EnviroMetal Technologies : Management Discussion and Analysis

Management Discussion and Analysis

For the three and nine-month periods ended September 30, 2022 and 2021

EnviroMetal Technologies Inc.

Management Discussion and Analysis

For the three and nine-month periods ended September 30, 2022 and 2021

1. INTRODUCTION

This Management Discussion and Analysis (MDA) has been prepared to provide material updates and analysis of the business operations, financial condition, financial performance, cash flows, liquidity, and capital resources of EnviroMetal Technologies Inc. (EnviroMetal or the Company) (formerly EnviroLeach Technologies Inc).

The information provided herein should be read in conjunction with the Company's unaudited condensed consolidated interim financial statements (Interim Financial Statements) and the notes thereto for the nine-month period ended September 30, 2022, and the audited financial statements for the year ended December 31, 2021. The Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS).

Except as otherwise disclosed, all dollar figures in this report are stated in Canadian dollars. The effective date of this report is November 29, 2022.

EnviroMetal Technologies Inc. is listed on the Canadian Securities Exchange (the CSE) under the symbol ETI and began trading on March 30, 2017. In addition to the listing on the CSE, the Company also trades on the OTCQX and Frankfurt Stock Exchange under the symbols EVLL and 7N2, respectively.

The Company has developed a unique, cost-effective, cyanide free, alternative to current broadly used methods for the hydrometallurgical extraction of precious metals from ores, concentrates and other host materials for use in the primary and secondary metals recovery industries.

Statements in this report that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties, which could cause actual results to vary considerably from these statements. Readers are cautioned not to put undue reliance on forward-looking statements. See Forward-Looking Information and Statements herein.

Information related to the Company is available for view on SEDAR at www.sedar.comand more information is also available on the Company's website at www.EnviroMetal.com.

Corporate Overview

EnviroMetal develops and markets technologies for the extraction of precious and other valuable metals from mine products and electronic waste (E-waste) in a safe, environmentally friendly, and sustainable manner. The Company's technology is appliable in the mining industry to recover gold from ores and concentrates, and in E-waste processing industry to recover gold and other valuable metals primarily from printed circuit board assemblies (PCBA). The Company is seeking opportunities to license its technology to companies in the mining and E-waste industries.

EnviroMetal's patented metal recovery technology (EnviroMetal Process) is similar to other leaching processes for gold recovery, but the Company's proprietary lixiviant and unique process eliminates the use of toxic leaching agents such as sodium cyanide and strong acids and significantly reduces water consumption. EnviroMetal's metal recovery technology targets industry participants seeking an on site processing solution with low logistics and third-party costs and a reduced environmental impact.

The Company's patented metal recovery technology creates strong differentiation in the marketplace and pending and awarded patents combined with the process knowledge required for use and site optimization create significant barriers for competitors to overcome. The EnviroMetal Process is cost competitive, safe, sustainable, and holds potential for multiple revenue streams.

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EnviroMetal Technologies Inc.

Management Discussion and Analysis

For the three and nine-month periods ended September 30, 2022 and 2021

2. OVERALL PERFORMANCE AND OPERATIONS

During the period ended September 30, 2022, the Company continued to develop commercial relationships in the primary and secondary metals industries. In the primary metals industry, the Company is focussed on opportunities to recover gold from concentrates and ores. In the secondary metals industry, the focus is the recovery of gold and other metals from electronic waste.

During the period, Company management conducted a review of market positioning and business opportunities for the EnviroMetal Process within the mining and E-waste processing industries. Based on this review the Company has undertaken the following initiatives:

• Focus on developing a high margin business by licensing the EnviroMetal Process to gold miners;
• Shift the Company's E-waste business strategy from processing material sourced from outside suppliers to providing technology and related services to E-waste processors; and
• Restructure operations to align with the Company's new positioning within the mining and E-waste industries.

Gold Mining

The EnviroMetal Process is the foundation of the Company's technology licensing business model. It provides miners a simple, on-site gold recovery solution without the necessity for sodium cyanide or smelting. The EnviroMetal Process incorporates proven technologies in a novel manner to address real challenges facing miners seeking to maximize return on investment while meeting environmental, social, and corporate governance obligations and goals.

During the quarter ended September 30, 2022, EnviroMetal conducted amenability and recovery test work on a variety of samples received from numerous clients and suppliers. The results of these tests further confirmed the EnviroMetal Process in most cases offers similar or superior leach kinetics (speed) and gold recoveries when compared to sodium cyanide.

In August and September, the Company conducted a series of controlled tests designed to establish base case lixiviant consumption and associated per tonne operating costs using the EnviroMetal Process. Additional work to expand on the base case data and establish operating costs under different processing scenarios has been initiated. Base case operating costs are a key consideration for miners in evaluating processing options and establishing this key metric represents a significant milestone in the commercialization of the EnviroMetal Process.

EnviroMetal continues to develop relationships with mining companies and other mining related entities in pursuit of licensing opportunities. For miners, the selection of a metal recovery technology is dependent on many factors including total metal recovery, capital costs, operating costs, permitting, site suitability, reliability, ease of use, industry standards and sustainability. As is the case with any metallurgical process, prior to adoption for use the processing technology must go through a series of progressive tests from lab through pilot scale in order to ensure the compatibility of the technology with the material to be processed. The Company has identified a number of potential licensees, based on material type and project specific criteria, and has initiated metallurgical test work for or entered into discussions with several of them. During the period ended September 30, 2022, EnviroMetal conducted lab and pilot scale work for several mining clients and recognized revenues of $81,648 related to this work.

E-waste Processing

Factors largely outside EnviroMetal's control, including local and international logistics delays, increased shipping costs, declining E-wasterecycling levels, a shift to asset destruction or refurbishment for high-grade E-waste,programs and Page | 3

EnviroMetal Technologies Inc.

Management Discussion and Analysis

For the three and nine-month periods ended September 30, 2022 and 2021

policies which encourage the shredding and smelting of E-waste, increasing competition from foreign smelters, and inconsistent industry regulation and enforcement have negatively impacted Company's ability to establish a reliable and economic E-waste supply.

In response to the ongoing challenges in the E-waste industry the Company has shifted its E-waste strategy from material processing to consulting and potentially licensing intellectual property to existing and new E-waste processors. EnviroMetal believes this new strategy presents several advantages:

• It is less capital intensive and offer the potential for significantly higher operating margins;
• It allows the Company to focus most of its resources on the much larger gold mining market; and
• It aligns closely with the strategy for technology deployment in the gold mining industry.

Restructuring Operations

In July, the Company relocated its corporate headquarters in Burnaby, British Columbia, Canada. The new location includes expanded laboratory facilities, offices, warehousing, and space to accommodate a pilot plant for processing mining and E- waste concentrates within a lower cost footprint. To streamline research and development and consulting work for clients EnviroMetal will relocate its existing mining pilot plant and related equipment from its current location at the Company's EnviroCircuit facility to the new headquarters location once currently scheduled programs have been completed.

As part of the Company's shift in E-waste strategy EnviroMetal intends to close its EnviroCircuit E-waste processing division. The Company expects to fulfill all existing commitments to E-waste clients and complete any planned E-waste related research and development work prior to the end of 2022. The Company anticipates liquidating any surplus E-waste processing equipment prior to the end of June 2023, the end of the existing lease on the EnviroCircuit facility.

Other Material Processing

In 2021, the Company entered into an agreement with Ocean Partners USA Inc., an affiliate of Ocean Partners Holdings Limited pursuant to which EnviroMetal would recover gold from gold mine materials produced by Ocean Partner's clients. On December 31, 2021, the Company held in inventory material from Ocean Partners clients with an estimated value of $3,441,965. During the period ended June 30, 2022, the Company processed the material and recovered over 1,440 troy ounces of gold recognizing related revenues of $3,463,259 and material costs of $3,389,518.

The Company does not currently plan to pursue any further one off or custom processing opportunities, and instead will focus on pursuing direct licensing opportunities with mining clients.

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EnviroMetal Technologies Inc.

Management Discussion and Analysis

For the three and nine-month periods ended September 30, 2022 and 2021

3. SUMMARY OF QUARTERLY RESULTS

The following summarized financial data has been prepared in accordance with IFRS. This data should be read in conjunction with the Company's interim financial statements, and it consolidated annual financial statements for the respective periods. All net loss figures in the table are presented in Canadian dollars, the Company's functional currency.

The Company has yet to achieve consistent revenues from consulting and licensing activities or material processing, and therefore has un-predictable cashflows from these activities. Although EnviroMetal continues to pursue E-waste consulting and licensing opportunities the Company's primary focus is on mining related activities where projected margins are substantially higher, and risks are lower. EnviroMetal believes it will achieve consistent and increasing revenue over time by providing technical solutions which allow clients to unlock additional value in their operations.

4. OPERATIONAL RESULTS FOR THE PERIOD

The following table summarizes the Company's revenues and expenses for the three and nine-month periods ended September 30, 2022 and 2021:

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