2024 Management’s Discussion & Analysis

INTER-ROCK MINERALS INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

For the Year Ended December 31, 2024

April 24, 2025

INTER-ROCK MINERALS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2024

NOTES TO READER

References to "Inter-Rock" and the "Company" in this discussion refer to Inter-Rock Minerals Inc. and its subsidiaries taken as a whole.

The following management discussion and analysis ("MD&A") provides an analysis of the financial condition of Inter-Rock at December 31, 2024 and compares it to the financial condition of the Company on December 31, 2023. The MD&A also analyzes the Company's results of operations for the year ended December 31, 2024 and compares those results to the results for the year ended December 31, 2023.

This MD&A has been prepared in compliance with the requirements of National Instrument ("NI") 51-102 - Continuous Disclosure Obligations. This MD&A should be read in conjunction with Inter- Rock's annual audited consolidated financial statements and corresponding notes for the years ended December 31, 2024 and December 31, 2023. The Company's financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB").

All monetary amounts are expressed in United States dollars unless otherwise indicated.

This MD&A is prepared as of April 24, 2025.

Inter-Rock uses earnings before interest, taxes and depreciation and amortization ("EBITDA"), a non-IFRS performance measure in this MD&A as it believes this generally accepted industry performance measure provides a useful indication of the Company's financial performance. This non-IFRS performance measure does not have a standardized meaning defined by IFRS and may not be comparable to information in the reports and filings of comparable companies. Accordingly, it should not be considered in isolation or as a substitute for performance measures prepared in accordance with IFRS.

For further information and a detailed reconciliation, refer to the section entitled "Non-IFRS Performance Measures" in this MD&A.

DESCRIPTION OF THE BUSINESS

Inter-Rock is domiciled in Canada and is continued under the Business Corporations Act (Ontario). The Company's office is located at 2 Toronto Street, Suite 500 Toronto, Ontario, M5C 2B6, Canada. The Company's common shares are traded on the TSX Venture Exchange under the symbol "IRO". The Company also has convertible preferred shares outstanding that do not trade on an exchange (see Note 13 to the Consolidated Financial Statements).

Inter-Rock owns two operating businesses in the United States: Papillon Agricultural Company Inc. ("Papillon") and MIN-AD Inc. ("MIN-AD"). Papillon develops, markets and distributes toll manufactured premium dairy feed nutritional supplements, including MIN-AD's products. MIN- AD is engaged in the production of dolomite and clay products, primarily for the animal feed industry. Approximately 80% of MIN-AD's annual production is sold to Papillon.

2024 HIGHLIGHTS

• ➢ Record consolidated revenue of $99.1 million.

• ➢ Gross profit of $12.4 million, 14% higher than the prior year. Generated EBITDA of $4.0 million as compared with $3.7 million in 2023.

• ➢ Improved marketing and sales efficiencies with Papillon now acting as the exclusive distributor of all MIN-AD's sales to the dairy industry.

➢

Installed and commissioned an automatic bagging facility at the MIN-AD plant.

OPERATIONS REVIEW

Papillon

Papillon develops, produces and markets premium specialty nutritional products for dairy consultants, feed suppliers and dairy producers in the United States. Papillon has its own line of high quality proteins and rumen prebiotic and probiotic products that are produced under toll manufacturing agreements. In addition, Papillon distributes MIN-AD products and a clostridia control product for dairy cows (clostridia are bacteria naturally found in the environment and in the gastrointestinal tracts of dairy cows and calves, which under certain conditions can form toxins that result in reduced growth performance and digestive disorders).

Since the second quarter of 2024, Papillon has acted as the exclusive distributor for all MIN-AD's dairy industry sales. Under the distribution arrangement, Papillon manages all of MIN-AD's sales and marketing activities (with the exception of MIN-AD's sales to an industrial customer). MIN-AD products are purchased by Papillon and then sold by Papillon to dairy feed manufacturers.

Papillon's revenue is materially impacted by changes in ingredient costs for its protein products.

As Papillon targets a set gross profit per ton, revenue fluctuates commensurately with changes in ingredient costs, as sales prices are adjusted regularly to maintain gross margins. Accordingly, gross profit better reflects financial performance than revenue.

Sales volumes for all products in aggregate in 2024 increased by 37% over 2023 volumes. Almost three quarters of the increase was attributable to higher sales of MIN-AD products as a result of the aforementioned change in the Papillon-MIN-AD distribution agreement. Sales of protein products increased by 15% year over year. The improved sales performance in 2024 is a result of continuing to expand sales to new geographic locations, ongoing marketing programs and higher milk prices.

Papillon recorded revenue of $97.5 million in 2024, up from $86.1 million in 2023.

Gross profit (revenue less cost of goods sold) in 2024 was $10.3 million, 14% above the $9.0 million of gross profit recorded in 2023. Gross profit was higher for protein and MIN-AD products, while gross profit for probiotics and Papillon's clostridia control product were comparable to the prior year.

Papillon's gross profit margin was 10.6% in 2024, up slightly from 10.4% in 2023.

Cash flow from operating activities (net of management fees paid to Inter-Rock and before working capital changes) was $3.4 million in 2024, as compared with $3.0 million in 2023. The increase in cash flow in the current year is a result of higher gross profits which more than offset higher selling general and administrative ("SG&A") expense, which was primarily related to higher compensation expense, higher management fees and additional spending on professional fees. Papillon's operating margin in 2024 was 3.5%, unchanged from the prior year.

MIN-AD

MIN-AD quarries and processes dolomite and clay products for dairy and beef cattle feed. The specialty dolomite is used as a source of magnesium and calcium and as a rumen acid buffer. MIN-AD's newly developed clay business produces products for use in anti-caking and toxin control applications. MIN-AD's operations are in northern Nevada near the town of Winnemucca.

MIN-AD's sales volumes in 2024 were unchanged from 2023. Similarly, gross profit of $2.2 million in 2024 was the same as the prior year. (The Company uses gross profit as a proxy for financial performance rather than net revenue as net revenue is impacted by freight rates and fuel surcharges, among other items, that are independent of product revenues).

Operating cash flow (net of management fees paid to Inter-Rock and before working capital changes) was $576,000 in 2024, a 17% decrease from $696,000 in 2023. The decrease in cash flow is primarily attributed to higher SG&A expense. MIN-AD hired a senior manager in 2024.

Payments for rail car leases (recorded as financing payments, consequently not netted against cash flow from operations) totalled approximately $236,000 in 2024, up from $184,000 in the prior year.

MIN-AD incurred approximately $1.2 million of capital expenditures in 2024, similar to the level in the prior year (2023: $1.3 million). Higher than normal capital spending in both 2024 and 2023 was primarily related to the purchase and installation of automatic bagging equipment for the MIN-AD plant and also for equipment purchases, including a transloader (for moving MIN-AD bulk material from rail cars to trucks), a forklift and a pickup truck. MIN-AD's capital expenditures in 2025 are budgeted at $500,000.

CONSOLIDATED FINANCIAL REVIEW

• 1 Cashflow is after working capital changes.

• 2 See Non-IFRS Performance Measures.

Review of Fourth Quarter Financial Results

The Company recorded revenue of $24.8 million in the fourth quarter of 2024, similar to the prior year period (Q4 2023: $24.7 million). Considering the same periods, consolidated gross profit increased 11% to $3.1 million, up from $2.8 million, driven primarily by an increase in protein and MIN-AD sales by Papillon. SG&A expense of $2.5 million in the fourth quarter of 2024, was up from $1.8 million in the prior year period. Higher SG&A expense in the fourth quarter of 2024 was primarily attributable to compensation related costs and increased professional fees. EBITDA in the fourth quarter of the current year declined to $625,000, from just over $1.0 million in the year earlier period as higher SG&A expenses more than offset higher gross profits. SG&A was impacted by a one-time charge of $310,000 related to expensing a patent purchase from a prior year. The net loss in the fourth quarter of 2024 was $92,000 as compared with net income of $495,000 million in the prior year period. The net loss reflects a writedown of $435,000 of the Company's investment in Embion (see Embion Investment below).

Review of 2024 Financial Results

Consolidated revenue in 2024 was $99.1 million, up from $90.5 million in 2023. Papillon accounted for 98% of the Company's consolidated revenue in 2024 (approximately 80% of MIN- AD's $8.4 million of revenue was derived from inter-company sales to Papillon, however, this revenue is eliminated upon consolidation).

Higher sales volumes at Papillion generated an increase in consolidated gross profit to $12.4 million (2023: $10.9 million). The gross profit margin was 12.5% in 2024 as compared to 12.1% in 2023. Operating costs at Papillon primarily comprise raw material costs and toll manufacturing fees, while MIN-AD's operating costs include quarrying, processing and maintenance costs.

SG&A expenses were $8.5 million in 2024, as compared with $7.3 million in 2023. The increase in SG&A is primarily related to higher expenses for payroll and benefits and an increase in professional service fees. SG&A costs include all administrative, sales and marketing and insurance costs for the Company's two operating subsidiaries, as well as Toronto office general and administrative costs and foreign exchange impacts on Toronto based expenses.

Interest expense comprises interest on debt and interest recognized on lease liabilities. In 2024, interest expense was $166,000, as compared with $76,000 in 2023. Higher interest expense was attributable to an increase in debt at MIN-AD and new leases for additional rail cars, also at MIN-AD.

During 2024, the Company incurred interest expense related to its preferred shares of $278,000, similar to the expense in 2023 of $285,000. Dividends are recorded as interest on Series A preferred shares on the consolidated statement of income. The dividends are calculated using the preferred share value of $0.20/share and a rate equivalent to the U.S. prime interest rate.

For the year ended December 31, 2024, the Company recognized a current tax expense of $209,000 and a deferred tax expense of ($5,000), as compared with a current tax expense of $302,000 and deferred tax expense of $252,000 for the year ended December 31, 2023.

Inter-Rock reported net and comprehensive income of $1.8 million, or $0.08 per common share in 2024 as compared with $1.8 million, or $0.08 per common share in 2023.

FINANCIAL CONDITION

1 Lease obligations and total debt are included in total liabilities.

At the end of 2024, the Company had a strong financial position, with working capital of $10.5 million. Working capital includes consolidated cash of $6.2 million. Accounts receivable were reduced from $13.2 million at year end 2023 to $9.7 million at year end 2024. Collection of accounts receivable continues in the normal course. Total debt at December 31, 2024 was approximately $1.2 million, up from $513,000 at year end 2023. The increase was due to additional borrowing to finance the automatic bagging equipment at the MIN-AD processing plant and borrowing for mobile equipment purchases. The Company does not anticipate additional borrowing in 2025.

Debt Facilities

At December 31, 2024, the Company's outstanding debt comprised the following:

Debt facilities at December 31, 2024:

• (i) MIN-AD $500,000 revolving credit facility: a one-year, revolving credit facility bearing interest at the U.S. bank prime rate plus 1.00% per annum. The facility matures on May 25, 2025. The Company renews the facility annually. At December 31, 2024 the outstanding balance was $470,000. The line is secured by MIN-AD's assets and is guaranteed by both the Company and its subsidiary, Secret Pass Gold Inc.

• (ii) MIN-AD term loan: an equipment financing facility of up to $800,000 with a nine-month drawdown period, which ended March 2, 2024, followed by a 57-month amortization period that commenced April 2, 2024. Proceeds of the loan were used to partially fund the purchase and installation of automatic bagging equipment at MIN-AD. A total of $692,000 was advanced and, with the expiration of the drawdown period, no additional funds are available. Only interest was paid during the drawdown period at a rate equal to the U.S. prime rate plus 50bps. During the amortization period, the interest rate is fixed at 6.75%. The loan is secured by the equipment and is guaranteed by Secret Pass Gold Inc. and the Company. $597,000 was outstanding at December 31, 2024.

• (iii) MIN-AD equipment financings: term loans to finance the purchase of a light truck and fork lift at MIN-AD. Each loan has monthly repayments over a 36-month term

and bear interest at 9% and 0.9% respectively. A total of $115,000 was outstanding under the equipment loans at December 31, 2024.

(iv)

Papillon $1.0 million revolving credit facility: a one-year revolving credit facility bearing interest at the secured overnight financing rate (or "SOFR" - the rate institutions can borrow cash overnight collateralized by U.S. treasuries) plus a spread of 1.88%. The SOFR on December 31, 2024 was 4.49%. The facility matures on June 30, 2025 and can be renewed annually at the discretion of the lender. The facility is secured by the assets of Papillon. There was no outstanding debt at December 31, 2024.

The Company is in full compliance with the terms of its loans as of the date of this MD&A.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity refers to a company's ability to access cash. Sources of liquidity generally include operating cash flow, proceeds from the issuance of debt and equity, availability under credit facilities and proceeds from asset sales. The Company's strategy is to generate positive operating cash flow to fund its operating, financing and capital requirements.

At December 31, 2024, the Company had consolidated cash of $6.2 million. Papillon has relatively large working capital requirements, which necessitates that the Company maintain a significant cash balance. Additional liquidity is provided by operating cash flow, a $1.0 million revolving credit facility available to Papillon and a $500,000 revolving credit facility available to MIN-AD. At the end of 2024, Papillon's facility was undrawn and MIN-AD had $30,000 available under its facility.

The Company's most significant liquidity requirements over the next twelve months are scheduled principal and interest repayments of bank debt and lease payments, which total approximately $1.3 million, (including $470,000 due at maturity in May 2025 under the MIN-AD revolving credit facility, which the Company intends to renew). In addition, the Company has a capital expenditure budget of $500,000 for 2025, a portion of which is discretionary. In the opinion of management, the Company's liquidity comprising cash, cash flow from operations and availability under the revolving credit facilities is sufficient to meet normal capital and operating requirements and financing commitments.

Cash Flows

The change in the Company's cash balance during 2024 is reconciled as follows ($000):

Consolidated cash flow provided by continuing operations after working capital changes in 2024 was $3.1 million as compared with $4.0 million in 2023. The decrease in operating cash flow in 2024 is attributable to negative working capital changes of $644,000 as compared with positive working capital changes of $614,000 in 2023. EBITDA in the fourth quarter of 2024 was $625,000 million, down from $1.0 in the prior year period. For the year, EBITDA was $4.0 million, up from $3.7 million in 2023. The increase in EBITDA in 2024 is attributable to higher gross profits, which more than offset higher SG&A expense.

Cash Flow Used In Financing Activities

In 2024, net cash used in financing activities was $220,000, with proceeds from borrowing of $771,000 more than offset by aggregate payments of $991,000 for debt service, lease payments, preferred share dividends and share buybacks.

Cash Flow Used in Investing Activities

The Company incurred capital expenditures of $1.2 million in 2024 (2023: $1.3 million). All capital expenditures were incurred by MIN-AD and the majority were related to the automatic bagging project at the processing plant, mobile equipment and development of a new rail spur at the plant.

The Company has budgeted approximately $500,000 for capital expenditures at MIN-AD in 2025. The majority of the budgeted amount is related to completing the installation of a new rail spur at the MIN-AD yard.

Embion Investment

In the first quarter of 2023, the Company invested CHF 500,000 in a private Swiss company called Embion and in January 2024 the Company made an additional investment of CHF 65,000. The investments were in the form of non-interest bearing convertible loans. The loans automatically convert to Embion shares on the earlier of the closing date of an Embion financing of a minimum of CHF1.5 million and February 28, 2025.

In accordance with the terms of the loan agreement, in October 2024, the loans were converted to 113,000 shares of Embion, representing a 4.6% ownership interest. The investment in Embion shares was written down by $435,000 to its fair value of $200,000 at December 31, 2024 due to an observable transaction in the form of a recent equity financing, reflecting current market conditions and the estimated fair value of the Company's investment in Embion shares.

Embion is small company developing a novel catalytic process to break down waste biomass, for example, brewer's grains. The process can be adapted to convert certain carbohydrates that can be utilized by bacteria in the gastrointestinal tracts of animals.

Selected Annual Information

1 After working capital changes.

Summary of Quarterly Results

1 Net income and income per share are the net results for the period.

Over the eight-quarter period tabled above, gross profit averaged $2.9 million per quarter and $3.1 million per quarter in 2024. After falling in the first quarter of 2024, average quarterly milk prices in the second through fourth quarters of 2024 exceeded prices in the same quarters in the prior year. In 2024, milk prices were supported by a reduced supply of milk, which was attributed to hot weather, (which can reduce milk production), a reduced milking herd, the impact of bird flu on dairy herds, a shortage of heifers and strong domestic and export demand for dairy products. Dairy farmers also benefitted from lower feed costs.

FINANCIAL COMMITMENTS

The Company incurs financial commitments in the normal course of operations and financing activities. Financial commitments include payments due under bank loans, equipment leases and equipment loans.

At December 31, 2024, the Company had the following undiscounted financial commitments:

Debt repayments represent the principal only. As the lease obligations in the table represent the contractual undiscounted amount of the commitments, these balances will differ from the amounts disclosed in the balance sheet.

In accordance with the terms of a protein manufacturing agreement signed in 2022, Papillon has committed to purchasing a minimum annual value of protein products over a five-year period, with an aggregate value over the five years of $1.0 million. If the value of the protein purchased is less than $1.0 million, Papillon must pay the difference between the minimum required and the value of the actual amount purchased. The manufacturer can choose to reconcile the account annually or carry forward any differences.

OFF BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements, except for the protein purchase commitment noted above under Financial Commitments.

OUTSTANDING SHARE DATA

As of the date of this MD&A, the Company had 21,859,311 common shares and 17,136,980 preferred shares issued and outstanding. Each preferred share is convertible into one common share. If the preferred shares are converted to common shares, the Company would have 38,996,291 common shares outstanding.

The Company does not have any equity-based compensation plans.

Normal Course Issuer Bid

On August 16, 2024 the Company received approval to commence a Normal Course Issuer Bid (the "NCIB") to purchase for cancellation up to 1,000,000 common shares, representing approximately 4.6% of the issued and outstanding common shares of the Company. Inter-Rock may purchase common shares under the NCIB over a twelve-month period from August 21, 2024. The NCIB will terminate upon the earliest of (i) the Company purchasing 1,000,000 common shares, (ii) the Company providing notice of termination of the NCIB and (iii) the date that is 12 months following the commencement of the NCIB.

As of the date of this MD&A, the Company had purchased 102,500 shares under the NCIB (43,000 in 2024 and 59,500 thus far in 2025). The purchased shares were cancelled.

The Company has undertaken three prior NCIBs that, in aggregate, allowed for the purchase of 3,130,891 common shares. Under the three NCIBs the Company purchased a total of 656,000 common shares. All common shares purchased by the Company were cancelled.