GUYANA GOLDFIELDS INC....Guyana Goldfields is a Canadian‐based company engaged in the investment, acquisition, exploration, development and operation of mineral property interests,

GUYANA GOLDFIELDS INC. MANAGEMENT DISCUSSION AND ANALYSIS

THIRD QUARTER 2019

-2- GUYANA GOLDFIELDS INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS THIRD QUARTER 2019

TABLE OF CONTENTS

Management’s Discussion and Analysis ..............................................................................................3

Business Overview .............................................................................................................................3

Quarterly Highlights ...........................................................................................................................4

Outlook .............................................................................................................................................5

Key Performance Drivers & Trends .....................................................................................................6

Operating Results ..............................................................................................................................7

Financial Results .............................................................................................................................. 11

Exploration ...................................................................................................................................... 13

Capital Projects Updates .................................................................................................................. 13

Liquidity & Capital Resources ........................................................................................................... 13

Summary of Quarterly Financial Results ........................................................................................... 15

Outstanding Share Data ................................................................................................................... 15

Non-IFRS Performance Measures ..................................................................................................... 16

Gold Produced – Change in Definition............................................................................................... 18

Additional IFRS Financial Performance Measures .............................................................................. 18

Risk Factors ..................................................................................................................................... 18

Forward-Looking Statements ........................................................................................................... 19

Technical Information ...................................................................................................................... 21

Accounting Disclosures .................................................................................................................... 22



MANAGEMENT’S DISCUSSION AND ANALYSIS The following is Management’s Discussion and Analysis (“MD&A”) of the factors management believes are relevant to assessing and understanding the consolidated financial condition and results of operations of Guyana Goldfields Inc. (the “Company”) for the three and nine months ended September 30, 2019 and 2018. References to “Guyana Goldfields” in this MD&A refer to the Company and its subsidiaries taken as a whole.

This MD&A should be read in conjunction with Guyana Goldfields’ unaudited condensed interim consolidated financial statements and related notes for the three and nine months ended September 30, 2019 and 2018, which are prepared in condensed format in accordance with International Financial Reporting Standards (“IFRS”) as applicable to the preparation of interim financial statements, including International Accounting Standard IAS 34 Interim Reporting (“IAS 34”). The unaudited condensed interim consolidated financial statements should also be read in conjunction with the audited consolidated financial statements and the related notes for the twelve months ended December 31, 2018, which have also been prepared in accordance with IFRS. This MD&A contains certain forward-looking statements. Refer to the cautionary language at the end of this MD&A.

For the purposes of preparing this MD&A, management, in conjunction with the Board of Directors, considers the materiality of information. Information is considered material if such information significantly affects, or would be reasonably be expected to have a significant effect on the market price or value of any of the Company’s securities.

Additional information relating to the Company, including its Annual Information Form for the most recently completed fiscal year, is available on SEDAR at www.sedar.com. The Company is a reporting issuer under applicable securities legislation in each of the provinces of Canada and its outstanding common shares are listed on the Toronto Stock Exchange under the symbol GUY.

Certain non-IFRS measures are included in this MD&A. The Company believes that these measures provide investors an improved ability to evaluate the underlying performance of the Company. The non-IFRS measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The non-IFRS measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers.

Results are reported in United States dollars, unless otherwise noted. Due to rounding, the sum of all the quarters may not add to the annual total and per ounce figures may not calculate based on the amounts presented. Information contained herein is presented as at October 29, 2019 unless otherwise indicated.

BUSINESS OVERVIEW

Guyana Goldfields is a Canadian‐based company engaged in the investment, acquisition, exploration, development and operation of mineral property interests, principally gold resource properties in Guyana, South America. The Company’s primary focus is the production of gold from its 100% owned Aurora Gold Mine (“Aurora”), which commenced commercial production on January 1, 2016.

The Company also holds 15 prospecting licenses covering 146,571 acres and the beneficial rights to a total of 91 medium scale mining permits (“MPs”) and 7 medium scale prospecting permits (“PPs”) covering 110,940 acres, contiguous with and surrounding the Aurora mine property. The MPs and PPs are subject to a net smelter return royalty (“NSR”) that varies from 1.5% to 2% or fixed payments in lieu thereof at the option of the Company.



QUARTERLY HIGHLIGHTS

OPERATIONAL PERFORMANCE

• Aurora continued excellent safety performance with zero lost time injuries this quarter, now totaling 2.8 million hours without a lost time injury. An unfortunate off-site traffic fatality occurred on October 20, 2019, involving a contractor (refer to press release dated October 21, 2019).

• Third quarter gold production of 22,100 ounces amounting to 96,000 ounces of gold produced in the first nine months of 2019.

• Gold sales of 23,500 ounces at a total cash cost (before royalty)1 of $1,372 per ounce of gold sold as a result of very low gold sales this quarter. Cost of sales (including royalty and depreciation) were $1,864 per ounce and all-in sustaining costs¹ ("AISC") were $1,882 per ounce.

• Mining rate averaged 51,500 tonnes per day, an 11% decrease in the mining rate compared to the previous quarter due to sequencing, pit constraints imposed by smaller benches, reduced working faces, heavy rainfall and the work stoppage outlined below.

• On July 2, 2019, the Company experienced work stoppage at its Aurora mine as a result of a contingent of the workforce blocking delivery of ore to the mill. The work stoppage lasted three days, with employees returning to work on July 5, 2019. As a result of the operational days lost, the Company estimated that approximately 22,500 tonnes were not processed.

• Quarterly mill performance of 6,900 tonnes per day is a 12% decrease from second quarter as a result of management reducing throughput rates to maximize recoveries.

• On September 9, 2019, the Company announced receipt of a Trade Union Certificate of Recognition from the Trade Union Recognition and Certification Board in Guyana identifying The National Mine Workers Union (“NMWU”) as the representative union for employees below the supervisory level at Aurora in Guyana. The Company is in active discussion with NMWU and governmental agencies. The timeline for establishing a collective labor agreement is undefined.

• Management initiated a comprehensive mine, production and cost savings plan review to make the necessary changes and improvements to increase productivity and profitability. The result of the review is expected to be delivered in the first quarter of 2020; however, some cost improvements are expected to begin to be realized almost immediately.

FINANCIAL PERFORMANCE

• Loss from mine operations for the third quarter was $9.0 million, as a result of a decrease in sales revenue in comparison to earnings from mine operations of $5.3 million and $11.1 million in the prior quarter and the third quarter of 2018 respectively. The decrease in sales revenue is mainly due to lower mill throughput resulting from low ore volumes mined, coupled with lower grade and recoveries of ore processed from stockpiles resulting in lower volume of gold produced and sold during the current quarter.

• Net loss for the quarter was $9.5 million, largely attributable to $9.0 million loss from mine operations including a write-down of $5.0 million which comprised $1.8 million value added tax receivable from the Government of Guyana and $3.2 million on materials and supplies inventory. The aforementioned write-down totals $5.0 million which reflects management’s best estimate of the net realizable value to recover and it is excluded from AISC calculations as per the World Gold Council’s November 2018 published guidance.

1 This is a non-IFRS measure. Refer to “Non-IFRS Performance Measures” section in this MD&A.



• Cash and cash equivalents of $24.8 million as at September 30, 2019 which is $14.1 million lower than the $38.9 million reported in the second quarter of 2019. Cash was utilized in ongoing waste development during a quarter of low ore release and consequential low gold sales. Cash and cash flow generated from operations is expected to be sufficient to fund the necessary planning work, accelerated stripping and underground development for the remainder of 2019 and 2020, subject to the impact of the ongoing review of the life of mine plan (see “Liquidity Outlook” section).

MANAGEMENT CHANGES

• On July 22, 2019, the Company announced the appointment of Leon Binedell as Chief Financial Officer effective August 26, 2019.

• On July 30, 2019, the Company announced that Scott Caldwell stepped down as the Company’s President and Chief Executive Officer and as a director of the Company effective at the close of business on July 31, 2019. On the same day, the Company announced that Allen Palmiere assumed leadership of the Company as Interim Chief Executive Officer, effective at the close of business on July 31, 2019.

• The Company eliminated the corporate development department during August and a finance department restructure effort commenced early September.

• The Company has increased technical and operational leadership at Aurora which will be completed in the fourth quarter of 2019.

OUTLOOK

PRODUCTION AND COST SAVING INITIATIVES

With the appointment of the Interim CEO coupled with ongoing challenges in achieving the optimized sequence of mining and waste development in the open pit (refer to “Operating results” section), the Company commenced a thorough review of the Aurora life of mine plan this quarter. Management is embarking on a comprehensive mine, production and cost savings plan review to make the necessary changes and improvements to increase productivity and profitability.

To date the review has confirmed that Aurora is a sound asset, including geological resources and a robust processing facility, however, the mine plan requires further review in order to maximize the value of Aurora. During the quarter the Company commenced changes to the operating team, modified operating procedures and enhanced reporting. Management appointed Roscoe Postle Associates Inc. (“RPA”) to assist in this review and to build on the prior work conducted that culminated in the release of an updated NI43-101 compliant Technical Report of the Aurora Gold Mine, Guyana dated March 29, 2019 (the “RPA Report”).

Part of this review includes assessing the cost savings initiatives which were underway as a result of the implementation of the management optimization plan previously announced by the Company on April 30, 2019, prior to the changes in management noted above. The timing of cost savings implementation may be impacted by the outcomes of the life of mine review and detailed mine planning underway by current management and RPA. Management does not expect the review to materially change the total reserves to be mined over the previously published RPA Report. The detailed review and mine planning work underway may see a change in the sequence of open pit development and ore release, timing of access to Rory’s Knoll underground and the mining methods.

The new senior management and site operating management team have a proven ability to optimize operations and are advancing the review focusing on operational execution to support a sustainable and profitable production profile based on practical sequencing of ore release. Fourth quarter gold production is expected to improve over the third quarter as mining moves back into the primary ore zone within Rory’s Knoll; however, full



year production is expected to be below previously released guidance. Prior guidance does not reflect current operating realities experienced in the mine sequence and operational constraints mentioned above. As such, full year unit costs are expected to be in line with the third quarter year-to-date actual costs. Management does not consider it appropriate to provide updated guidance ranges or any forward projections until the review is completed. The Company will release the details of this review once fully completed, which is expected in the first quarter of 2020, however some cost improvements are expected to begin to be realized almost immediately.

UNDERGROUND EXPLORATION DECLINE PROGRESS

The early works program on the underground exploration decline continued in the third quarter, extending a total of 394 metres.

The early works program included the first 400 metres of development of the exploration decline. Management is currently evaluating options for the full development of the underground alongside the ongoing life of mine review being conducted and appointed specialists to assist in this assessment.

2019 EXPLORATION

Exploration activities for the quarter focused on advancing the understanding of the geology and mineralization controls at Aurora mine, in support of the life of mine plan review and detailed mine planning that is currently underway. Previous assay results will be incorporated within the analysis of the review.

KEY PERFORMANCE DRIVERS & TRENDS

The price of gold is the largest single factor in determining the Company’s profitability and cash flow from operations. Historically, the price of gold has been subject to volatile price movements over short periods of time and is affected by numerous macroeconomic and industry factors that are beyond the Company’s control. Major influences on the gold price include currency exchange rate fluctuations and the relative strength of the U.S. dollar, the supply of and demand for gold and macroeconomic factors such as the level of interest rates and inflation expectations.

The price of gold over the last eight quarters based on the London Metal Exchange (“LME”) PM Fix is summarized in the chart below. The average market price of gold on the LME was $1,473 per ounce for the third quarter of 2019. During this period the Company realized an average selling price of gold of $1,485 per ounce sold, slightly above the average market price. Subsequent to September 30, 2019, the price of gold has primarily been in a trading range between $1,474 per ounce and $1,517 per ounce. The Company has not entered into any gold hedging programs.



Other key performance drivers include production volumes and costs, which are further discussed on the following pages.

OPERATING RESULTS

KEY OPERATING STATISTICS

Three months ending

September 30

Nine months ending September 30

2019 2018 2019 2018

Ore mined tonnes ('000s) 286 566 1,335 1,550 Waste mined tonnes ('000s) 4,455 4,872 14,197 10,786

Total mined tonnes ('000s) 4,741 5,438 15,532 12,336 Strip ratio waste:ore 15.6 8.6 10.6 7.0 Tonnes mined per day tpd 51,500 59,100 56,900 45,200 Ore processed tonnes ('000s) 638 647 1,998 1,898 Tonnes processed per day tpd 6,900 7,000 7,300 7,000 Head grade g/t Au 1.21 2.12 1.66 1.98 Recovery % 89.1 93.5 90.0 92.3 Gold produced2 Ounces 22,100 41,200 96,000 111,300 Gold sold Ounces 23,500 41,200 100,000 110,900 Average realized gold price $/ounce 1,485 1,200 1,353 1,274 Cost of sales $/ounce 1,864 958 1,393 994 Cash costs before royalty3 $/ounce 1,372 682 930 710 All-in sustaining3 $/ounce 1,882 1,068 1,465 1,057

2 Change in definition of calculating and reporting gold produced effective January 1, 2019. Refer to “Gold Produced – Change in Definition” section of this MD&A. 3 This is a non-IFRS measure. Refer to “Non-IFRS Performance Measures” section in this MD&A.



GOLD PRODUCTION4

Gold production for the third quarter was 22,100 ounces, which is significantly lower than the prior quarter and comparable quarter of the prior year as a result of low ore release due to sequencing of waste development coupled with low grade stockpile ore feed with an average grade of 1.21g/t. Fourth quarter gold production is expected to improve over the third quarter as mining moves back into the primary ore zone within Rory’s Knoll. See “Mining Activities” and “Processing Activities”, respectively, on the following page for further detail.

MINING ACTIVITIES

During the third quarter, the average mining rate was 51,500 tpd, an 11% decline from the previous quarter and a 13% decrease from the third quarter of 2018. The average strip ratio during the quarter was 15.6 tonnes of waste to one tonne of ore, an increase from a strip ratio of 8.6:1 from the comparable quarter in the prior year. The decline in mining rate from the prior quarter is primarily due to sequencing and pit constraints imposed by

4 Change in definition of calculating and reporting gold produced effective January 1, 2019. Refer to “Gold Produced – Change in Definition” section of this MD&A.

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smaller benches, reduced working faces as a result of ongoing challenges in sequencing or waste development to ore release, coupled with heavier rainfall and a 3-day work stoppage.

PROCESSING ACTIVITIES

The mill throughput rates for the quarter averaged 6,900 tpd. The decreased throughput from the prior quarter and the third quarter prior year is a result of management reducing throughput rates to maximize recoveries from lower grade materials being processed during the quarter. On a year-to-date basis, the increase in throughput from the prior year is a result of commissioning the second phase of the plant expansion during the first quarter of 2019, which has increased mill availability and throughputs.

The mill head grade for the third quarter was 1.21 g/t Au, which is lower than the grade of 2.12 g/t Au milled during the third quarter of 2018 as a result of low grade stockpile ore being fed during the current quarter. Gold recoveries in the current quarter of 89.1% are lower than the comparable quarter in the prior year at 93.5% as a result of low volumes of higher grade ore available from targeted ore zones.

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COST OF SALES, TOTAL CASH COSTS5 & AISC5

Cost of sales (including depreciation and royalties) was $1,864 per ounce in the third quarter of 2019 compared to $958 per ounce for the comparable quarter in 2018. This corresponds to a total cash cost (before royalty)5 of $1,372 per ounce of gold sold, an 84% increase from the prior quarter ($746 per ounce) and a 101% increase from the comparable quarter in 2018 ($682 per ounce). The increase in cash costs on a per ounce basis from the comparable and prior quarter are largely attributable to lower mill throughput resulting from less ore mined, lower grade and recoveries of ore processed and therefore lower volume of gold produced and sold during the current quarter.

AISC5 for the quarter was $1,882 per ounce, which is a 42% increase from the prior quarter ($1,323 per ounce) and a 76% increase from the comparable quarter in the prior year ($1,068 per ounce). This increase in AISC1 over the prior year is primarily attributable to low volumes of gold sold during the current quarter.

5 This is a non-IFRS measure. Refer to “Non-IFRS Performance Measures” section in this MD&A

$400

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FINANCIAL RESULTS

SELECTED QUARTERLY FINANCIAL INFORMATION

(in thousands of US dollars, except ounces, per ounce and per share figures)

Three months ending

September 30


2019 2018 2019 2018

Revenue $ 34,843 $ 49,418 $ 135,294 $ 141,348 Cost of sales 43,796 39,453 139,292 110,227

(Loss) earnings from mine operations $ (8,953) $ 9,965 $ (3,998) $ 31,121 Corporate general & administrative expenses 2,082 1,949 10,812 7,868 Exploration expenses 897 1,230 1,363 4,203 Restructuring expenses 520 3,642 5,626 3,642 Finance (income) expense, net (285) 376 (1,589) (193) Deferred tax (recovery) expense (2,649) 4,964 (1,712) 8,202

Net (loss) income $ (9,518) $ (2,196) $ (18,187) $ 7,399

Comprehensive (loss) income $ (9,518) $ 24,050 $ (18,187) $ 33,645

Net (loss) earnings per share (EPS) Basic $ (0.06) $ (0.01) $ (0.11) $ 0.04 Diluted $ (0.06) $ (0.01) $ (0.11) $ 0.04

Cash flow from operating activities $ 3,029 $ 19,650 $ 36,963 $ 39,541 Cash and cash equivalents $ 24,845 $ 92,621 $ 24,845 $ 96,621 Debt $ - $ 45,000 $ - $ 45,000 Total Assets $ 424,541 $ 479,488 $ 424,541 $ 479,488

REVENUE

During the third quarter of 2019, the Company sold 23,500 ounces of gold (2018 – 41,200 ounces) at an average realized price of $1,485 per ounce (2018 – $1,200 per ounce). Revenue for the three months ended September 30, 2019 was $34.8 million, a decrease of $14.6 million compared to the comparable period in 2018 ($49.4 million). The decrease is due to a lower volume of gold ounces sold ($26.3 million), partly offset by the increase in the average realized selling price ($11.7 million).

On a year to date basis, the Company sold 100,000 ounces of gold, a decrease from the comparable period in the prior year of 110,900 ounces sold. The average realized selling price for the nine months ended September 30, 2019 was $1,353 (2018 – $1,274). Revenue for the year to date period was $135.3 million, $6.0 million lower than the comparable period in 2018 of $141.3 million. The decrease in revenue is due to lower volume of gold ounces sold ($14.8 million), partly offset by a higher average realized selling prices ($8.7 million).

COST OF SALES

Cost of sales is comprised of royalties, costs associated with mining and processing activities (“Production Costs”) and depreciation.

Cost of sales for the third quarter of 2019 was $43.8 million, which is $4.3 million higher than the third quarter of 2018 ($39.5 million). The increase for the third quarter over the comparable period last year was mainly due to $1.8 million write-down recorded on value added tax receivable from the Government of Guyana and $3.2 million write-down recorded on materials and supplies inventory. For the nine months ended September 30, 2019, cost



of sales was $139.0 million, an increase of $28.8 million from the comparable period in the prior year ($110.2 million). The increase in cost of sales for the year-to-date period is mainly due to higher volume of waste mined at significantly higher strip ratios as mentioned in Operating Results above, coupled with the previously mentioned write-downs on value added tax receivable and materials and supplies inventory.

For the current quarter and year-to-date, cost of sales per ounce of gold sold was higher than both comparable periods in 2018. The increase is mainly due to low gold sales volumes in the current quarter driven by low ore release during the quarter and from overall higher strip ratios, coupled with lower grade and recoveries of ore processed.

CORPORATE, GENERAL & ADMINISTRATIVE EXPENSES

Corporate, general and administrative expenses include salaries and benefits (including share‐based compensation), professional fees, shareholder relations and filing fees, shareholder meeting related costs as well as other expenditures associated with operating the Canadian corporate office.

Corporate, general and administrative expenses of $2.1 million for the third quarter of 2019 is in line with the third quarter of the prior year ($2.0 million). Year-to-date expense of $10.8 million is $2.9 million higher than the comparable period in 2018 ($7.9 million). The higher expense in corporate costs is largely attributable to shareholder proxy contest related costs of $4.3 million (2018 – $nil), partially offset by $2.1 million lower corporate salaries and benefits, as a result of on-going restructuring of the corporate office. See “Restructuring Expenses” below.

RESTRUCTURING EXPENSES

Restructuring expenses include termination benefits (including severance and share-based compensation), professional fees, as well as other expenditures associated with management changes. Severance costs are excluded from AISC calculations as per the World Gold Council’s November 2018 published guidance.

EXPLORATION AND EVALUATION EXPENSES

Exploration and evaluation expenses include costs associated with brownfield and greenfield exploration projects, including but not limited to salaries and wages, drilling and assay costs and field and camp supplies. All costs for exploration in the current resource shell limits are considered developmental and capitalized to mineral properties.

Exploration expenses in the current quarter totaled $0.9 million (2018 – $1.2 million). The year-to-date expenditure of $1.4 million decreased from prior year expenditure of $4.2 million. The decrease in expenditure is mainly due to the higher focus on brownfields exploration during the current year, which was capitalized to mineral properties in the amount of $1.3 million (2018 – $nil).

NET FINANCE INCOME/EXPENSE

Net finance income for the third quarter of 2019 was $0.3 million, an increase of $0.7 million income compared to the $0.4 million finance expense in the third quarter of 2018. The year-to-date net finance income of $1.6 million is higher than the $0.2 million income reported for the comparable period in 2018. The reason for the change in finance income/expense from the prior year is a result of savings on the interest expense after the Company repaid its debt during April 2019.



DEFERRED TAX (RECOVERY) EXPENSE

Deferred tax recovery for the third quarter and year-to-date 2019 was $2.6 million and $1.7 million, respectively. In comparison to the deferred tax expense of $5.0 million in the third quarter of 2018 and $8.2 million in the nine months ended September 30, 2018, the deferred tax recovery in 2019 is primarily a result of the operating loss from the Aurora mine during the year.

EXPLORATION

Exploration activities during the third quarter of 2019 were redirected to focus on advancing the understanding of the geology at Mad Kiss and North Alec Hill deposits and mineralization controls at Aurora, as well as consolidating historical sampling and geological data into a geographic information system database, in support of the life of mine plan currently under review. Previous assay results will be incorporated within the analysis of the review.

CAPITAL PROJECTS UPDATES

UNDERGROUND EXPLORATION DECLINE UPDATE

Work on the underground exploration decline continued in the third quarter. The contractor advanced the exploration decline approximately 230 metres and 394 metres during the current quarter and current year, respectively. In order to fulfill the scope of the early works phase, the decline will be extended to 400 metres.

Management is currently evaluating options for the full development of the underground alongside the ongoing life of mine review being conducted with assistance from RPA and appointed specialists to assist in this assessment.

LIQUIDITY & CAPITAL RESOURCES

The Company finished the quarter with a cash balance of $24.8 million. The Company expects to fund all of its contractual commitments and obligations through operating cash flow generated and cash on hand.

CASH FLOWS

• The Company generated $3.0 million of operating cash flow during the third quarter compared to $19.7 million of operating cash flow in the third quarter of 2018. For the nine months ended September 30, 2019, the Company generated operating cash flow of $37.0 million compared to $39.5 million in the comparable period of 2018. The decrease in 2019 cash flow is primarily a result of the operating loss from the Aurora mine.

• Cash used in investing activities was $17.8 million for the third quarter of 2019, compared to cash inflow of $16.0 million in the same comparable period prior year. The difference in investing cash outflow between the quarters is mainly due to a $35.5 million cash proceed received from the sale of SolGold investment in the third quarter of 2018. Year-to-date cash flow used in investing activities totals $53.4 million (2018 – $6.1 million), mainly due to $62.4 million cash used in capital investments. The most significant capital investments are the deferred stripping of $36.4 million (2018 – $12.6 million) and $5.4 million (2018 – $nil) in underground development.

• For the third quarter of 2019, total cash provided by financing activities was an inflow of $1.0 million compared to an outflow of $5.7 million in the comparable period last year. Year-to-date cash used in financing activities was $40.7 million, as compared to $16.6 million in the prior year comparable period. The increase in the



current year is largely attributable to management’s decision to retire the remaining loan facility on April 30, 2019 as previously disclosed.

LIQUIDITY OUTLOOK

At present, the Company anticipates that its mine operations will generate sufficient working capital and cash flow to cover operating requirements through 2019 and 2020. However, among other things, the ongoing review being conducted on the life of mine plan may impact the timing of cash flows and the Company’s need for financing. As such, management is actively exploring available financing alternatives to provide additional balance sheet flexibility.

CONTRACTUAL OBLIGATIONS, COMMITMENTS AND CONTINGENCIES

The Mineral Agreement and Mining Licence for the Aurora Gold Mine require the Company to fulfill obligations and commitments over the twenty-year life of the agreements. The Company is in compliance in all material respects with all terms and conditions of the Mining Licence and Mineral Agreement for the Aurora Gold Mine. The Government of Guyana has the right to terminate the agreements in the event of default by written notice to the Company, subject to a dispute resolution process, followed by arbitration.

The Company has $4.0 million of capital commitments as at September 30, 2019.

In May 2018, the Company entered into an open-pit mining service contract with STRACON to meet higher mining requirements through to the end of 2021. The contract is priced at a fixed cost per Bank Cubic Meter (“BCM”) of material mined.

During July 2019, the Company’s fully owned Aurora mine entered into a fuel consignment agreement with Rubis Guyana Inc. (“Rubis”) for the next five years. Aurora mine will reimburse Rubis $1.1 million replacement cost of the equipment installed if this agreement is terminated.

From time to time, the Company may also be involved in legal proceedings that arise in the ordinary course of its business.



SUMMARY OF QUARTERLY FINANCIAL RESULTS

(Expressed in thousands of dollars except per share and ounce amounts). (Quarterly results are unaudited)

2019 2018 2017

Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4

Gold ounces produced6 22,100 37,300 36,600 39,100 41,200 31,300 38,800 47,300

Gold ounces sold 23,500 38,300 38,200 37,450 41,200 31,700 38,000 48,000

Metal sales $ 34,843 50,772 49,679 46,542 49,418 41,196 50,734 61,417

Cost of sales

Production costs 32,234 28,651 32,060 26,835 28,094 27,387 23,232 20,767

Royalty 2,777 4,049 3,963 3,713 3,939 3,285 4,046 4,898

Depreciation 8,785 12,817 13,645 10,545 7,420 5,357 7,467 10,412

Total cost of sales $ 43,796 45,517 49,668 41,093 39,453 36,029 34,745 36,077

(Loss) earnings from mine operations

(8,953) 5,255 11 5,449 9,965 5,167 15,989 25,340

Other expense, net7 3,499 9,808 4,494 3,633 6,821 4,714 4,178 4,789

Net finance (income) expense

(285) 629 (1,933) 5,763 376 (933) 363 (1,008)

Deferred tax (recovery) expense

(2,649) 1,197 (261) (1,915) 4,964 180 3,058 7,523

Net (loss) earnings $ (9,518) (6,379) (2,289) (2,032) (2,196) 1,206 8,390 14,036

Earnings (loss) per share:

Basic $ (0.06) (0.04) (0.01) (0.01) (0.01) 0.01 0.05 0.08

Diluted $ (0.06) (0.04) (0.01) (0.01) (0.01) 0.01 0.05 0.07

As at September 30, 2019, the Company’s operations comprise a single reporting operating segment engaged in mineral exploration, development and production in Guyana.

OUTSTANDING SHARE DATA

At the date of this MD&A, there are 174,564,184 issued and outstanding common shares of the Company. Options outstanding amounted to 2,486,174 at the date of this MD&A, each of which is exercisable to acquire one common share of the Company in accordance with the terms thereof.

6 Change in definition of calculating and reporting gold produced effective January 1, 2019. Refer to “Gold Produced – Change in Definition” section of this MD&A. 7 Includes corporate general and administrative expenses, exploration and evaluation expenses and restructuring expenses (as separately disclosed in the unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2019 and 2018).



NON-IFRS8 PERFORMANCE MEASURES

The Company has included certain non-IFRS performance measures in this MD&A. These measures are not defined under IFRS and should not be considered in isolation. The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. The inclusion of these measures is meant to provide additional information and should not be used as a substitute for performance measures prepared in accordance with IFRS. These measures are not necessarily standard and therefore may not be comparable to other issuers.

The Company has applied the World Gold Council’s November 2018 published guidance in reporting cash costs and AISC to its mining operations. Adoption of cash costs and AISC metrics is voluntary and not necessarily standard, and therefore, these measures presented by the Company may not be comparable to similar measures presented by other issuers. The Company believes that the cash costs and AISC measures complement existing measures reported by the Company.

TOTAL CASH COSTS PER OUNCE

Total cash costs are a common financial performance measure in the gold mining industry but with no standard meaning under IFRS. The Company reports total cash costs on a sales basis. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, such as sales, certain investors use this information to evaluate the Company’s performance and ability to generate operating earnings and cash flow from its mining operations. Management uses this metric as an important tool to monitor operating cost performance.

Total cash costs include production and royalty costs. Production costs include mining, processing, refining and transportation, and site administration, and in total are then divided by gold ounces sold to arrive at total cash costs per gold ounce sold. This measure also includes other mine related costs incurred such as mine standby costs and any current inventory write-downs. Production costs are exclusive of depreciation. Other companies may calculate these measures differently.

The following table reconciles these non-IFRS measures to the September 30, 2019 unaudited condensed interim consolidated statements of comprehensive income.

(in thousands of US dollars except ounces and per ounce calculations)

Three months ending

September 30


2019 2018 2019 2018

Production costs (cash costs) $ 32,234 $ 28,094 $ 92,945 $ 78,713

Divided by: Gold ounces sold 23,500 41,200 100,000 110,900

Total cash costs per ounce - before royalty $ 1,372 $ 682 $ 930 $ 710

Cash costs – above $ 32,234 $ 28,094 $ 92,945 $ 78,713

Add royalty costs 2,777 3,939 10,789 11,270

Total cash costs 35,011 32,033 103,734 89,983


Total cash costs per ounce $ 1,490 $ 778 $ 1,037 $ 811

8 IFRS – International Financial Reporting Standards



ALL-IN SUSTAINING COST PER OUNCE (“AISC”)

“All-in sustaining cost per ounce” is also a non-IFRS performance measure. The Company believes this measure more fully defines the total costs associated with producing gold; however, this performance measure has no standardized meaning. Accordingly, there may be some variation in the method of computation of AISC as determined by the Company compared with other mining companies. In this context, the Company calculates AISC as the sum of total cash costs (as described above), share-based compensation, corporate general and administrative expense, exploration and evaluation expenditures that are sustaining in nature (defined as brownfields exploration on the Company’s Mining Licence), reclamation cost accretion, sustaining capital including deferred stripping (defined in further detail below) and realized gains and losses on diesel derivative contracts, all divided by the gold ounces sold to arrive at a per ounce figure.

Sustaining capital expenditures are expenditures that do not increase annual gold ounce production at a mine site and excludes expenditures at the Company’s development projects as well as expenditures that are deemed expansionary in nature.

The following table reconciles these non-IFRS measures to the September 30, 2019 unaudited condensed interim consolidated financial statements.

(in thousands of US dollars except ounces and per ounce calculations)

Three months ending

September 30


2019 2018 2019 2018

Total cash cost - as above $ 35,011 $ 32,033 $ 103,734 $ 89,983

Sustaining capital9 11,452 11,211 43,599 20,661

Corporate general and administrative expenses10 1,945 1,949 6,531 7,868

Exploration and evaluation costs (sustaining) 745 471 961 1,261

Asset retirement obligation – accretion 85 15 113 15

Realized (gain) loss on diesel forward contracts11 - (566) (3,168) (1,411)

Write-down of working capital12 (5,015) (1,125) (5,315) (1,125)

All-in sustaining costs $ 44,223 $ 43,988 $ 146,455 $ 117,252


All-in sustaining costs per ounce $ 1,882 $ 1,068 $ 1,465 1,057

9 Sustaining capital is defined as all capital expenditures which do not result in a material increase in gold production and/or cash flow and exclude all expenditures at growth projects.

10 Corporate general and administrative expenses exclude shareholder activism costs.

11 Included in net finance expense in the unaudited Condensed Interim Consolidated Statements of Comprehensive Loss - See Note 15 to the unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2019 and 2018.

12 Included in production costs in the unaudited Condensed Interim Consolidated Statements of Comprehensive Loss – See Note 4 and 5 for write-down on value added receivables from the Government of Guyana and write-down on Materials and Supplies inventory, respectively, in the unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2019 and 2018



GOLD PRODUCED – CHANGE IN DEFINITION

As previously reported, effective January 1, 2019, the Company has changed its method of defining and reporting “gold produced”. Previously, gold produced was defined to be equal to the number of gold ounces poured during a reporting period. The new definition of “gold produced” is equal to tonnes milled multiplied by average mill head grade multiplied by recovery for a given period (Gold produced = tonnes milled * average mill head grade * average recovery).

As a result of the change in definition, comparative periods have been restated to reflect the new definition. The table below presents the revised and previously reported figures for gold ounces produced:

2018 2017 2016

Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1

Gold produced – as currently reported 39,100 41,200 31,300 38,800 47,300 41,500 29,600 42,300 43,500 33,900 32,700 40,100

Gold produced – as previously reported

42,750 41,000 28,250 38,500 48,900 41,000 29,700 40,900 43,800 34,400 32,100 41,300

ADDITIONAL NON-IFRS FINANCIAL PERFORMANCE MEASURES

The Company has included the additional non-IFRS measure “Earnings from mine operations” in the condensed interim consolidated financial statements. Management believes that that “Earnings from mine operations” provides useful information to investors as an indication of the Company’s principal business activities before consideration of how those activities are financed, and before sustaining capital expenditures, corporate general and administrative expenses, exploration and evaluation expenses, stock-based compensation, non-mine related depreciation, net finance expenses and taxation.

RISK FACTORS

The following list is a summary of existing and future material risks to the business of the Company. Each of the Company’s major risk factors are discussed in more detail in the Company’s most recent Annual Information Form (“AIF”) for the year ended December 31, 2018 on the Company’s website and filed with the Canadian securities regulatory authorities at www.sedar.com.

The risks below are not listed in any particular order and are not exhaustive. Additional risks and uncertainties not currently known to the Company, or those that it currently deems to be immaterial, may become material and adversely affect the Company’s business. The realization of any of these risks may materially and adversely affect the Company’s business, financial condition, results of operations and/or the market price of the Company’s securities.

• Exploration, Development and Operating Risks

• Licencing Matters

• Geotechnical Risks

• Open Pit Mine Risks

• Underground Mine Risks

• Mineral Processing Risks

• Infrastructure Risks

• Insurance and Uninsured Risks

• Environmental Risks and Hazards

http://www.sedar.com/



• Uncertainty Relating to Mineral Resources

• Reliability of Resource and Reserve Estimates

• Uncertainty of Feasibility Study Results & Revisions to Estimates

• Mine Closure

• Limited History of Mineral Production

• Land Title

• Global Financial Conditions

• Competition May Hinder Corporate Growth

• Production and Cost Estimates

• Additional Capital

• Dilution

• Commodity Prices

• Indebtedness and Inability to Satisfy Repayment Obligations

• Interest Rate Fluctuations

• Exchange Rate Fluctuations

• Government Regulation

• Territorial Risk

• Political Risks

• Labour and Employment Matters, including employee-initiated work stoppages

• Subsidiaries

• Market Price of Common Shares

• Future Sales of Common Shares by Existing Shareholders

• Dependence on Management and Key Personnel

• Competition

• Shortages and Price Volatility of Input Commodities and Equipment

• Hedging Risk

• Conflicts of Interest

• Cyber Security Threats

• Compliance with Anti-Corruption Laws

• Limited History of Earnings or Dividends

• Accounting Policies and Internal Control

• Proposed Transactions

• Related Party Transactions

FORWARD-LOOKING STATEMENTS

Except for statements of historical fact relating to Guyana Goldfields, certain information contained in this MD&A constitutes “forward-looking information” under Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the potential of the Company’s properties and investments; the future price of gold; expected operating cash flows and capital costs for the Aurora Gold Mine; production and cost guidance for 2019; success, nature and timing of exploration and development activities; timing and anticipated costs and benefits of mill expansion and mine plan optimization activities, cost and timing of future exploration and development; the estimation of Mineral Resources and Reserves and any anticipated upside potential thereof; conclusions of economic evaluations; successful and profitable operations of the Aurora Gold Mine, including the impact of the 2019 Optimization Life of Mine Plan or the life of mine plan review currently underway; the Company’s ability to meet its most significant near-term liquidity and operating requirements,



including operating requirements through 2020; the ability of the Company to manage its exposure to fluctuations in the price of diesel; requirements for additional capital, mine expansion plans, underground development, expected improvements in mining, processing and general and administrative costs as well as proposed expanded exploration activities and related costs and other potential opportunistic investments in 2019, and other statements relating to the financial and business prospects of Guyana Goldfields. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “likely”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, and are inherently subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to risks related to:

• the Company’s ability to meet significant near-term liquidity and operation requirements;

• the Company’s ability to achieve its production, cash cost and all-in sustaining cost guidance for 2019;

• risks of increases in the anticipated total capital and operating costs relating to commercial production for the Aurora Gold Mine and the Company’s ability to meet such costs;

• the timing and amounts of expected cash outflows, and expected sales of gold, relating to profitable operations at the Aurora Gold Mine;

• expectations that the positive reconciliation between actual tonnes mined versus the Mineral Reserve model at the Aurora Gold Mine will continue;

• conducting mining operations, any of which could result in damage to, or destruction of, mines and other producing facilities, damage to life or property, environmental damage and possible legal liability, including the adverse impact on the Company’s cash flows;

• risks related to exploration, development and conducting mining operations, any of which could result in damage to, or destruction of, mines and other producing facilities, damage to life or property, environmental damage and possible legal liability, including the adverse impact on the Company’s cash flows;

• the success of derivative transactions to establish a ceiling for a portion of the Company’s future diesel fuel purchases;

• unusual or unexpected geological formations encountered during development and/or mining operations;

• unanticipated operating events which can reduce production or cause production to be shut down or delayed;

• the fact that the Aurora Gold Mine is located in a region that is subject to significant annual rainfall that could impact mining operations;

• the risk that insurance may not be available to Guyana Goldfields on reasonable terms or at all;

• adherence to the terms and condition of the Mineral Agreement and Mining Licence with respect to the Aurora Gold Mine;

• uncertain political and economic environments;

• environmental hazards and industrial accidents;

• unionization of its work force in Guyana;

• governmental regulation, political stability in the regions in which the Company operates and environmental liability;



• management’s expectations that requisite licenses and permits will be available upon terms acceptable to the Company;

• access and supply risks;

• reliance on key personnel;

• risks that mill optimization efforts, efforts to increase mill capacity and other proposed improvements in mining and processing may not be as effective as proposed, or at all;

• risks related to disputes concerning property titles and interests;

• risks relating to changes in project parameters as plans continue to be redefined, including the possibility that mining, exploration and development operations at the Aurora Gold Mine and other exploration activities may not progress as currently proposed, and funds may be reallocated on a going forward basis;

• risks relating to variations and uncertainties in the estimation of Mineral Resources and Mineral Reserves, grade or recovery rates resulting from exploration and development activities (including risks that new Mineral Resources/Mineral Reserves may not be established, or existing Mineral Resources/Mineral Reserves may not be realized), with respect to both the properties and investments of the Company;

• risks relating to changes in gold prices and the worldwide demand for and supply of gold. Fluctuation in the price for gold may adversely affect the Company’s ability to obtain additional financing and influence the course of action taken in operating the Aurora Gold Mine;

• risks related to increased competition in the mining industry generally;

• risks related to current global financial conditions;

• uncertain political and economic environments;

• the Company’s goal of creating shareholder value by concentrating on the acquisition, development and exploration of properties that have the potential to contain economic gold deposits;

• ability to source new, additional or replacement financing through other share or debt issuances in support of the Aurora Gold Mine, corporate general and administrative expenses, and exploration activities;

• future plans for the Aurora Gold Mine and other property interests held by the Company or which may be acquired on a going forward basis, if at all; and

• management’s outlook regarding future trends, outlook and activities, including the ability of Guyana Goldfields to generate sufficient cash flow to cover operating requirements for the next 12 months.

Forward-looking information is also subject to the risks further described in the Company’s Annual Information Form for its most recently completed year. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws. Accordingly, readers should not place undue reliance on forward-looking information.

TECHNICAL INFORMATION

INFORMATION CONCERNING ESTIMATES OF MEASURED, INDICATED AND INFERRED RESOURCES

The Mineral Reserve and Mineral Resource estimates in respect of the Company’s property interests were prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”), as required by Canadian securities regulatory authorities. For United States reporting purposes, the United States Securities and Exchange Commission (“SEC”) applies different standards in order to classify mineralization



as a reserve. In particular, while the terms “measured,” “indicated” and “inferred” Mineral Resources are required pursuant to NI 43-101, the SEC does not recognize such terms. Canadian standards differ significantly from the requirements of the SEC. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories constitute or will ever be converted into reserves. In addition, “inferred” Mineral Resources have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian securities laws, issuers must not make any disclosure of results of an economic analysis that includes inferred Mineral Resources, except in rare cases.

ACCOUNTING DISCLOSURES

NATIONAL INSTRUMENT 52-109 DISCLOSURE

The Company’s interim Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) are responsible for establishing and maintaining disclosure controls and procedures (“DC&P”) and internal controls over financial reporting (“ICFR”), as those terms are defined in National Instrument 52-109 for the Company. The Company’s controls are based on the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) (2013) framework.

The Company’s CEO and CFO certify that the Company’s DC&P have been designed to provide reasonable assurance that material information relating to the Company is made known to them by others, particularly during the period in which interim filings are being prepared; and information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation. They also certify that the Company’s ICFR have been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.

During the current period there have been no changes in the Company’s DC&P or ICFR that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company’s management, including the CEO and CFO, believe that any disclosure controls and procedures and internal controls over financial reporting, no matter how well designed, can have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance that the objectives of the control system are met.

CHANGES IN SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The Company describes its significant accounting policies as well as any changes in accounting policies in Note 2 “Basis of Presentation and Significant Accounting Policies” and Note 20 “IFRS 16 Transition Adjustment” of the September 30, 2019 Unaudited Condensed Interim Consolidation Financial Statements. No significant changes in accounting policies have occurred other than the implementation of new International Financial Reporting Standards as issued by the International Accounting Standards Board and Interpretations of the International Financial Reporting Interpretations Committee.

Areas of judgment that have the most significant effect on the amounts recognized in the Company’s financial statements are disclosed in Note 4 of the Company’s consolidated financial statements for the year ended December 31, 2018.

Documents

GUYANA GOLDFIELDS INC....Guyana Goldfields is a Canadian‐based company engaged in the investment, acquisition, exploration, development and operation of mineral property interests,