition to the San Francisco Mine, the Company acquired title to the Patricia, Norma, Los Carlos, La Pima, TMC, and Dulce claims, located in the state of Sonora, Mexico. During the nine months ended December 31, 2020, the Company relinquished its title to the TMC claim.

The Company's current sources of operating cash flows are primarily from the sale of gold and silver contained in doré bars produced at the San Francisco Mine. The doré is refined offsite and the refined gold and silver is sold primarily in the London spot market. As a result, Magna is not dependent on a particular purchaser.

TRENDS AND ECONOMIC CONDITIONS

Management regularly monitors economic conditions and estimates their impact on the Company's operations and incorporates these estimates in both short-term operating and longer-term strategic decisions.

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