Montage Gold : Second Quarter Report 2022

MONTAGE GOLD CORP.

SECOND QUARTER REPORT

For the Three and Six months ended June 30, 2022 and 2021

MONTAGE GOLD CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS THREE AND SIX MONTHS ENDED JUNE 30, 2022 (Amounts in Canadian Dollars unless otherwise indicated)

The following management's discussion and analysis ("MD&A") of Montage Gold Corp. ("Montage" or the "Company") should be read in conjunction with the unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2022. The financial information in this MD&A is reported in Canadian dollars unless otherwise indicated and is derived from the Company's condensed interim consolidated financial statements prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board, applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. The effective date of this MD&A is August 29, 2022. Additional information about the Company and its business activities is available under the Company's profile on SEDAR at www.sedar.comand the Company's website www.montagegoldcorp.com.

BUSINESS OVERVIEW

Montage is a Mineral Resource company engaged in the exploration and development of mineral properties in Côte d'Ivoire which include the Koné Gold Project (previously named the Morondo Gold Project), the Korokaha Gold Project, and the Bobosso Gold Project (collectively, the "Montage Properties"). As at the date hereof, Montage's sole material asset is the Koné Gold Project. The continued operations of Montage and the recoverability of the amounts shown for the Montage Properties is dependent upon, among other things, the ability of Montage to obtain necessary financing to complete the exploration and development of such properties and upon future profitable production from or disposition of such properties.

Montage Gold Corp. was incorporated under the Business Corporations Act (British Columbia) on July 4, 2019, as a wholly-owned subsidiary of Orca Gold Inc ("Orca").

On July 17, 2019, Montage, Avant Minerals Inc ("Avant), and Progress Minerals International Inc ("Progress") entered into the Share Purchase Agreement that contemplated the consolidation of: (i) the mineral interests of Orca located in Côte d'Ivoire; (ii) the mineral interests of Avant located in Côte d'Ivoire and Burkina Faso; and (iii) cash held by Avant.

On July 23, 2019, pursuant to the Orca Spin-Out: (i) all of the shares of Ghazal Resources Inc., a former indirect wholly-owned subsidiary of Orca, were transferred to Montage; and (ii) Montage issued 33,000,000 Common Shares to a subsidiary of Orca, which were subsequently transferred to and are now held by Orca.

On August 27, 2019, Montage, Avant, and Progress completed the Avant Transaction pursuant to the Share Purchase Agreement. Under the Avant Transaction, Montage acquired all of the issued and outstanding shares of Progress Minerals, being a wholly-owned subsidiary of PMII and an indirect subsidiary of Avant, existing under the laws of the British Virgin Islands, in exchange for 22,000,000 Common Shares.

On August 27, 2019, the Montage Shareholders Agreement was entered into among Montage, Orca, and Progress and Montage completed a private placement of $8.2 million, pursuant to which Montage issued 18,226,374 Common Shares at $0.45 per share. Additionally, 250,000 Common Shares were issued as an advisory fee in respect of the Avant Transaction at deemed price of $0.40 per Common Share. Following this transaction Orca's ownership in Montage decreased to 45%, however Montage remained a subsidiary of Orca based on Orca's ability to control the appointment of key management personnel, make operating decisions and also its level of representation on the board of directors.

On October 23, 2020, Montage closed its initial public offering of an aggregate of 27,272,728 common shares at a price of $1.10 per share for total proceeds of $30 million and commenced trading on the TSXV under the ticker symbol MAU. Montage granted the underwriters an over-allotment option exercisable in whole or in part at their sole discretion for a period of 30 days following the closing of the offering, to purchase up to an additional 15% of the common shares at the offering price issued as part of Montage's initial public offering. On October 30, 2020 the underwriters fully exercised their over-allotment option to acquire an additional 4,090,909 shares at the offering price resulting in additional aggregate gross proceeds of approximately $4.5 million.

Following the Montage IPO, Orca's percentage ownership in Montage decreased from 45% to 31.5% and Orca entered into a new investor rights agreement with Montage replacing the initial shareholders agreement

between Orca and Avant. Under the investor agreement Orca has the right to appoint a single director to the board of directors if it has a 10% ownership percentage in Montage and can appoint up to three directors if it has a 20% ownership interest in Montage. With Orca's reduced board representation and ownership percentage, Orca has significant influence, rather than control over the Company and Orca has reported the results of Montage as an associate using the equity method effective October 23, 2020.

On November 3, 2020 Montage completed the disposal of its 51% interest in its Burkina Faso properties to Predictive Discovery Limited ("Predictive") in exchange for 4,028,477 Predictive shares with a fair value of $0.2 million.

On February 27, 2022, Montage's largest shareholder, Orca, entered into a definitive agreement pursuant to which Perseus Mining Limited ("Perseus") would acquire all of the issued and outstanding shares of Orca. The transaction closed on May 19, 2022, which resulted in Perseus becoming the largest shareholder of Montage, holding 33,000,000 common shares.

Q2 2022 OPERATING HIGHLIGHTS

On April 25, 2022, Montage announced the award of a new exploration permit within the KGP area, the Sisséplé Exploration Permit covering 322km2, sitting within trucking distance of the Koné deposit. During the quarter, initial exploration activities began within the Sisséplé area which included first pass soil sampling within areas of known mineralized trends. Results from initial programs were encouraging and indicate the presence of anomalism which are currently being followed up.

Exploration within the quarter also included programs on the Farandougou Exploration Permit, following up previously identified soil anomalies, within an area that had received no prior exploration. Results from Farandougou are being interpreted and will be considered for further follow-up if warranted.

Activities in respect of the Koné deposit were limited to further refinements to the Environmental & Social Impact Assessment.

On June 8, 2022, Montage announced the signing of an acquisition agreement with subsidiaries of both Barrick Gold Corporation ("Barrick") and Endeavour Mining Corporation ("Endeavour"), pursuant to which Montage will acquire a 100% interest (the "Transaction") in the Mankono-Sissédougou Joint Venture Project ("the Transaction"), which consists of three properties covering 893km2 contiguous to the KGP. The transaction consolidates a total property area of 2,259km2 for the first time, all of which is relevant to an eventual gold mining operation centred around the Koné deposit. The Transaction will close upon the award of a particular exploration permit that is currently under application. The agreements provide for an outside date of December 7, 2022 for closing of the Transaction, which can be extended if agreed by the parties. In connection with the Transaction, Montage completed a $20,000,000 financing of subscription receipts ("the Offering"), the proceeds of which are now held in escrow pending the closing of the Transaction. The Company paid the Underwriters a cash fee equal to 4.0% of the aggregate purchase price of the subscription receipts sold under the Offering (other than the subscribers that were on the president's list, which equated to $8,750,000 of the total subscription receipts of $20,000,000). The gross proceeds from the sale of the subscription receipts, less 25% of the underwriting fee and underwriter legal expenses related to the Offering were deposited and are held in escrow by Endeavor Trust Corporation, as subscription receipt agent, pending the satisfaction or waiver of the escrow release conditions. The company's largest shareholder, Perseus, elected to not participate in the Offering. Once the escrow release conditions are met and the common shares pursuant to the Transaction are issued, the ownership percentage interest held by Perseus will be reduced to 21.1% (33 million common shares).

At the time of closing the financing, the underwriter fees paid were $112,500 and underwriter legal fees incurred were $100,375 totalling costs of $212,875, which were paid from the gross subscription proceeds. A further $40,000 of subscription receipts were received on July 4, 2022, which resulted in net funds of $19,747,125 being held in escrow by Endeavour Trust Corporation as at June 30,2022.

The Company also incurred transaction legal fees and TSXV fees for the financing totalling $145,430. It is forecast that outstanding transaction costs include underwriter fees of $337,500 (75% of the total underwriting fee) and legal and other fees of up to $400,000 are to be paid. If the Transaction does not close, the underwriter fees of $337,500 will not be paid.

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While held in escrow, the proceeds from the sale of the subscription receipts will accrue interest for the benefit of the Subscription Receipt holders as follows:

• 10.0% per annum, payable in cash on the earlier of (i) the satisfaction of the escrow release conditions; and (ii) the termination date or such earlier date if the escrow release conditions will not be met in accordance with the subscription receipt agreement ("SRA"); and
• 6.0% per annum payable in cash, on the two month anniversary following June 30, 2022 ("bonus interest payment"), and each subsequent two month anniversary of the prior bonus interest payment date (each such two month period until the earlier of (i) the satisfaction of the escrow release conditions; and (ii) the termination date or such earlier date if the escrow release conditions will not be met in accordance with the SRA. No interest shall accrue in accordance with the foregoing and no bonus interest shall be payable for any partial bi-monthly period.

Upon closing of the Transaction, the Company will issue 22,142,857 shares to Barrick and Endeavour and pay an aggregate cash payment of $14.5 million and delivery of net smelter returns of 1.4% and 0.6% to Barrick and Endeavour respectively.

The Mankono properties are considered highly prospective for exploration of higher-grade material to supplement material contained in the Koné deposit. Activities by prior operators included over 36,000 soil samples, 15,500m of trenching, 31,000m of air core drilling, 6,000m of reverse circulation drilling and 8,560m of diamond core drilling. Historic exploration spending on the combined land package by all parties is approximately US$20 million.

OUTLOOK

The completion of the acquisition of the Mankono properties will shift the Company's focus on regional exploration for an estimated 12-18 month period with the objective of delineating at least 1.0 million ounces of 43-101 compliant resources.

Upon completion of the Mankono Transaction, which is expected to occur in Q3 or Q4 of 2022, the Company will issue a total of 50,714,286 common shares, as follows: 28,571,429 common shares upon conversion of subscription receipts, 15,500,000 common shares issuable to Barrick, and 6,642,857 common shares issuable to Endeavour. A cash payment of $14.5 million will be paid to Barrick and Endeavour and a 2% royalty will be granted on the Mankono properties that will be split by Barrick and Endeavour 70%/30% respectively under separate agreements.

SUMMARY OF QUARTERLY FINANCIAL RESULTS

	June -22	Mar - 22	Dec - 21	Sept - 21	June - 21	Mar - 21	Dec - 20	Sept - 20
Revenue ($000's)	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil
Exploration costs	620	1,278	2,106	2,567	7,599	7,315	3,374	1,551
($000's)
Total net loss ($000's)	1,564	2,268	3,386	3,418	8,533	8,153	5,254	2,230
Net loss attributed to the
Company's shareholders	1,564	2,268	3,386	3,418	8,533	8,153	5,585	2,189
($000's)
Net loss per share
attributed to the	0.02	0.02	0.03	0.03	0.08	0.08	0.06	0.03
Company's shareholders
basic and diluted ($)
Total assets ($000's)	38,668	20,786	23,410	26,175	31,517	41,013	46,694	18,269
Total current financial	20,970	1,116	1,101	695	3,375	4,544	2,118	863
liabilities ($000's)
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As a junior mining company, Montage has no expectation of generating operating profits until it develops a commercially viable mineral deposit.

Following completion of the initial public offering in October 2020, Montage commenced a drill campaign designed to expand Inferred Mineral Resources at the Koné Gold Project. Following completion of that drill program an updated Inferred Mineral Resource estimate was calculated and released on January 28, 2021 which comprised of 128Mt grading 0.80g/t for 3.16Moz of gold at a cut-off grade of 0.40g/t.

The Company completed its exit from Burkina Faso following the sale of its entities to Predictive Discovery Limited on November 3, 2020, reporting a loss from discontinued operations of $0.4 million.

During Q1, 2021 the Company advanced its drilling campaign at the Koné Gold Project as well the required studies and workstreams for the completion of the PEA. Total exploration costs were $7.3 million (2020: $1.3 million), with 87% being drilling and sampling costs. Prior year exploration costs for Q1 2020 included $0.5 million for Burkina Faso.

Administration costs, excluding share-based compensation, for the period ended March 31, 2021 was $0.5 million (2020: $0.3 million). The increase in administration costs is largely due to an increase in management costs following the Company's IPO.

During Q2 2021, the Company completed its PEA for the Koné Gold Project. Total exploration costs during Q2 were $7.6 million (2020: $0.9 million) and were largely for drilling and sampling work at a cost of $6.5 million. Exploration costs for the six months to June 30, 2021 were $14.9 million (2020: $2.2 million) which were incurred to complete the Company's 60,000m drill program. Administration costs were $1.0 million during Q2 2021 (2020: $0.4 million). The increase in administration costs compared to the prior year reflect an increase in management costs following the Company's IPO and an increase in D&O insurance costs for 2021.

Total exploration costs during Q3 2021 were $2.6 million (2020: $1.6 million). During July 2021, the Company completed its infill drilling program at the Koné Gold Project. This program commenced in January 2021 and included a total of 61,172m of drilling (41,682m of core and 19,490m of RC drilling).

Exploration costs in Q4 2021 were $2.1 million (2020: $1.5 million), largely to complete the Koné Gold Project DFS for $1.1 million and personnel and exploration support costs of $1.0 million.

Exploration costs during Q1, 2022 were $1.3 million (2021: $7.3 million), a reduction of $6.0 million compared to the prior year. Exploration costs were spent on permitting work and sampling and geochemistry within the KGP project.

Exploration costs during Q2, 2022 were $0.6 million (2021: $7.6 million), a reduction of $6.9 million compared to the prior year. Exploration costs decreased compared to the prior year as the Company completed its PEA for the KGP project during H1 2021 with expenditures for drilling and sampling work totalling $6.5 million. Exploration work during Q2, 2022 focussed on soil sampling on the Sisséplé Exploration and Farandougou Exploration Permits.

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