MANAGEMENT S DISCUSSION AND ANALYSIS OF THE COMPANY S FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE YEAR ENDED FEBRUARY 29, 2016

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1 OF THE COMPANY S FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE YEAR ENDED FEBRUARY 29, 2016 THIS MD&A IS DATED JUNE 14, 2016

2 This Management s Discussion and Analysis ( MD&A ) should be read in conjunction with Barkerville Gold Mines ( Barkerville, the Company, we, or our ) consolidated financial statements for the year ended February 29, 2016 and the related notes thereto, which have been prepared in accordance with International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Board ( IASB ). All figures are in Canadian dollars unless otherwise noted. The Management Discussion and Analysis has been prepared as of June 14, 2016 and includes certain statements that may be deemed forward-looking statements. Investors are directed to the section Forward Looking Statements included within this MD&A. Forward Looking Statements This Management s Discussion and Analysis ( MD&A ) contains certain statements that may be deemed forwardlooking statements, within the meaning of certain securities laws. Forward-looking statements relate to management s expectations or beliefs about future performance, events, or circumstances that include, but are not limited to, future production, costs of production, prices of gold, reserve or resource potential, exploration and operational activities, and events or developments that the Company expects or targets. Forward-looking statements can usually be identified by words such as: future, plans, scheduled, expects, intends, estimates, forecasts, will, may, could, would, and variations thereof. Although the Company believes that these statements are based on reasonable assumptions, all forward-looking statements involve known and unknown risks and uncertainties that may cause the actual performance, events, or circumstances of the Company to be materially different than anticipated. The forward-looking information in this MD&A describes the Company s expectations as of the date of this MD&A. The results or events anticipated or predicted in such forward-looking information may differ materially from actual results or events. The Company and its operations are also subject to a large number of risks, including: the Company s liquidity and financing capability, fluctuations in gold prices, market conditions, results of current exploration activities, the possibility of a labour stoppage or shortage, delays in obtaining government permits and approvals and such other risks as discussed herein and in other publicly filed disclosure documents. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in such forward-looking statements, there may be other factors that cause performance, events, or circumstances to differ materially from those described in forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate. Accordingly, readers should not try to place undue reliance on forward-looking statements contained in this MD&A. The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the Company s forward-looking information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. Forward-looking statements are based on management s current plans, estimates, projections, beliefs, and opinions and we do not undertake any obligation to update forward-looking statements should the assumptions related to these plans, estimates, projections, beliefs and opinions change, except as required by law. About Barkerville Barkerville Gold Mines Ltd. is engaged in the exploration and production of mineral properties located in the Cariboo Mining District in east-central British Columbia. The Company controls 117,442 hectares of mineral tenure, including three historic groups of contiguous Crown-Granted mineral claims, namely the Cariboo Group, Island Mountain Group, and Mosquito Creek Group, as well as a large block of mainly contiguous mineral tenures roughly centered around the Town of Wells, which is located approximately 85 km east of Quesnel, British Columbia. The Company s QR Mine & Mill is located approximately 58 km southeast of Quesnel, in the Cariboo Mining District, and is in close proximity to the Company s other mineral tenures. The mineral tenures cover 1,164 km 2 along a strike length of 60 km and approximate 2

3 width of 20 km, encompassing seven past producing hard rock mines, including the QR Mine & Mill. The Cariboo Gold Belt has had a rich and extensive history starting with the discovery of placer gold in the 1860 s. Recorded production from the Company s property and surrounding area is approximately 2.6 million ounces of placer gold and 1.2 million ounces of lode gold averaging 0.40 oz/t gold from mainly mesothermal quartz vein mineralization, and 0.60 oz/t from sulphide replacement style mineralization, during the period 1933 to Highlights Bonanza Ledge Mine Project During the year ended February 29, 2016: Total sales for the year ended February 29, 2016 were 8,976 ounces of gold at an average price of $1,470 per ounce (year ended February 28, ,865 ounces of gold at an average price of $1,423 per ounce). The Company ceased mining operations during the year ended February 28, 2015, as such, no mining operations took place in the period. The Company milled 11,275 (2015: 80,214) dry metric tonnes of Bonanza ledge ore at an average head grade of (2015: 8.4) grams per metric tonne at 94% (2015: 92%) recovery at an average net operating cost of production at $1,067 (2015: $1,278) per ounce and all in cost of $3,022 (2015: $1,604) per ounce; As the majority of the revenue from fiscal 2016 resulted from the clean out of the mining processing plant, the Company did not incur many of its active cost of production when fully operational which resulted in a higher gross margin for the period. QR Mine Project During the year ended February 29, 2016 the Company did not mine the QR Project. In the comparative year ended February 28, 2015, highlights were as follows: Total sales for the year ended February 28, 2015 were 5,094 ounces of gold at an average price of $1,411 per ounce. Of 5,094 ounces, 2,000 ounces were recovered from QR s previous production screen meshes. The Company milled 21,007 metric tonnes of QR mine ore at an average grade of 5.04 grams per metric tonne with a 68% recovery and at an average net operating cost of production of $1,243 per ounce and all in cost of $1,590 per ounce. The table below summarizes operating activities for the years ended February 29, 2016 and February 28, 2015: 3

4 Financial Data 12 months 12 months February 29, 2016 February 28, 2015 Bonanza Ledge QR Bonanza Ledge QR Revenues $ 13,192,311 $ - $ 24,001,982 $ 7,199,983 Gain (Loss) from mining operations 3,618,565-2,271, ,818 Operating Data Tons mined (mt) - - 1,148,470 - Tons milled (dmt) 11,275-80,214 21,007 Strip ratio NA NA NA Grade (g Au/mt) NA Recovery 94% NA 92% 68% Average price $ 1,470 NA $ 1,423 $ 1,411 Operating costs of production Per Ozs $ 1,067 - $ 1,278 $ 1,243 All In Costs Per Ozs $ 3,022 $ - $ 1,604 $ 1,590 Net Operating costs of production Cost of Sales $ 4,934,669 $ - $ 19,848,785 $ 3,818,643 Mine operating expenses overhead 4,639,077-1,711,866 2,514,602 Total operating costs of production 9,573,746-21,560,651 6,333,245 Total gold sold (ozs) 8,976-16,865 5,094 Operating costs of production Per Ozs $ 1,067 $ - $ 1,278 $ 1,243 All In costs Net operating costs of production $ 9,573,746 $ - $ 21,560,651 $ 6,333,245 Corporate Administration 5,808,646-2,713, ,041 Exploration 11,743,006-2,784,819 1,013,996 Total All In Costs 27,125,398-27,058,897 8,098,282 Total gold sold (ozs) 8,976-16,865 5,094 All In Costs per Ozs $ 3,022 $ - $ 1,604 $ 1,590 Notes: 1. Tons mined include waste and ore 2. Net Operating Costs and All-in costs includes Depletion & Depreciation Review of Operations Mining operations were completed in March 2015 and the balance of ore was shipped to the QR Mill and processed. The average grade of the 11,275 tons milled was g/mt for a total 8,976 oz gold. A program to clean the mill prior to putting the facility on care and maintenance allowed the Company to produce additional gold from material caught in the mill circuit and floor. Repairs and upgrades to the mill and a general clean up were performed in May Additional maintenance is underway to prepare the mill for future production. The company commissioned JDS Energy and Mining to undertake an optimization study on the potential of additional mining of the BL deposit from both an underground and open pit scenario. The results of this study was delivered in mid July. Results indicate that the open pit scenario appears more attractive than underground option in terms of project complexity, cash flow and capital cost. This is not the case at this time, new studies performed by Osisko Mining Services and Innovexplo in early 2016 inidcate that underground mining would have better returns and a significantly less environmental impact. 4

5 On April 26, 2016, the Company completed a flow through financing in the amount of $15,528,450 to fund an extensive exploration program to develop additional resources and evaluate the entire Barkerville land package. The scope of the drilling program is to test the potential of the BC vein structure for continuity and grade as well as investigating and exploring the area for parallel veins or additional sulphide replacement ore bodies similar to Bananza Ledge. Additional targets for near surface high grade pits potentially representing future mill feed are also being developed. Regional studies are also underway to determine the potential and structural controls of the mineralization within the belt. A program of reclamation and remediation has been initiated at the QR mine and mill sight which involves planting of trees and grass seed and environmental monitoring. The Mosquito Creek Mine and Mill are being dismantled and all dilapidated historical structures removed. During the forth quarter of 2016, drilling continued to test the mineralization within the BC Vein and subsidiary veins discovered parallel and sub parallel to the structure. The resources being developed from the current drill program are being refined to complement the balance of ore that remains in the Bonanza Ledge Deposit. Due to its relative proximity to Bananza Ledge, a new mine plan is being formulated which may incorporate both underground and open pit extraction of ore to be shipped to the QR Mill in the fourth quarter of Amendments to the current mining permits will be filed as soon as the mine plan is complete. The QR Mill remained on care and maintenance with additional upgrades and inspections performed through the end of the third quarter. A survey of the tailings facility at the QR Mill Site verified capacity of approximately 900,000 tonnes which will be adequate for approximately twelve years at the current permitted mine production of 75,000 tonnes per year. The Company is currently amending its existing permit to increase mine capacity. The Environmental Department continued with a program of remediation, cleaning historic production sites and monitoring water discharge and tailings facilities. Accumulated sediment in the settling pond was dredged and removed at the Bonanza Ledge Mine. Blue Collar Silvaculture in conjunction with a First Nations project completed a tree planting program to rehabilitate a portion of the QR Mill Site. A cariboo mitigation plan was submitted to the provincial ministry of Forests Lands and Natural Resources. A fish study was delivered to the federal department of Metal Mines Effluent Regulations. Results of Operations Three Months Ended February 29, 2016 compared to the Three Months ended February 28, 2015: The Company reports a net loss of $1,267,135 during the three month period ended February 29, 2016 as compared to a net loss of $9,567,886 during the three month period ended February 28, Overall, this represents a lower net loss of $8,300,751. The variances between the two periods were primarily due to the following items: (i) Decrease of $8,055,323 in mine operating loss from an income of $6,357,556 during the three month period ended February 28, 2015 to a loss of $1,697,767 during the three month period ended February 29, The Company did not have any gold sales during the three month period ended February 29, 2016, as compared to the prior year when the Company sold 6,896 ounces at an average price of $1,502, totalling gold revenues of $10,359,618). The Company ceased milling operations in February 2015, as such, the Company did not record any revenue in the three month period ended February 29, 2016 and incurred $1,697,767 in mine operating costs which represent care and maintenance costs on the mine. In the comparable period, cost of sales and direct costs were $5,530,972 on sales of $10,359,618 for the three month period ended February 28, Mine operating expenses increased from $220,702 during the three month period ended February 28, 2015 to $1,697,767 for the three month period ended February 29, The increase is due to increases in salaries and benefits as the Company keeps the property in good standing under care and maintenance as well as the revised estimate on the mine closure plan which resulted in and increase in costs to $752,765 for the three month period ended February 29, 2016 (2015: $nil). (ii) Increase of $3,976,219 in exploration expenses from $959,030 during the three month period ended February 28, 2015 to $4,935,249 during the three month period ended February 29, The increase is due primarily to a drill program initiated in the later part of the second quarter of fiscal 2016 and continuing into the third 5

6 and fourth quarters, with the fourth quarter resuling in expenditures of $1,966,391 as compared to $nil in the comparable period. Employee salaries and benefits increased in correlation with the exploration program increasing from $227,880 during the three month period ended February 28, 2015 to $522,746 during the three month period ended February 29, Similarly, administration expenditures also increased from $12,528 during the three month period ended February 28, 2015 to $368,719 during the three month period ended February 29, 2016 and assaying costs increased from $104,426 during the three month period ended February 28, 2015 to $643,282 during the three month period ended February 29, 2016 as these costs supporting the exploration program increased. The Company also incurred a charge of $891,031 (2015: $nil) in connection with the revised estimate on the mine closure plan. (iii) Increase of $519,481 in corporate administration from $1,143,307 during the three month period ended February 28, 2015 to $1,662,788 during the three month period ended February 29, This increase was primarily due to an increase in legal, audit and accounting costs of $796,358 during the three month period ended February 29, 2016 compared to $330,969 during the comparable period. The increase is due to legal fees associated with the lawsuit brought against the Company by a former investor. This increase was also due to stock based compensation expense of $101,900 during the three month period ended February 29, 2016 compared to $nil during the three month period ended February 28, See note 19(b) of the audited consolidated financial statements for the years ended February 29, 2016 for details on options issued during the periods. (iv) Decrease of $1,748,323 in finance expense from $1,819,842 during the three month period ended February 28, 2015 to $71,519 during the three month period ended February 29, The decrease is due to a decrease in interest costs related to the gold loan facility that was settled on July 14, 2015 as detailed under point (ii) of Liquidity and Capital Resources. (v) The Company recorded impairment of $10,802,324 on Bonanza Ledge Mine and QR Mill and Equipment during the year ended February 28, The impairment charge was a consequence of putting Bonanza Ledge under Care and Maintenance. During the year ended February 29, 2016 the Company similarly incurred an impairment charge of $669,450. (vi) The Company recorded a gain on sale of NSR of $5,926,519 during the three month period ended February 29, 2016 (2015:$nil). This gain is related to the sale of a 1.5% net smelter return ( NSR ) royalty on the Cariboo Gold Project for a cash consideration of $25,000,0000 to Osisko Gold Royalties Ltd as described in note 14 of the audited consolidated financial statemenst for the years ended February 29, 2016 and February 28, Year Ended February 29, 2016 compared to the Year ended February 28, 2015: The Company reports a net loss of $8,059,974 during the year ended February 29, 2016 as compared to a net loss of $21,307,854 during the year ended February 28, Overall, this represents a decrease in net loss of $13,247,880. The variances between the two periods were primarily due to the following items: (i) Increase of $310,496 in mine operating income from an income of $3,308,069 during the year ended February 28, 2015 to an income of $3,618,565 during the year ended February 29, The Company sold 8,976 ounces at an average price per ounce of $1,470 for the year ended February 29, 2016, totalling $13,192,311 in revenue. (Prior year, the Company sold 21,959 ounces at an average price of $1,421, totalling gold revenues of $31,201,965). The Company ceased milling operations in February 2015, as such, recoveries during year ended February 29, 2016 carried a lower cost then the comparable quarter when milling operations were ongoing, with cost of sales and direct costs decreasing from $23,667,428 for the year ended February 28, 2015 to $4,934,669 for the year ended February 29, 2016, while sales decreased from $31,201,965 for the year ended February 28, 2015 to $13,192,311 for the year ended February 29, As the majority of the revenue from fiscal 2016 resulted from the clean out of the mining processing plant, the Company did not incur many of its active cost of production when fully operational. Furthermore, mine operating costs decreased as mining operations were ceased in February 2015 and thus, various costs decreased as follows: 6

7 Reclamation costs decreased from $1,418,411 during the year ended February 28, 2015 to $290,868 for the year ended February 29, As the mining operations were put in care and maintenance the Company did not incur significant costs on reclamation work, whereas during the comparable period, the Company was actively mining and incurred significant reclamation costs, in particular incurring significant costs related to raising the tailings dam at its QR project. Consulting expenses also decreased as the Company used less consultants as mining operations ceased, decreasing from $292,525 during the year ended February 28, 2015 to $78,257 for the year ended February 29, These decreases were offset by increases in the following: Environmental expenses increased from $367,391 during the year ended February 28, 2015 to $863,292 for the year ended February 29, Environmental expenses were higher during the current period because the Company has engaged several consultants to work around new baseline studies on the Bonanza Ledge amendment work; in addition the Company has conducted the necessary work to meet all environmental monitoring requirements for all sites. Stock-based compensation increased from $nil during the year ended February 28, 2015 to $191,100 for the year ended February 29, Stock-based compensation varies based on the number of options issued during the year and the associated Black-Scholes valuation. See note 19 of the audited consolidated financial statements for the years ended February 29, 2016 and February 28, 2015 for details. During the year ended February 29, 2016, the Company incurred a charge of $752,765 (2015: $nil) in connection with the revised estimate on the mine closure plan. (vii) Increase of $7,944,191 in Exploration from $3,798,815 during the year ended February 28, 2015 to $11,743,006 during the year ended February 29, This fluctuation is primarily due to an increase in drilling expenses from $448,007 during the year ended February 28, 2015 to $6,137,256 during the year ended February 29, The increase in drilling costs is due to the Company s exploration program to define and expand its resource estimate which is being funded through the recently completed flow through private placements, see note 19(a) of the audited consolidated financial statements for the three and years ended February 29, 2016 and February 28, 2015 for details. The Company also incurred increases in administration costs which increased from $156,827 during the year ended February 28, 2015 to $1,273,607 for the during the year ended February 29, This reflected costs incurred for exploration software and supporting activities to the fiscal 2016 exploration program which is underway, as well as increases in salaries and benefits which increased from $789,079 during the year ended February 28, 2015 to $1,740,466 during the year ended February 29, 2016 and increased in relation to labour incurred on the exploration drilling program. This increase was offset by a recovery of exploration expenditures (Mining Exploration Tax Credit) of $1,471,961 (2015: $nil) which was received during the year ended February 29, The Company also incurred a charge of $891,031 (2015: $nil) in connection with the revised estimate on the mine closure plan. (ii) Increase of $2,344,178 in corporate administration from $3,464,468 during the year ended February 28, 2015 to $5,808,646 during the year ended February 29, This increase was primarily due to stock based compensation expense of $2,061,300 during the year ended February 29, 2016 compared to $nil during the year ended February 28, See note 19(b) of the audited consolidated financial statements for the years ended February 29, 2016 and February 28, 2015 for details on options issued during the periods. (iii) (iv) (vi) Decrease of $4,622,415 in finance expense from $6,496,239 during the year ended February 28, 2015 to $1,873,824 during the year ended February 29, The decrease is due to a decrease in interest costs related to the gold loan facility that was settled on July 14, 2015 as detailed above. The settlement also resulted in a gain of $798,069 ( $nil). Decrease of $454,227 in the loss in regards to the change in value of the derivative liability in the gold loan which went from a loss of $814,779 during the year ended February 28, 2015 to a loss of $360,552 during the year ended February 29, The Company recorded impairment of $10,802,324 on Bonanza Ledge Mine and QR Mill and Equipment during 7

8 the year ended February 28, The impairment charge was a consequence of putting Bonanza Ledge under Care and Maintenance. During the year ended February 29, 2016 the Company similarly incurred an impairment charge of $669,450. (vii) The Company recorded a gain on sale of NSR of $5,926,519 during the year ended February 29, 2016 (2015:$nil). This gain is related to the sale of a 1.5% net smelter return ( NSR ) royalty on the Cariboo Gold Project for a cash consideration of $25,000,0000 to Osisko Gold Royalties Ltd as described in note 14 of the audited consolidated financial statemenst for the years ended February 29, 2016 and February 28, Selected Annual Information The following table highlights financial data on the Company for the most recently completed three financial years. Fiscal year ended 29-Feb Feb Feb-14 Revenue $13,192,311 $31,201,965 $36,788 Net loss ($8,059,974) ($21,307,854) ($12,703,957) Loss per share (0.04) (0.17) (0.12) Total assets $46,759,774 $39,697,256 $44,722,214 Total liabilities $11,419,807 $38,559,010 $30,426,090 Working capital (deficiency) 27,863,598 ($26,022,817) ($17,973,355) Summary of Quarterly Results The following table sets out selected quarterly unaudited consolidated financial information of the Company and is derived from unaudited condensed consolidated interim financial statements prepared by the Company s management. IFRS Period ended 29-Feb Nov Aug May Feb Nov-14 Aug 31/14 31-May-14 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Total Revenue ,755 12,605,556 10,359,618 11,494,915 6,683,195 2,664,237 Income (loss) before income taxes (3,099,235) (7,426,418) (5,053,206) 5,652,585 (10,497,886) (4,273,009) (3,193,835) (4,273,124) Net income (loss) (1,267,135) (7,417,318) (5,044,106) 5,668,585 (9,567,886) (4,273,009) (3,193,835) (4,273,124) Basic income (loss) per Share (0.02) (0.03) (0.03) 0.04 (0.08) (0.03) (0.03) (0.03) Diluted income (loss) per Share (0.02) (0.03) (0.03) 0.04 (0.08) (0.03) (0.03) (0.03) See Results from Operations for discussion of results. Liquidity and Capital Resources On February 29, 2016, the Company had cash and cash equivalents on hand of $25,090,664 (February 28, 2015: $476,958) and had a working capital of $27,863,598 (February 28, 2015: working capital deficit of $26,022,817). The Company s major commitments over the next year are repayment of trade and other payables, and amounts due to related parties, as well as meeting its flow-through expenditure commitments as described in Note 30 of the audited consolidated financial statements for the years ended February and February 28, The Company will rely on future equity financings to fund operations. Is not possible to predict whether financing efforts will be successful. The Company has no assurance that additional funding will be available for further development of its projects. Any additional funding will be dependent upon the Company s ability to obtain financing through joint ventures, equity or debt financing or other means. Although the Company has been successful in the past in obtaining financing through the sale of equity securities and other means, there can be no assurance that the 8

9 Company will be able to obtain adequate financing in the future or that the terms of such financing will be favourable. Failure to obtain such additional financing could result in delay or indefinite postponement of further business advancements. Recent financing developments are set out below: (i) (ii) On June 17, 2015, the Company entered into a debt settlement agreement with an arm s length creditor, pursuant to which the Company has settled an aggregate of $118,201 of indebtedness through the issuance of an aggregate of 422,148 common shares. The Company completed the debt settlement of penalty interest relating to the gold loan (see note 17 of the audited consolidated financial statements for the years ended February 29, 2016 and February 28, 2015). Under the debt settlement, the Company issued an aggregate of 3,015,039 common shares with a fair value of $783,910 ($0.26 per share) for settlement of penalty interest payable totalling $934,662 resulting in a gain on settlement of $150,752 which was recognized in income and other comprehensive income. (iii) On June 22, 2015 the Company issued an aggregate 6,250,000 flow through common shares at a price of $0.32 per common share, for gross proceeds of $2,000,000. (iv) (v) (vi) (vii) (viii) (ix) On June 29, 2015, the Company completed a private placement of 6,059,375 flow through units at a price of $0.32 per flow through unit for gross proceeds of $1,939,000. Each flow through unit consists of one common share and one half of one common share purchase warrant with each warrant entitling the holder thereof to purchase a common share at a price of $0.40 until December 29, The Company paid the agent a cash commission of 6% of the gross proceeds of the offering and issued 363,563 broker warrant with each broker warrant entitling the agent to purchase one common share at a price of $0.32 until December 29, On July 14, 2015, the Company settled the balance of the gold loan facility with Ontario Ltd., a company controlled by Mr. Eric Sprott, through the issuance of an aggregate of 74,885,900 common shares of the Company at a price of $0.27 per common share. As a result of the Debt Settlement, Mr. Eric Sprott is now the Control Person (as that term is defined in the policies of the TSX Venture Exchange) of the Company. On July 23, 2015 the Company completed a private placement of 9,375,000 flow through units at a price of $0.32 per flow through unit, for gross proceeds of $3,000,000. Each flow through unit consists of one common share of the Company and one-half of one common share purchase warrant with each warrant entitling the holder thereof to purchase a common share at an exercise price of $0.40 until January 23, On October 7, 2015, under the terms of the Settlement Agreement between the Company and Istana as described in note 13, the Company issued an aggregate 800,000 common shares of the Company with a fair value of $200,000 ($0.25 per share being the quoted market price on issuance date) in settlement of the outstanding advance royalty payments of $237,500 less cash payments of $150,000, which resulted in a loss on settlement of $112,500 which was recognized in the condensed consolidated statement of income (loss) and other comprehensive income (loss). On December 23, 2015, the Company completed a private placement of 18,750,000 flow through common shares at a price of $0.32 per flow through share for gross proceeds of $6,000,000 with Osisko Gold Royalties Ltd. On December 23, 2015, the Company completed a private placement of 11,000,000 flow through units at a price of $0.32 per flow through unit, for gross proceeds of $3,520,000. Each flow through unit consists of one common share of the Company and one-half of one common share purchase warrant with each warrant entitling the holder thereof to purchase one common share at an exercise price of $0.40 until December 23, A finder s fee equal to 5% of the gross proceeds of the flow through private placement was paid. The fair value of the 5,500,000 common share purchase warrants was estimated at $678,800 using the Black- Scholes pricing model with the following assumptions: dividend yield 0%; risk free interest 0.50%; volatility 111% and an expected life of 24 months. (x) On February 5, 2016, the Company completed a private placement of 13,250,000 flow through common shares at a price of $0.32 per flow through share for gross proceeds of $4,240,000 with Osisko Gold Royalties Ltd. 9

10 (xi) On April 26, 2016, the Company completed a bought deal private placement and issued an aggregate of 22,183,500 flow-through common shares at a price of $0.70 per flow-through share for aggregate gross proceeds of $15,528,450. The Company paid the underwriters a cash commission equal to 6% of the gross proceeds of the Offering, not including gross proceeds raised from investors on the president s list and issued an aggregate of 404,200 compensation options to the underwriters. Each compensation option entitles the holder to acquire one common share of the Company at a price of $0.70 until April 26, Events Occurring After the Reporting Date Subsequent to February 29, 2016: On May 2, 2016, the Company and Williams Creek Gold Limited ( Williams Creek ) announced that the companies have entered into a definitive arrangement agreement dated April 29, 2016 (the Agreement ). Pursuant to the terms of the Agreement, Barkerville has agreed to issue an aggregate of 6,800,000 common shares of Barkerville in exchange for all of the issued and outstanding common shares of Williams Creek held by Williams Creek shareholders (the Transaction ). Pursuant to the Agreement, Barkerville has agreed to advance Williams Creek an aggregate amount of up to CDN$500,000, available in multiple draws bearing interest at an effective annual rate of 5% per annum (the Loan ) evidenced by a grid promissory note. The Loan will be secured against the assets of Williams Creek. Subject to the approval of the TSXV, Barkerville shall have the right, at its option, at any time following the termination of the Agreement under the terms and conditions thereof, to convert the Loan into common shares of Williams Creek at a conversion price equal to $0.02. The parties further agreed that Williams Creek will not give effect to any conversion, if, after giving effect to such conversion, Barkerville would own or exercise control or direction over greater than 19.9% of the total outstanding common shares of Williams Creek immediately after giving effect to such conversion Upon completion of the Transaction, Williams Creek will become a wholly owned subsidiary of Barkerville and former shareholders of Williams Creek will hold approximately 2.27% of the shares of Barkerville on an outstanding basis. The Arrangement is subject to the approval of the Supreme Court of British Columbia and all applicable regulatory authorities, including the TSXV and the conditions set out in the Agreement. Barkerville and Williams Creek expect to close the transaction on or about August 5, Outstanding Share Capital The Company has an unlimited number of common shares authorized, with 270,542,168 common shares outstanding on February 29, 2016 and 293,035,668 as of the date of this MD&A. A total of 17,791,661 stock options and 13,734,950 share purchase warrants were outstanding on February 29, 2016 and 15,106,661 stock options and 22,940,750 share purchase warrants were outstanding as of the date of this MD&A. Current Exploration Activities Phase I Diamond Drilling Program Barkerville Mountain Phase I and Phase II Diamond Drilling Program On June 23rd 2015, the Company announced the commencement of its Phase I diamond drilling program that is focused on the Bonanza Ledge BC Vein (BCV) Areas of the property (Barkerville Mountain). Geotech Drilling Services Limited, based out of Prince George, British Columbia was awarded the contract. The Phase I program was designed to validate the historical drilling performed on the property by previous operators, expand the known gold mineralization hosted in the BC Vein and also to assess the potential for additional occurrences of Bonanza Ledge style replacement sulphide gold mineralization. The Phase II BCV Infill program was performed to provide drilling confidence to the most economically prospective areas of the BCV mineralization that were identified in the 2015 Phase I campaign. Although the BCV mineralization still remains open to depth over its currently delineated 1,400 metre strike length, the second phase focused on drill-defining a near surface resource and ultimately reserve base which is intended to complement 10

11 the longer term Bonanza Ledge underground mine planning. Phase II BCV infill drilling was conducted from surface to 150 metres vertical depth over a strike length of 375 metres and has now been drilled to ~15 metre centres. As of February 29, 2016, three drill rigs have completed 263 drillholes totaling 50,013.9 metres as part of the Phase I and Phase II programs. BC Vein Drilling Program On Barkerville Mountain, two rigs are drilling on the BCV structure with the goal of methodically exploring undrilled portions of this large system as well as upgrading the historical drilling that may not have recovered all sulphide bearing drill core. During the preliminary stages of the 2015 Phase I drilling campaign, it was observed that portions of the mineralized zones were not recovered by the drilling process. These intervals of lost core have been assigned zero gold grade. It has been ascertained that the high sulphide intervals were essentially washed away by the drilling process and hence not recovered in their entirety. In consultation with Geotech Drilling Services Limited, an industry standard, environmentally safe drilling additive is now being utilized in all holes and core recoveries have increased to greater than 95% through the mineralized sulphide zones. The BCV has been outlined by past operators over a continuous 1,400 metres strike length and on average only tested to a vertical depth of 75 metres below surface. The deepest historical intersection on the BCV was drilled in 2000 via drillhole BC which graded g/t Au (0.66 oz/t) Au over 4.11 metres. This intersection is located immediately below the Bonanza Ledge open pit at a vertical depth of only 150 metres below surface and remains completely unexplored below this depth and also along strike. Drillhole pierce points for the 2015 program were designed to intersect the vein on aggressively spread out 50 metre hole spacings with the aim of outlining the most economically viable portions of the known 1,400 metre vein strike length. The first pass of shallow drilling tested the BCV from surface to 150 metres vertical depth whilst the second pass selectively assessed the depth potential of the vein from 200 to 400 metres below surface based on the results gathered from the first pass of shallow drilling. Other Drilling Barkerville Mountain In conjunction with the Phase I BCV program, a third drill rig was temporarily utilized to assess other targets on Barkerville Mountain. These targets were largely defined by gold in soil anomalies and to a lesser extent, previously undrilled gold in bedrock occurrences. This first pass assessment was successful in drill defining gold mineralization in four new areas on Barkerville Mountain: TC Area, KL Area, AG Area and the New Trend. The TC Area occurs 100 metres north of the Bonanza Ledge mineralization as a series of veins comparable to the hangingwall veins above the BCV. Drillhole BGM , which intersected g/t (0.32 oz/t) Au over 8.00 metres including g/t (0.57 oz/t) Au over 4.00 metres and g/t (1.03 oz/t) Au over 1.00 metres, represents the deepest occurrence of this zone to date at only 50 metres vertically below surface. The TC Area remains untested along strike to the north as well as down dip. The location of the new KL Area was identified by previous operators by a marked, auriferous soil anomaly and was subsequently exposed by mechanical stripping in Surface sampling of the exposed bedrock yielded grab assays up to g/t (4.88 oz/t) Au in an undrilled swarm of sulphide bearing quartz veins. The first pass of 2015 Phase I drilling has outlined the horizon over a strike length of 60 metres and to a vertical depth of 120 metres. The KL Area remains open at depth and along strike and is interpreted to represent a previously unidentified auriferous structure with characteristics analogous to Cow Mountain mineralization. The AG Area represents a new, blind discovery located approximately 550 metres east of the Bonanza Ledge open pit. The area is manifested by a 550 metre long coincident gold and silver soil anomaly in an area devoid of rock outcrop and historical drilling. Discovery holes BGM and BGM have only tested the Upper Horizon to a vertical depth of 20 metres below surface and the Lower Horizon to a vertical depth of 75 metres. The Upper and Lower AG Horizons are located 300 and 200 metres (respectively) in the hangingwall rocks northeast of the BCV and are currently unexplored along strike and down dip. Having never been historically drilled along its surface expression, this area represents a significant new exploration target based on the grades and widths intersected in this first pass of drilling as well as the sheer size of the soil anomaly. The New Trend mineralization occurs as a linear structure approximately 300 metres stratigraphically above and subparallel to the BCV and was intersected by drillholes BGM : g/t (0.83 oz/t) Au over 2.00 metres including 27.3 g/t (0.80 oz/t) Au over 1.00 metres and 29.7 g/t (0.87 oz/t) Au over 1.00 metres and BGM : g/t (0.46 oz/t) Au over 0.50 metres and g/t (0.41 oz/t) Au over 1.30 metres. These intersections correlate with previously 11

12 reported drillhole BGM : g/t (0.66 oz/t) Au over 2.50 metres including g/t (1.49 oz/t) Au over 1.00 metres. Drilling Highlights Phase I and Phase II Barkerville Mountain The following is a selection of publicly disclosed drill intersections from the Phase I and Phase II programs on Barkerville Mountain: BCV - BGM : g/t (0.60 oz/t) Au over 3.90 metres, including g/t (1.73 oz/t) Au over 0.90 metres TC - BGM : g/t (0.53 oz/t) Au over 3.35 metres, including g/t (1.10 oz/t) Au over 1.55 metres TC - BGM : g/t (0.43 oz/t) Au over 6.00 metres, including g/t (3.03 oz/t) Au over 0.65 metres TC - BGM : g/t (0.30 oz/t) Au over 9.60 metres, including g/t (1.69 oz/t) Au over 0.90 metres TC - BGM : g/t (0.24 oz/t) Au over 8.13 metres, including g/t (1.37 oz/t) Au over 0.90 metres BCV - BGM : g/t (0.81 oz/t) Au over 3.90 metres including g/t (3.44 oz/t) Au over 0.80 metres BCV - BGM : g/t (0.63 oz/t) Au over 3.75 metres including g/t (1.14 oz/t) Au over 2.00 metres BCV - BGM : g/t (0.31 oz/t) Au over 3.00 metres including g/t (0.38 oz/t) Au over 1.50 metres BCV - BGM : 8.72 g/t (0.25 oz/t) Au over 3.60 metres including g/t (0.75 oz/t) Au over 0.90 metres BCV - BGM : g/t (0.47 oz/t) Au over 0.80 metres and g/t (0.66 oz/t) Au over 0.80 metres BCV - BGM : g/t (0.68 oz/t) Au over 3.00 metres including g/t (1.38 oz/t) Au over 1.20 metres BCV - BGM : g/t (0.36 oz/t) Au over 3.00 metres including g/t (0.79 oz/t) Au over 1.00 metres BCV - BGM : g/t (0.39 oz/t) Au over 9.00 metres including g/t (0.53 oz/t) Au over 4.80 metres including g/t (1.82 oz/t) Au over 1.00 metres BCV - BGM : g/t (0.50 oz/t) Au over 4.45 metres including g/t (0.92 oz/t) Au over 2.30 metres including g/t (1.51 oz/t) Au over 1.30 metres BCV - BGM : g/t (0.30 oz/t) Au over 5.00 metres including g/t (0.64 oz/t) Au over 2.00 metres BCV - BGM : 5.27 g/t (0.15 oz/t) Au over metres including g/t (0.39 oz/t) Au over 5.70 metres including g/t (0.73 oz/t) Au over 1.00 metres BCV - BGM : g/t (0.66 oz/t) Au over 2.50 metres including g/t (1.49 oz/t) Au over 1.00 metres BCV - BGM : g/t (0.33 oz/t) Au over 4.05 metres including g/t (0.69 oz/t) Au over 1.85 metres including g/t (1.02 oz/t) Au over 0.75 metres BCV - BGM : 8.99 g/t (0.26 oz/t) Au over 2.80 metres including g/t (0.31 oz/t) Au over 1.10 metres and g/t (0.42 oz/t) Au over 0.80 metres BCV - BGM : g/t (0.29 oz/t) Au over 5.00 metres including g/t (0.40 oz/t) Au over 1.00 metres and g/t (0.56 oz/t) Au over 1.00 metres BCV - BGM : 6.71 g/t (0.20 oz/t) Au over 5.50 metres including g/t (0.64 oz/t) Au over 1.20 metres BGM : g/t (0.60 oz/t) Au over 2.60 metres including g/t (1.21 oz/t) Au over 1.20 metres BCV - BGM : 7.87 g/t (0.23 oz/t) Au over metres including g/t (0.42 oz/t) Au over 1.20 metres and g/t (0.40 oz/t) Au over 5.50 metres BCV - BGM : g/t (0.76 oz/t) Au over 2.80 metres including g/t (0.60 oz/t) Au over 0.95 metres and g/t (1.88 oz/t) Au over 0.80 metres BCV - BGM : g/t (0.33 oz/t) Au over 8.90 metres including g/t (2.40 oz/t) Au over 1.05 metres 12

13 BCV - BGM : 6.62 g/t (0.19 oz/t) Au over metres including g/t (0.59 oz/t) Au over 0.55 metres and g/t (0.52 oz/t) Au over 1.00 metres and g/t (0.98 oz/t) Au over 0.80 metres BCV - BGM : g/t (0.55 oz/t) Au over 4.40 metres including g/t (1.10 oz/t) Au over 2.00 metres including g/t (1.92 oz/t) Au over 1.00 metres BCV - BGM : g/t (3.51 oz/t) Au over 2.50 metres including g/t (9.69 oz/t) Au over 0.90 metres BCV - BGM : g/t (0.34 oz/t) Au over 5.30 metres including g/t (1.67 oz/t) Au over 1.00 metres BCV - BGM : g/t (0.61 oz/t) Au over 2.00 metres including g/t (0.76 oz/t) Au over 1.00 metres and g/t (0.47 oz/t) Au over 1.00 metres BCV - BGM : g/t (0.85 oz/t) Au over 2.55 metres including g/t (0.41 oz/t) Au over 1.15 metres and g/t (1.21 oz/t) Au over 1.40 metres BCV - BGM : g/t (0.29 oz/t) Au over metres including g/t (0.47 oz/t) Au over 9.70 metres including g/t (0.97 oz/t) Au over 2.70 metres and g/t (0.45 oz/t) Au over 3.00 metres BCV - BGM : g/t (0.63 oz/t) Au over 4.00 metres including g/t (0.81 oz/t) Au over 3.00 metres including g/t (1.30 oz/t) Au over 1.50 metres BCV - BGM : g/t (1.27 oz/t) Au over 7.95 metres including g/t (1.60 oz/t) Au over 5.95 metres including g/t (6.11 oz/t) Au over 1.00 metres BCV - BGM : g/t (0.54 oz/t) Au over 4.70 metres including g/t (1.70 oz/t) Au over 1.00 metres BCV - BGM : g/t (0.56 oz/t) Au over 4.70 metres including g/t (0.68 oz/t) Au over 1.00 metres including g/t (1.75 oz/t) Au over 1.00 metres TC - BGM : g/t (0.32 oz/t) Au over 8.00 metres including g/t (0.57 oz/t) Au over 4.00 metres and g/t (1.03 oz/t) Au over 1.00 metres BCV - BGM : g/t (0.68 oz/t) Au over 7.00 metres including g/t (1.42 oz/t) Au over 2.75 metres including g/t (2.20 oz/t) Au over 1.00 metres BCV - BGM : g/t (0.60 oz/t) Au over 7.25 metres including g/t (1.12 oz/t) Au over 1.50 metres and g/t (2.88 oz/t) Au over 1.05 metres BCV - BGM : g/t (0.37 oz/t) Au over 7.70 metres including g/t (2.16 oz/t) Au over 1.10 metres BCV - BGM : 9.97 g/t (0.29 oz/t) Au over metres including g/t (0.44 oz/t) Au over metres including g/t (0.71 oz/t) Au over 6.00 metres and g/t (1.31 oz/t) Au over 1.00 metres BCV - BGM : 9.75 g/t (0.28 oz/t) Au over 8.80 metres including g/t (0.44 oz/t) Au over 3.80 metres including g/t (1.14 oz/t) Au over 0.90 metres and g/t (0.45 oz/t) Au over 0.80 metres A complete list of all drill results is available under the Company s profile on SEDAR at as well as the Company s website at Engagement of SGS Canada SGS (Canada) has been engaged to perform all analytical work for the Phase I drilling/sampling campaign. The SGS facility is accredited to the ISO/IEC standard for gold assays and all analytical methods include quality control materials at set frequencies with established data acceptance criteria. SGS methodology includes quality control materials at set frequencies with established data acceptance criteria and includes preparation blanks, duplicates, method blanks, weighed pulp replicates and certified reference materials in each sample batch. Samples are submitted to SGS s facility in Burnaby, B.C. for preparation and analysis. The entire sample is crushed and 1,000 grams is pulverized. Analysis for gold is by 50g fire assay fusion with atomic absorption (AAS) finish with a lower limit of 5ppb and upper limit of 10,000ppb. Samples with gold assays greater than 10,000ppb are re-analyzed using 50g fire assay with gravimetric finish, as well as 1000g screen metallics fire assay. Samples are also analyzed using a 49 multi-elemental geochemical package by a 4-acid digestion, followed by Inductively Coupled Plasma Atomic Emission Spectroscopy (ICP-AES) and Inductively Coupled Plasma Mass Spectroscopy (ICP-MS). 13

14 New QAQC Program Implementation Lynda Bloom M.Sc., P.Geo, of Analytical Solutions Limited (ASL), was engaged to design a rigorous QAQC program and operations manual for the Company s diamond drilling sampling programs. ASL was chosen due to their extensive experience in exploration geochemistry, data interpretation and quality control for assay programs. ASL provides independent consulting services that enable mining companies to comply with security exchange regulations. Quality assurance/ quality control (QAQC) programs are designed and monitored according to specific project requirements. ASL provides QPs with assistance in designing QC programs so that regulators and third-party auditors are satisfied with the integrity of the assays, while minimizing expense. Data Compilation The Company is performing an ongoing assessment and compilation of all historical technical data in an effort to establish a comprehensive and quality assured database that will form the basis of a three dimensional geological model of the property. This exercise will allow for a detailed interpretation of the geological contols of the gold mineralization allowing for more constrained and detailed resource estimates to be perfomed that will entertain the potential amenability of the mineralization to underground mining scenarios. Additionally, the Company is compiling historical data as part of its ongoing regional assessment. Regional Surface Mapping and Sampling Talisker Exploration Services Incorporated, based out of Toronto, Ontario has been engaged to perform a project wide surface and underground geological mapping and sampling program with the aim of developing a clear geological understanding on the controls of the gold mineralization in the district as well as establishing a stronger understanding of the larger scale geological framework as it pertains to regional targeting. This work will be performed in parallel with the regional compilations and also the geological modelling of the Cow Mountain drilling database. Based on the initial larger scale regional assessment, the Company elected to acquire an additional 81,000 hectares via staking of mineral claims in 12 separate areas. The Company s mineral claim holdings now total ~213,000 hectares. As part of this undertaking, a large scale regional surface exploration program has been initiated that will focus on assessing the numerous, high ranking regional targets that have only received limited systematic exploration over the project s history. To assist with the regional understanding, Geotech Airborne Ltd. has been contracted to perform a 20,000 line kilometre electromagnetic and magnetic aerial survey encompassing the Company s land holdings. 14