Grosvenor Resource : MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended August 31, 2022

MANAGEMENT'S DISCUSSION & ANALYSIS

For the year ended August 31, 2022

This management's discussion and analysis of financial position and results of operations ("MD&A") is prepared as at December 6, 2022 and should be read in conjunction with the audited financial statements for the year ended August 31, 2022 of Grosvenor Resource Corporation ("Grosvenor" or the "Company") with the related notes thereto. The audited financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"). All amounts are expressed in Canadian dollars unless otherwise indicated.

Management is responsible for the preparation and integrity of the annual financial statements, including the maintenance of appropriate information systems, procedures and internal controls. Management is also responsible for ensuring that information disclosed externally, including the financial statements and MD&A, is complete and reliable.

Additional information on the Company is available for viewing on SEDAR at www.sedar.comor by contacting the Company's head office at Suite 202-2168 Marine Drive, West Vancouver BC, Canada V7V 1K3. The Company's website is www.gvrresource.com.

Description of Business

Grosvenor is a natural resource company engaged in the acquisition and exploration of resource properties. The Company's head office is located in Vancouver, British Columbia. The Company is a reporting issuer in British Columbia, Alberta, Ontario and Nova Scotia. Grosvenor trades on the TSX Venture Exchange ("TSX-V") under the symbol GVR.

World Evens - Impact on the Business

In March 2020, the World Health Organization declared a global pandemic related to COVID-19. The current and expected impacts on global commerce are anticipated to be far reaching. To date there has been significant volatility in the stock market and in commodity and foreign exchange markets.

The impact of the Coronavirus (COVID-19) pandemic is ongoing and while there has been no significant financial impact for the Company as at the approval date of these financial statements, it is not possible to estimate the potential impact, positive or negative, on future periods.

In March 2022, the Russian-Ukrainian conflict proceeded to further disrupt the world, leading to additional volatility in commodity and foreign exchange markets. There is no known end to this conflict and a potential impact on future periods cannot be predicted.

Overview

Powder

In 2018, the Company acquired a 100% interest in the Powder gold-silver property for $7,500 and 50,000 of its common shares (valued at $8,500). Additionally, to date, the Company has paid a total of $25,134 in claim maintenance. The property is subject to a 1% NSR.

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Selected Annual Information
		2022		2021		2020
Exploration and evaluation
asset	$	41,134	$	35,787	$	30,438
Total assets		3,623,406		3,943,838		3,580,427
Current liabilities		28,167		26,004		27,561
Income (loss) for the year		(63,977)		129,861		177,721
Comprehensive income (loss)
for the year		(322,595)		364,968		412,828
Earnings (loss) per share		(0.00)		0.00		0.01

Results of Operations

During the year ended August 31, 2022 ("current year"), the Company recorded a loss of $63,977 compared to net income of $129,861 for the year ended August 31, 2021 ("comparative year"). The significant changes are as follows:

• The Company recorded dividend income of $326,160, compared to $434,880 during the comparative year.
• The Company recorded an income tax expense of $40,362, compared to a recovery of $36,693 during the comparative year.

Fourth Quarter Results

During the three months ended August 31, 2022 ("current period"), the Company recorded a loss of $76,859 compared to net income of $37,640 for the three months ended August 31, 2021 ("comparative period"). The significant changes during the current period compared to the comparative period, are as follows:

• The Company recorded dividend income of $54,360, compared to $108,720 during the comparative period.
• The Company recorded a deferred tax expense of $40,362, compared to a recovery of $117,554 during the comparative period.

Liquidity and Capital Resources

The Company's working capital position at August 31, 2022 was $3,554,105 compared to a working capital position of $3,882,047 at August 31, 2021. The decrease in working capital is the decrease in the deemed fair value of marketable securities held by the Company.

As at August 31, 2022, the Company had current assets of $3,582,272 (2021 - $3,908,051), total assets of $3,623,406 (2021 - $3,943,838) and total liabilities of $28,167 (2021 - $26,004). At August 31, 2022, the Company had no long-term debt outstanding. There are no known trends in the Company's liquidity or capital resources.

The Company finances its operations through dividend income. The Company currently has cash and equivalents, marketable securities and short term investments totaling $3,508,142 and net

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working capital of $3,554,105 which, the Company believes, is sufficient to fund its current operations in the foreseeable future. In the longer term, additional equity or debt financing may be necessary to fund exploration, general and administrative activities.

Commitments

Grosvenor has management and consulting contracts with Ian Rozier, a director and Chief Executive Officer, and a company controlled by Tyler Friesen, a director and Chief Financial Officer. The parties are paid a combined total of $14,000 per month and the contracts remain in force on a continuous basis but can be terminated by Grosvenor with three months written notice. If Grosvenor terminates services of either or both parties without cause, Grosvenor will be obligated to pay 36 months of service fees to Ian Rozier, and 12 months of service fees to the company controlled by Tyler Friesen.

Effective January 1, 2018, the Company entered into a consulting contract with Prospect Point Consulting Ltd. to provide corporate consulting services for Grosvenor at $7,000 per month. The contract remains in force on a continuous basis but can be terminated by Grosvenor with three months written notice. If Grosvenor terminates the services of the company without cause, it will be obligated to pay 24 months services fees to the company.

The following table sets forth selected unaudited financial information prepared by management of the Company:

	Three Months		Three Months		Three Months		Three Months
		Ended		Ended		Ended		Ended
		August 31,		May 31,		February 28,	November 30,
		2022		2022		2022		2021
Total assets	$	3,623,406	$	3,934,868	$	3,982,141	$	3,972,694
Working capital		3,554,105		3,894,429		3,924,056		3,910,680
Income (loss) for the period		(76,859)		12,882		(30,610)		28,632
Comprehensive income (loss) for the period		(335,477)		12,882		16,411		28,632
Earnings (loss) per share		(0.00)		0.00		(0.00)		0.00

		Three Months		Three Months		Three Months		Three Months
		Ended		Ended		Ended		Ended
		August 31,		May 31,		February 28,	November 30,
		2021		2021		2021		2020
Total assets	$	3,943,838	$	3,769,213	$	4,315,021	$	4,026,204
Working capital		3,882,047		3,733,702		4,272,052		3,986,508
Income (loss) for the period		37,640		(44,624)		3,915		134,930
Comprehensive income (loss) for the period		155,194		(538,350)		286,044		464,080
Earnings (loss) per share		0.00		(0.00)		0.00		0.01

Period to period changes to income tax expense/recovery and unrealized gain/loss on marketable securities relate to the share value of the Company's Newport shareholdings.

During the three months ended August 31, 2022, the Company recorded dividend income of $54,360.

During the three months ended May 31, 2022, the Company recorded dividend income of $108,720.

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During the three months ended August 31, 2022, the Company recorded dividend income of $54,360.

During the three months ended February 28, 2022, the Company recorded dividend income of $54,360.

During the three months ended November 30, 2021, the Company recorded dividend income of $108,720.

During the three months ended August 31, 2021, the Company recorded dividend income of $108,720.

During the three months ended May 31, 2021, the Company recorded dividend income of $108,720.

During the three months ended February 28, 2021, the Company recorded dividend income of $54,360.

During the three months ended November 30, 2020, the Company recorded dividend income of $163,080.

Related Party Transactions

During the year ended August 31, 2022, the Company entered into the following transactions with related parties:

1. Paid or accrued management fees of $32,000 (2021 - $96,000) to a company controlled by Ian Rozier, CEO and director of the Company.
2. Paid or accrued management fees of $64,000 (2021 - $Nil) to Ian Rozier, CEO & director of the Company.
3. Paid or accrued directors fees of $12,000 (2021- $12,000) to Douglas B. Hyndman, a director of the Company.
4. Paid or accrued directors fees of $12,000 (2021 - $12,000) to Douglas Scheving, a director of the Company.
5. Paid professional fees of $72,000 (2021 - $72,000) to a company controlled by Tyler Friesen, the CFO of the Company.

The following amounts, with respect to the above transactions, are owing to related parties as at August 31, 2022:

1. $2,000 (2021 - $2,000) to Douglas Scheving, a director of the Company
2. $2,000 (2021 - $2,000) to Douglas B. Hyndman, a director of the Company

These amounts are non-interest bearing, unsecured and paid in the ordinary course of business.

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Key management includes directors, executive officers and officers of the Company. The Company paid or accrued fees to management or companies controlled by key management as follows:

		August 31,		August 31,
		2022		2021
Management fees	$	96,000	$	96,000
Professional fees	$	72,000	$	72,000

During the year ended August 31, 2022, the Company reimbursed at cost, rent expense of $5,000 (2021 - $12,000) to a company controlled by Ian Rozier, CEO and director of the Company. Additionally, the Company reimbursed rent of $7,000 (2021 - $Nil), to a company with a director and officer in common.

Financial and Capital Risk Management

Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.

The carrying value of cash and equivalents, receivables and accounts payable and accrued liabilities approximate their fair value because of the short-term nature of these instruments. The fair value of short term investments and marketable securities was $3,079,469 at August 31, 2022 (2021 - $2,471,200), which are level 1 fair value measurements.

Financial Risk Factors

The Company's Board of Directors has the overall responsibility for the establishment and oversight of the Company's risk management framework.

The Company is exposed in varying degrees to a variety of financial instrument related risks and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

Credit risk

Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations. The Company's credit risk is primarily attributable to cash and equivalents, short-term investments and marketable securities, the carrying value totalling $3,508,142, represents the Company's maximum exposure to credit risk. Management believes that the credit risk concentration with respect to financial instruments is remote because cash and equivalents and short-term investments are held with reputable Canadian financial institutions. Receivables consist mainly of GST and interest. The Company does not consider any of its current receivables past due. The Company believes any credit risk associated with its receivables is low due to the historical success of collecting receivables