Rye Patch Gold RPMGD

MD&A?Financials on Sedar.com

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Outlook and Summary In the first quarter of this year the Company’s primary goal was to complete the construction at the Florida Canyon Mine, acquired in July 2016 and successfully advance the ramp-up of production. Loading of ore to the pad commenced in December 2016 and has been on-going, building gold inventory on the South Heap Leach Pad. Approval to commence irrigation was received in March 2017 and the first application of cyanide solution was made in mid-April. Benefitting from the short leach cycle the first symbolic gold was poured toward the end of April. The project is ramping up toward commercial production which is expected in the third quarter of 2017. During the second quarter the operating team will continue to work through any start-up issues and gradually bring the mine up to its design capacity and ensure it is performing on a regular and consistent basis. Commensurate with this, gold recovery will increase, construction costs will tail-off, and operating costs will normalize. Once satisfactory levels of performance are achieved, the Company will confirm commercial production with the goal of reporting first operating numbers in the third quarter 2017. Once commercial production is established, the Company will commence exploration drilling, initially looking at adding resource ounces in and around the Florida Canyon Mine and begin the detailed economic studies required to support the proposed production expansion. From this work, Rye Patch anticipates delivering a feasibility-level document that would include a revised resource estimate and the proposal for the potential mine expansion. In the medium term, the Company anticipates increasing exploration and resource expansion drilling within the Florida Canyon mine and at the Lincoln Hill and Wilco properties located 20- and 30-kilometres to the south. The approval of the Environmental Assessment, (submitted 2014) on our Lincoln Hill property is expected in the latter half of 2017 and will allow for a bulk sample and in-fill drilling to upgrade the current Lincoln Hill resource and exploration drilling to continue at two highquality satellite targets – Independence Hill and Gold Ridge – to expand the Lincoln Hill resource. The programs are designed to move the project toward a production decision. The longer-term objective is to continue to expand the company wide resource base in tandem with a steady increase in production with an initial goal of achieving mid-tier production status. On an ongoing basis, the Company continues to review other property and corporate opportunities to add value.