Financial Information - Dec 31, 2025 (MD&A)

For the years ended December 31, 2025 and 2024 (Expressed in Canadian dollars)

The following is management's discussion and analysis ("MD&A") of the financial condition and results of operations of Spanish Mountain Gold Ltd. (the "Company") and its subsidiary. This MD&A should be read in conjunction with the audited consolidated financial statements, including the notes thereto, for the years ended December 31, 2025 and 2024 ("Financial Statements").

The Financial Statements have been prepared by management in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board. Unless otherwise stated, all amounts are presented in Canadian dollars which is the functional currency of the Company and its subsidiary. References to US$ are to United States dollars. Other information contained in this document has been prepared by management and is consistent with the data contained in the Financial Statements.

The Company's certifying officers are responsible for ensuring that the Financial Statements and MD&A do not contain any untrue statements of material facts or omissions of material fact required to be stated or that it is necessary to make a statement not misleading in light of the circumstances under which it was made. The Company's certifying officers certify that the financial statements, together with the other financial information included in the filings fairly present in all material respects the financial condition, financial performance, and cash flows of the Company as at the date of and for the periods presented in the filings.

In this MD&A, the words "we", "us", or "our", collectively refer to the Company and its subsidiary. The first, second, third and fourth quarters of the Company's fiscal years are referred to as "Q1", "Q2", "Q3" and "Q4", respectively. The first six months of a year are referred to as "H1" and the last six months of a year as "H2". The years ended December 31, 2025 and 2024 are also referred to as "Fiscal 2025" and "Fiscal 2024", respectively.

The Board of Directors approved the disclosure contained in this MD&A on April 1, 2026 ("MD&A Date").

The Company's Board of Directors provides an oversight role with respect to all public financial disclosures by the Company.

Management is responsible for the preparation and integrity of the Company's Financial Statements, including the maintenance of appropriate information systems, procedures, and internal controls. Management is responsible for ensuring that information disclosed externally, including the information contained within the Company's Financial Statements and MD&A, is complete and reliable.

Additional information relating to the Company including its Financial Statements may be found on the Company's website at https://www.spanishmountaingold.com as well as under the Company's profile on SEDAR+ at https://www.sedarplus.ca.

Spanish Mountain Gold Project

The Company is an exploration and development stage company engaged in the acquisition, exploration, and development of mineral properties. The Company's primary asset is the Spanish Mountain property located approximately 180 kilometres ("km") north of Kamloops, British Columbia ("BC") and 66 km northeast of Williams Lake, BC. The Spanish Mountain property refers to the contiguous mineral and placer claims the Company holds while the Spanish Mountain gold project (the "Project") refers to the mineral resource that the Company has defined in an area within the property. The Company's focus is to advance the development of the Project and conduct further exploration programs on the property.

The Company completed a Pre-Feasibility Study ("PFS") of the Project in 2021, which has now been superseded by an updated Mineral Resource Estimate ("2025 MRE") and Preliminary Economic Assessment ("2025 PEA") published on August 18, 2025.

In 2022, based on the 2021 PFS, the Company advanced the environmental assessment ("EA") and permitting processes. The Initial Project Description ("IPD") and Early Engagement Plan ("EEP") for the Project were submitted in March 2022 to the BC Environmental Assessment Office ("BCEAO") and the Impact Assessment Agency of Canada ("IAAC"). Both the provincial and federal agencies accepted the documents within the same month without requesting amendments. The issuance of the Summary of Engagement by BCEAO and the Joint Summary of Issues and Engagement by IAAC on June 23, 2022 completed the early engagement period. The draft Detailed Project Description ("DPD") was submitted to the provincial and federal agencies in December 2022 to initiate the Readiness Decision stage of the EA process. During this phase, the draft DPD was reviewed by the Technical Advisory Committee, participating First Nations, and federal authorities, leading to preparation of the final DPD on which the readiness decision will be based. A readiness decision was previously expected to be received around the end of April 2023, but the Company chose to delay completion of this process phase, and finalization of the DPD.

In 2023, the Company chose to suspend submission of the final DPD and undertake additional geological work and a detailed review of the PFS to further derisk and optimize the Project. During 2023 and 2024 this additional review work continued and the Company in Q3 2024 elected to complete a new preliminary economic assessment and mineral resource which was realized in Q3 2025 with the completion of the 2025 PEA and 2025 MRE. This review and the 2025 PEA will result in changes to the Project plan that will need to be incorporated into a new draft DPD prior to completion of the review and finalization by the agencies. The Company is in the process of tendering and awarding a gap analysis for the proposed changes to the Project description which will then be used to modify the DPD to advance towards an EA. Note, the Company targets to complete an updated PEA in H1 2026 incorporating potential upside improvements that include: (i) the addition of resources from the Phoenix Deposit, which was not contemplated in the 2025 PEA, (ii) the addition of 'ore' sorting technology to the processing of Phoenix and Main Deposit mineralization to increase the average grade of mineralization and overall throughput, (iii) an updated MRE with results from the 2025 and 2026 drill program that focused on the Orca and K zone targets, and (iv) incorporating the higher 3 year trailing long term gold price that has increased since the 2025 PEA and 2025 MRE technical report was published. The EA gap analysis will also consider this update and any potential changes to the EA as the Project advances.

The Company has continued active engagement with First Nations and other communities critical for the success of the EA process and is working to support the full involvement of the First Nations. Prior to the submission of the IPD, management conducted pre-submission review with three First Nations (Williams Lake, Xatśūll, and Lhtako Dené) whose traditional territories include the Project area. The Company signed an Engagement Protocol Agreement with Xatśūll First Nation in October 2021 and proceeded with the process of completing a Life-of-Mine Relationship Agreement with Williams Lake First Nation and the aforementioned Nations. After the completion of the 2025 PEA, the Company has engaged in further discussions with the William Lake First Nations and Xatśūll First Nations and requested a meeting with the Lhtako Dene First Nation. The Company has included First Nations contractors and employees, and local employees from the Likely community and British Columbia to advance the Project.

The 2025 PEA, 2025 MRE and joint PEA-MRE NI-43-101 Technical Report were completed by several consultants, led by Ausenco, as the overarching Qualified Person ("QP") lead. The 2025 PEA and 2025 MRE incorporated the results of additional exploration drilling conducted through 2024 and since the 2021 PFS, and improvements to further enhance the Project's economics and viability in several areas including power, geology, mineral processing, water management and treatment, tailings, various pit scenarios, and electrification of mining alternatives.

• Environmental assessment and permitting: The EA remained on hold, but the Company has continued communication with First Nations and the nearby community of Likely while also continuing with base line environmental work. The Company recently hired a new Vice President Environment, Social and Governance ("VP ESG") and plans on moving forward to progress towards the EA certification process.
• 2025 PEA and 2025 MRE:

  • A 2025 MRE was produced based on the 199,000 metres of relogged core, geophysical, and geochemical work done since 2023. The 2025 MRE was based on a new more tightly constrained geological model of the Main Deposit, based on a better understanding of geological controls to mineralization including both lithological and structural elements.

  • Ausenco completed a financial analysis working with Moose Mountain Technical Services Ltd. using the inputs from the other 2025 PEA QPs, and conclusions of the Whittle Consulting Enterprise Optimization (see July 3, 2025 press release) which concluded the optimal proposed mining operation, given the 2025 MRE, was a 26,000 tonne per day operation.

• Metallurgy and Mineral Processing: The 2025 PEA identified 'ore' sorting as a potential value add target expansion case. The Company is looking at ways of improving the overall Project economics by increasing the proposed feed grade in the mill and hence potential higher gold production using 'ore' sorting, and depending on the overall recoveries and economics to be assessed during the H1 2026 PEA update. If positive, 'ore' sorting is expected to be included in the planned Feasibility Study ("FS"). ABH Engineering Inc. previously completed a scoping level sensor-based particle 'ore' sorting study and report that concluded Project's Main Deposit resource mineralization was amenable to 'ore' sorting utilizing X-ray transmission (XRT). The Company engaged Ore Portal and ABH Engineering Inc. in Q4 2025 to conduct follow-up desk top work and laboratory tests on various mineralization types respectively to assess the potential inclusion of 'ore' sorting expansion

  scenarios that could improve the scale, milled grades, gold produced and overall economics compared to the 2025 PEA proposed mining operation (See press release dated October 20, 2025 for more details). Bulk 'ore' sorting would sort 'ore' prior to being processed by crushing or other process before entering the mill whereas particle 'ore' sorting would sort the 'ore' after some initial level of crushing the 'ore.' The Ore Portal study concluded that bulk 'ore' sorting on run of mine 'ore' prior to mill feed was of no economic benefit to the Project. ABH Engineering Inc. completed preliminary particle sorting on the Phoenix Deposit which concluded a 2 to 2.5 times milled grade uplift over the samples tested. Further metallurgical test work has been commissioned to determine the final gold recovery following particle 'ore' sorting on the Phoenix deposit mineralization and the company awaits particle sorting results from the Main Deposit. The results of this work, if proven to be positive, are anticipated to be included in an updated PEA and MRE to be completed in H1 2026, that would also include drill results from the Winter 2025 Drill Program and Fall 2025 Drill Program.

• Power, electrification, lowering carbon intensity and green-house gas emissions: The Project's location is supported by excellent infrastructure including connectivity to the provincial power grid supplied with low-cost, renewable hydro power. The System Impact Study (SIS) Stage 2 Conceptual Design with BC Hydro (the provincial electric utility provider) was started in Q1 2025. The study is for the proposed engineering and construction of a new BC Hydro 230 kilovolt ("kV") substation (SMM) to be located at the interconnection point near the BC Hydro McLeese Lake capacitor substation that will be connected to the 74 km long 230 kV transmission line to the Project constructed by the Company. The estimated cost of the power line is included in the 2025 PEA capital expenditures. The 2025 PEA utilizes electrified drills and shovels. Electric haul trucks are commercially available, but equipment manufacturer capital and operating cost estimates were not available and therefore an electric truck fleet was not included in the 2025 PEA. Through collaboration with BC Hydro, other opportunities have been identified for consideration in the next economic study. These opportunities could include electrification and automation of mining and material handling solutions such as: trolley assist haul trucks, material handling by conveyors, battery powered support equipment and other energy efficient equipment. The 2025 PEA utilized conventional diesel haul trucks but could utilize renewable diesel to minimize the carbon footprint of the proposed mining operation. Stage 2 of the SIS is expected to be completed in early Q2 2026.The Company plans to move forward with Stage 3 that involves more detailed engineering and planning for the next stage of building the SMM and has advanced BC Hydro $400k in Q1 2026 to maintain seamless transition of team and activities between Stage 2 and the start of Stage 3 in Q2 2026.
• Geotechnical and hydrogeological: BGC Engineering was engaged to evaluate, improve upon and de-risk the tailings, water, and waste management facilities. Based on their recommendations to utilize dry stack tailings, the 2025 PEA is estimated to reduce the water discharge by approximately 50% at peak improvement and provide a more flexible tailings solution where tailings can be placed as landforms around other infrastructure and potential future mineralization additions to the mine plan such as the Phoenix Deposit. In Q4 2025 and Q1 2026, BGC commenced early works necessary to progress the Project towards a Feasibility Study and continues this program that included site investigation and definition of the 2026 geotechnical drilling and field program proposed for the FS.
• Favorable economics: The 2025 PEA financial model concluded favorable economics with a base case after-tax NPV5% of C$1,025 million with an after-tax IRR of 18.2% and 3.2-year payback, using a gold price assumption of US$2,450/ounce ("oz"). Using a July 1, 2025 spot gold price of US$3,300/oz gold, after-tax NPV5% increases to C$2,315 million with the after-tax IRR increasing to 32.0% and payback reduced to 2 years (see press release dated July 3, 2025 for more details). The Company plans on producing an updated PEA and MRE in H1 2026 incorporating the benefits of 'ore' sorting, the 2025 through part of 2026 drill results, and an increased long-term gold price forecast.
• Phoenix initial MRE: The Company undertook additional drilling on the previously identified Phoenix prospect. Based on 14 drill holes plus historical drilling, Equity Exploration produced an estimate for the Phoenix Deposit of approximately 357,000 ounces of inferred gold resources. These additional ounces were not included in the financial model produced for the 2025 PEA. The Company undertook follow up XRT sensor-based 'ore' sorting and will conduct metallurgical test work to support a tradeoff analysis to determine if 'ore' sorting can potentially uplift the Phoenix Deposit feed grade. The initial 'ore' sorting work on Phoenix potential mill feed concluded that the average milled grade could be doubled or more through particle 'ore' sorting. Further metallurgical work is currently ongoing and if economically positive could be included in an updated MRE to be completed in H1 2026.
• METSO Memorandum of Understanding ("MOU"): In Q1 2026 Company signed a MoU with Metso Canada Inc. regarding the collaboration and support for the proposed process plant and tailings dewatering facilities. This collaboration agreement includes trade-off studies as well as support in equipment selection and supply of process solutions. Subject to the execution of definitive agreements, Metso may also provide customary performance commitments for its equipment solutions as SMG advances the Project towards feasibility and ultimately a build decision. If SMG selects Metso's equipment solutions during the anticipated feasibility phase towards a build decision, SMG would be targeting up to $50M of potential Original Equipment Manufacturer (OEM) financing which could be backed by a country of manufacturing origin state export credit agency (ECA) subject to lender approvals and execution of definitive agreements. This marks a key milestone for the company as it prepares for the next stages of development and potential alternatives for Project build financing.

Corporate

On January 27, 2025, the Company listed on the OTCQB venture market under the symbol, "SPAUF".

On March 19, 2025, the Company engaged German Mining Networks GMBH to provide marketing and investors relations services in Europe.

On June 9, 2025, the Company granted 2,860,500 stock options to officers and directors of the Company and 221,500 stock options to employees and consultants at an exercise price of $0.175 and will vest over 10 years.

On July 3, 2025, the Company announced the results of a PEA, including an updated MRE, for the Project. On August 18, 2025, the Company posted the 2025 PEA Technical Report and MRE on SEDAR+ and on the company's website.