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REG TECHNOLOGIES INC.

Suite 240 – 1170 Hammersmith Way

Richmond, BC V7A 5E9

Tel: 604.278-5996

Fax: 604.278.3409

August 29, 2011

MANAGEMENT DISCUSSION & ANALYSIS

This annual management report of Reg Technologies Inc. (“Reg” or the “Company”) is an addition and

supplement to the audited consolidated financial statements for the fiscal years ended April 30, 2011 and

2010, and should be read in conjunction with those statements, which were prepared in accordance with

Canadian generally accepted accounting principles (GAAP). This management report presents the views

of Management on current Company activities and on the annual financial results, as well as a preview of

activities during the coming fiscal year.

FORWARD LOOKING STATEMENTS

Certain statements contained in this MD&A using the terms “may”, “expects to”, “projects”, “estimates”,

“plans”, and other terms denoting future possibilities, including our expectations and objectives, are

forward-looking statements in respect to various issues including upcoming events based upon current

expectations, which involve risks and uncertainties that could cause actual outcomes and results to differ

materially. These statements reflect the current views of management with respect to future events and

are subject to risks, uncertainties and other factors. Our actual results, performance or achievements

could differ materially from those expressed in, or implied by, these forward-looking statements,

including those described in our financial statements, Management’s Discussion & Analysis and Material

Change Reports filed with the Canadian Securities Administrators. Accordingly, no assurances can be

given that any of the events anticipated by the forward-looking statements will transpire or occur, or if

any of them do so, what benefits, including the amount of proceeds, that we will derive therefrom.

All subsequent forward-looking statements, whether written or oral, attributable to our company or

persons acting on our behalf are expressly qualified in their entirety by these cautionary statements.

Overview

We are a development stage company engaged in the business of developing and commercially exploiting

an improved axial vane-type rotary engine known as the RadMax™ rotary technology (the “Technology”

or the “RadMax Engine”), used in the design of lightweight and high efficiency engines, compressors and

pumps. Since no marketable product has yet been developed, we have not received any revenues from

operations.

In July, 2010 we incorporated our 80% owned subsidiary Minewest Gold and Silver Corp. Inc.

(“Minewest”), a private company incorporated in British Columbia for the purpose of acquiring and

exploring mineral properties. During the year ended April 30, 2011, we transferred to Minewest our

100% ownership in our undivided 50% interest subject to a 5% net smelter return in 33 mining claims

(the “Silverknife Property”) in the Tootsee River area of the province of British Columbia for cash

payment of $25,000 and issuance of 8,000,000 common shares of Minewest. Effective December 15,

2010 Minewest purchased 100% of Rapitan Resources Inc.’s ownership in 25% interest of the Silverknife

Property for cash payment of $10,000 and issuance of 2,0000,000 common shares of Minewest.

The Company is planning on a distribution of its holdings of common shares of Minewest to its

shareholders on a 7 to 1 basis – for every seven shares of the Company the shareholder will receive one

share of Minewest.

We are a reporting issuer in British Columbia and Alberta and trade on the TSX Venture Exchange (the

(“TSX.V”) under the symbol “RRE”. We are also listed on the OTC BB under the symbol “REGRF”.

The RadMax™ Rotary Technology

The worldwide marketing and intellectual rights to the Technology, other than in the US, are held by us

and REGI owns the US marketing and intellectual rights. We own 28.75 million shares of REGI,

representing an 11.75% interest. We have a project cost sharing agreement with REGI whereby we each

fund 50% of the costs of developing the Technology.

Based upon testing work performed by independent organizations on prototype models, we believe that

the RadMax Engine holds significant potential in a number of other applications ranging from small

stationary equipment to automobiles and aircraft. In additional to its potential use as an internal

combustion engine, the RadMax Engine design is being employed in the development of several types of

compressors, pumps, expanders and other applications. The mechanism can be scaled to match virtually

any size requirement.

To date, several prototypes of the RadMax Engine have been tested and additional development and

testing work is continuing. We believe that such development and testing will continue until a

commercially feasible design is perfected. There is no assurance at this time, however, that such a

commercially feasible design will ever be perfected, or if it is, that it will become profitable. If a

commercially feasible design is perfected, we do, however, expect to derive revenues from licensing the

Technology, regardless of whether actual commercial production is ever achieved. There is no assurance

at this time, however, that revenues will ever be received from licensing the Technology, even if it does

prove to be commercially feasible.

Based on the market potential, we believe the RadMax Engine is well suited for application to internal

combustion engines, pumps, compressors and expansion engines.

The RadMax Engine must be technologically superior to other engines that competitors offer and must

have a competitive price/performance ratio to adequately penetrate its potential markets. A number of

rotary engines have been designed over the past 80 years but only one, the Wankel, has been able to

achieve mechanical practicality and any significant market acceptance.

We have tested the RadMax Engine technology for interested customers. To date, we have granted an

option for a license for certain applications to a Fortune 1000 company, which has evaluated the

RadMaxEngine design and assisted in the development and testing at no cost to us. On December 31,

2010 the option agreement expired without being exercise.

RadMax™ Engine

Based on a review of published industry literature by our thermodymanics engineer, Dr. Allen

MacKnight, PhD., we believe that the RadMax Engine could achieve improved fuel consumption when

compared to gasoline and turbine engines. Specifically, a given volume of diesel fuel contains

approximately 30% more energy that the same volume of gasoline and diesel engines consume

approximately 0.4 pounds of fuel for every horsepower hour. As a point of reference, all turbine engines

consume approximately 0.8 pounds of fuel for every horsepower hour.

To bring the RadMax Engine from concept to reality, a number of milestones, or steps, are required for

ultimate qualification. These start with concept drawings and presentations, and lead to testing by

independent agencies to validate the emissions, horsepower, and other critical metrics.

Together with REGI, we have been working with a Fortune 1000 company since April 2008 in evaluating

and considering technical solutions in developing the RadMax Engine application based on a

specification of its industry partner. Under the terms of a confidentiality agreement, we are prohibited

from publishing the name of the partner or discussing the partner’s specific application.

The agreement gives the Fortune 1000 company an option for 90 days after the completion of the

evaluation period to enter into a letter of intent for exclusive commercial and military markets. They have

a period of 12 months after completion of the evaluation period to enter into a letter of intent for a non-

exclusive license for the RadMax Engine for certain commercial and military markets. This agreement

expired on December 31, 2010.

We retained Belcan Engineering Services of Phoenix, AZ to review the Fortune 1000 diesel engine

design before production of the prototype, which review was to help to ensure a streamlined and timely

fabrication process. Following the design review, the next step will be to fabricate RadMax Engine parts

and assemblies, validate assembly operations, and conduct component, assembly, and system tests. After

multiple technical meetings with Belcan Engineering Services, the following results have been

accomplished:

* familiarization with the RadMax Engine baseline design, including mechanical operation,

friction;

* contributors and sealing approach;

* shared understanding of the vane actuation system;

* determination of vane loads in compressor and engine applications;

* preliminary evaluation of thermodynamics and determination of potential hot spots;

* evaluation of compression ratio, and recommendations for design modifications; and

* assessment of all bearings – main bearings which control all rotating components, linear

bearings which control the vane actuators, and journal bearings which facilitate wheel

operations on the fixed stators.

Belcan’s technical assignment was to optimize the design of the diesel engine application which

comprises the vanes, push rods, and a lift block that interface with a stator. The review of the RadMax

Engine thermodynamics and vane-actuation systems were performed first. All recommendations

resulting from these reviews were evaluated and changes into the RadMax Engine baseline were

incorporated as appropriate.

The design review covered thermodynamic engineering work, material selections, sealing solutions,

component geometry, mechanical integration, operating limitations and a vital assembly review.

The resultant thermodynamics report included recommendations for RadMax Engine materials,

thicknesses, tolerances, and coatings. One specific recommendation is to fabricate the cam using lighter

weight materials to take advantage of its improved thermal conductivity.

In June 2010, REGI met with representatives of the Fortune 1000 company and conducted a review of the

engine analysis, design, and fabrication plans. At the completion of the review, we announced that the

design review indicates the acceptance of the demonstration RadMax Engine, subject to a few minor

action items that have since been resolved. The objective of the review was to obtain approval to

commence fabrication of the demonstration diesel engine. A revised drawing package and computer

models of the updated components were submitted to the Fortune 1000 Company for final review.

On August 12, 2010, following two years of technical assessments and design reviews, the engineering

team confirmed that the RadMax Engine engineering drawings were complete, additional technical

reviews were not necessary and we would proceed with building the RadMax demonstration prototype.

Commercial item procurement, parts fabrication and preparation for prototype testing are underway. Our

target is to complete prototype fabrication and start initial testing early 2011 after completion of our

planned financing. This event represents the completion of another significant milestone.

After completion of our Request for Proposals to three pre-qualified bidders to provide a fixed-price

quotation we selected Path Technologies Inc. (“Path Tech”), of Painesville, Ohio, to fabricate the

prototype RadMax Engine. Upon the commencement of the fabrication stage, we will integrate those

parts, along with other commercial items (fuel injection, for example) to produce the prototype engine.

In February, 2011, we paid Path Technologies for the purchase order to commence fabrication to

complete the cam and actuator for the RadMax™ demonstration diesel engine model.

On March 8, 2011 we provided a fabrication progress report of the RadMax™ assembly via news release,

reporting the initial fabrication progress is as follows:

* All specified material has been ordered

* All connecting tubes have been final machined to their outside and inside geometric tolerances

* The connecting tubes have been masked for subcontracted flame spray plating services

* Each of the 24 vane blocks have been trued, which means three axis sides are perfectly parallel to

their opposite sides and perpendicular to each other

* The outside dimensions of the vane portion has been fabricated in a wire EDM Process

Following completion of the vanes, flame spray plating of the connecting tubes, fabrication of the apex

seals, wheel assemblies, and attaching parts, the actuator components will be ready for sub component

testing.

Next components planned for fabrication are the cam assemblies, rotor assemblies, stator assemblies, and

enclosure assemblies. Following each of these fabrications the components will be tested. Upon

successful testing of the components the entire RadMax™ engine will be prepared for friction testing,

lubrication flow testing, cooling flow testing, and compression testing.

Upon successful completion of the entirety of tests performed on the RadMax™ engine, fuel and engine

certification tests will be conducted by an independent recognized facility.

During May, 2011 we received our second fabrication progress report for the prototype RadMax™ Diesel

Engine whereby we estimated that approximately one-third of all fabrication work was complete. The

fabrication progress in May was as follows:

* The Rotors have completed their first-pass rough turning process within .030-inch of final. As of

this report, the following Rotor fabrication operations have been completed: Outer surface, Neck,

Driveshaft Slot, and Combustion Chamber.

* The Cams have completed their initial rough turning passes. The reason for the two pass turning

process is because the metal “moves” (stretches or deforms) after the machining process. To

maintain our high-tolerance requirements, the two-passes are required.

* Fabrication of the 24 Vane-Actuator assemblies is complete. This includes completion of the

Vanes, Connecting Tubes, Axles, Wheels, Wrist Pins, and integration with commercial wheel

bearings.

During August, 2011 we had successful transfer directly from 3D cad model to CNC machine code for

the prototype RadMax™ Diesel Engine.

This was a significant event, as we proved our capability to go from 3D computer models of the cam

surface to deriving the cutter path for the CNC milling center and fabricating the complex cam surface.

Consultants at Path Technologies believe that 95% of the fabrication of the parts is estimated to be

completed by early September 2011. In prior technological stages, machine readable flat files comprised

of many thousands of points with x, y, and z coordinates were required to be loaded into CNC machines

with the process verified with human-entered corrections and multiple test pieces fabricated before a final

prototype product was achieved.

This successful transfer applies directly to the RadMax cam and stator surfaces; both of which are

implementations of complex transcendental formulas.

A detailed thermodynamic analysis of the patented RadMax engine was performed last year in

conjunction with Belcan Engineering Services. As a result, the cam is fabricated from lightweight aircraft

Aluminum and weighs approximately 12 pounds. This is in sharp contrast to earlier implementations in

steel that weighed more than 50 pounds each. This capability is one of the major contributing factors to

RadMax engine weight reduction, which naturally leads to enhanced fuel economy in every application.

RadMax™ Pump

We actively pursued the development of the RadMax™ Pump from early 2007 until March 2008. From

September 2007 until March 2008, we worked with an industry partner in the water pump industry. The

partner evaluated the pump as a potential new product offering as part of its fire engine chemical

dispersant product line. The evaluation and test period ended when the partner had a change in its senior

management and their leading advocate left the company. Until there is further interest established in the

RadMax™ Pump by an end user, no further work is anticipated.

RadMax Compressor

We then focused our technical resources on validating the seals for a compressor application, leading

towards the technology incorporation in the RadMax Engine.

In February 2009 the pump was set up in our Richmond, B.C. laboratory, for demonstration to interested

parties. It is a fully functional prototype capable of pumping twice its internal volume every revolution.

Future development would take the form of customization based on interest from another industry

partner. Commercialization requires tooling to significantly reduce the cost of the pump in a production

environment.

We actively pursued the development of high pressure metal seals using the RadMax™ Compressor from

July 2007 until September 2007. The technical concept of high pressure metal seals was validated in a

prototype compressor test bed that was fabricated from residual hardware. There was no immediate

interest by an industry partner to enter intoa joint development of the RadMax™ Compressor. Until there

is further interest established in the RadMax™ Compressor by an end user, no further work will be

conducted.

The Silverknife Property

The Silverknife property represents a zone of known Ag-Zn-Pb mineralization distal to, and

stratigraphically lower than the Silvertip deposit and more proximate to the Cassiar Batholith (a potential

mineralizing heat source in the district). Paul D. Gray, P.Geo., author of the 43-101 report on the

Silverknife property, believes the most relevant targets for mineral exploration on the Silverknife

Property are associated chimney-type feeder systems and mantos related to the Silvertip mineralizing

event.

To date, there has been insufficient exploration work conducted to adequately define these potential

targets and it is uncertain if such targets will be discovered. However, the fact the mineralization has been

identified and overlaps onto the Silvertip property is a compelling reason to explore for additional zones

of mineralization on the Silverknife Property.

In 1983, the Silverknife Property was staked and from 1984-1988 Reg Resources Corp. and Chevron

Minerals Inc. a staged series of mineral exploration programs were conducted. Geochemistry and

geophysics were the primary initial (1983-1985) exploration tools applied to Property, and following on a

number of anomalies discovered in 1985 a 30 hole diamond drill program was completed. Based on this

first phase drilling, a “Discovery Zone” of silver-zinclead mineralization was uncovered.

Overall Performance

We are a technology development and mineral exploration company engaged in developing and

commercially exploiting an improved axial vane type rotary engine. Our subsidiary Minewest is engaged

in the acquisition and exploration of mineral properties. Our expenditures are incurred on research and

development of our technology, as well as acquiring mineral properties and carrying out exploration

work. We do not have any producing mineral properties at this time, and our technologies are not yet

commercially viable. The recoverability of amounts shown for investments, mineral properties, and the

related deferred expenditures is dependent upon the existence of economically recoverable reserves, the

ability to obtain the necessary financing to complete the exploration, the profitability of future production

or our ability to dispose of those assets on a profitable basis. Our ongoing operation is dependent upon

cash flow from loans and equity financing.

Results of Operations

Unless otherwise noted, all currency amounts are stated in Canadian dollars.

The following table summarizes selected financial data for the Company for each of the three most

recently completed financial years. The information set forth below should be read in conjunction with

the consolidated audited financial statements, prepared in accordance with Canadian generally accepted

accounting principles, and the related notes thereto.

Year ended

Year Ended

April 30, 2011

April 30, 2010 April 30, 2009

Total Revenue

General and administrative expenses

502,803

689,666

785,625

Gain on sale of investee shares

102,966

142,815

347,099

Net gain on expiration and modification of

126,404

6,971

financial instrument liability

Unrealized gain on financial instrument liability

5,872

62,916

14,815

Net loss:

- Total

(246,000)

(454,902)

(456,090)

- Basic and diluted loss per Share

(0.01)

(0.02)

We have generated no revenue from our operations. We have incurred a loss of $257,244 in the year

ended April 30, 2011 (2010 - $454,902).

Significant changes from 2010 to 2011 are as follows:

* In 2011 we had a convertible debenture of principal amount of $50,000. Interest expense of

$10,894 was recorded on the loan during the period, while we did not have such debt or related

interest expense in 2010;

* We decreased shareholder communication expenses from $82,026 in 2010 to $41,106 in 2011

due to our continued utilization of efficient channels for shareholder communication during the

weak world economy;

* From 2010 to 2011 office expenses decreased from $33,719 to $27,286, professional fees

decreased from $105,851 to $99,670, and travel and promotion decreased from $15,211 to 7,605,

all due to our continuing effort to streamline our operations and share costs with our associated

companies;

* Transfer agent and filing fees decreased from $26,925 in 2011 to $15,101 in 2010 due to our

lowered equity financing activities in 2011;

* We had net mineral property maintenance costs of $7,254 in 2011 instead of costs of $8,060 in

2010 due to reimbursement by Teryl Resources Inc. for their portion of the property maintenance

costs;

* Research and development expenses decreased from $227,402 in 2010 to $107,700 in 2011,

because we have reached a stage where one of the research members’ work was not required in

2011 as much as in 2010;

* Wages and benefits increased slightly from $22,541 in 2010 to $26,750 in 2011 due to our

severance pay while we streamline our office operations;

* In 2010 we had stock based compensation for options granted of $31,987; in 2011 has stock

based compensation of $20,296;

* In 2010 we recorded stock-based compensation of $1,348 for vesting of 25% of the 50,000 stock

options granted to a consultant; while in 2011 we recorded stock-based compensation of $20,296

for vesting of 25% of the 750,000 options granted to our president while his old options expired,

and $69,480 for the 2,195,000 warrants extension.

* Management and director fees increased from $54,700 in 2010 to $61,200 in 2011 and consulting

fees increased from $16,542 in 2010 to $32,209, as a result of services provided for our new

subsidiary Minewest incorporated in 2011.

In 2010 we recognized a gain of $142,815 on private sale of our holdings of REGI shares when the shares

were transferred to the purchasers; in 2011 we recognized the gain of $102,966. The difference is largely

due to the fact that we sold fewer REGI shares in 2011 (485,300 shares) than in 2010 (621,725 shares).

We recorded a net gain of $126,404 in 2011 and $6,971 in 2010 on expiration and modification of

warrants issued for purchase of our REGI shares, due to the fact that most of the warrants issued in 2010

expired in 2011.

Unrealized gain on our warrants for issued for our REGI shares were recorded at $62,916 in 2010 and

$5,872 in 2011, largely because we had fewer such warrants outstanding at the end of 2011 than at the

end of 2010.

Summary of Quarterly Results

The following is a summary of our financial results of eight of our most recently completed quarters:

Three

months months

months

Months

Description

ended

Apr.30, Jan.31,

Oct. 31,

July 31, April 30, Jan. 31,

Oct. 31,

July 31,

2011

2010

2009

Net Revenues

Income or

loss before

other items

Total

(192,754) (117,920)

(92,486)

(99,643) (177,367) (185,081) (167,292)

(159,926)

Per share

(0.00)

(0.02)

(0.004)

(0.006)

(0.00)

Net loss for

period

Total

(64,049) (117,920)

(23,502)

(61,898) (113,407) (105,852) (157,669)

(77,974)

Per share

(0.00)

(0.02)

(0.004)

(0.006)

(0.00)

As we are a development stage company, variances by quarter reflect overall corporate activity and are

also impacted by factors which are not recurring each quarter, such as research and development costs

and financing costs.

The fluctuations in net loss are mainly due to the difficulties faced by small companies when it comes to

raising funds in the current economic climate. When a financing is completed, expenditures rise,

increasing the net loss. As those funds are allocated, expenditures decline, reducing the net loss.

Liquidity and Capital Resources

As of April 30, 2011 we had a cash position of $88,684, compared to $364 as at the year ended April 30,

2010, representing a significant increase of $88,320. As at April 30, 2011, we had a working capital of

$678,684, compared to a working capital of $219,216 as at April 30, 2010.

During the year ended April 30, 2011 we issued a convertible debenture for $50,000, which bears interest

at 8% per annum, payable monthly, is unsecured and due on June 1, 2011. The unpaid amount of

principal can be converted at any time at the holder’s option into common shares at a price of $0.20 per

share. We had the option to repay the principal and accrued interest before the due date with 30 days

advance notice. We repaid principal of $30,000 during February, 2011.

During the year ended April 30, 2011, we issued 1,894,333 common shares for gross proceeds of

$272,187.

During the year ended April 30, 2011, we raised $289,200 from sale of our private placement

subscriptions and those of our 80% owned subsidiary Minewest.

During the year ended April 30, 2011, we raised $76,466 from sale of our holdings of REGI shares and

warrants for purchase of REGI shares from us.

We are owed $865,607 by REGI, includes REGI’s 50% share of recent project costs for the RadMax

Engine pursuant to the project cost sharing agreement. REGI currently lacks the liquidity to fund its

share of the costs.

We are still in the development stage of our business and expect to continue with research and

development activities and mineral exploration activities for the near future. We do not expect to

generate significant revenues in the near future and will have to continue to rely upon the sale of equity

securities to raise capital or shareholder loans. Fluctuations in our share price may affect our ability to

obtain future financing and the rate of dilution to existing shareholders.

We have no funding commitments or arrangements for additional financing at this time and there is no

assurance that we will be able to obtain any additional financing on terms acceptable to us, if at all. Any

additional funds raised will be used for general and administrative expenses, and to continue with our

research and development activities. The quantity of funds to be raised and the terms of any equity

financing that may be undertaken will be negotiated by management as opportunities to raise funds arise.

We estimate that we will require approximately $250,000 to fund our general and administrative expenses

for the next twelve months. We will also require approximately $250,000 to fund our share of the costs

for the RadMax Engine, being the master design integrator, prototype fabrication and labour expense.

The quantity of funds to be raised and the terms of any equity financing that may be undertaken will be

negotiated by management as opportunities to raise funds arise.

Since its incorporation, the Company has financed its operations almost exclusively through the sale of its

common shares to investors and by borrowing from related parties. The Company expects to finance

operations through the sale of equity in the foreseeable future as it generates limited revenue from

business operations. There is no guarantee that the Company will be successful in arranging financing on

acceptable terms. To a significant extent, the Company’s ability to raise capital is affected by trends and

uncertainties beyond its control. These include the market prices for base and precious metals and results

from the Company’s exploration program. The Company’s ability to attain its business objectives may be

significantly impaired if the technologies cannot be commercialized or prices for metals fall or if results

from exploration programs on its properties are unsuccessful.

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as

a going concern in order to pursue the exploration of its mineral claims and to maintain a flexible capital

structure for its projects for the benefit of its stakeholders. As the Company is not earning significant

revenues from operations, its principal source of funds is from the issuance of common shares.

Transactions with Related Parties

During the years ended April 30, 2011 and 2010, we entered into the following transactions with and had

the following balances owed by or to related parties:

* At April 30, 2011, the Company is owed an aggregate of $8,490 (2010 - $28,455) by related

parties and owed an aggregate of $218,878 (2010 - $146,741) to related parties. The amounts

owed are unsecured, non-interest bearing and due on demand. These parties are companies that

the President of the Company controls or significantly influences.

* During the year ended April 30, 2011, rent of $15,680 (2010 - $10,181) incurred with a company

that the President of the Company controls.

* During the year ended April 30, 2011, management fees of $30,000 (2010 - $32,500) were

incurred to a company of which the President is a director.

* During the year ended April 30, 2011, research and development costs of $75,000 (2010 -

$63,300) were paid to a company controlled by Mr. Robert Grisar, a director of the Company.

* During the year ended April 30, 2011, management and directors’ fees of $31,200 (2010 -

$22,200) were paid to officers, directors and companies controlled by officers and directors for

services rendered.

These transactions are in the normal course of operations and are measured at the exchange amount of

consideration established and agreed to by all the related parties. Amounts due from and to related parties

are unsecured, non-interest bearing and due on demand.

Financial Instruments & Other Instruments

Foreign exchange risk

The Company is primarily exposed to currency fluctuations relative to the Canadian dollar through

expenditures that are denominated in US dollars. Also, the Company is exposed to the impact of

currency fluctuations on its monetary assets and liabilities.

The operating results and the financial position of the Company are reported in Canadian dollars.

Fluctuations in exchange rates will, consequently, have an impact upon the reported operations of the

Company and may affect the value of the Company’s assets and liabilities.

The Company currently does not enter into financial instruments to manage foreign exchange risk.

The Company is exposed to foreign currency risk through the following financial assets and liabilities

that are denominated in United States dollars:

Advances to

Equity

Due to

Accounted

Accounts

April 30, 2011

Cash

Related Party

Investee

Payable

(1,023)

3,465

604,869

21,745

At April 30, 2011 with other variables unchanged, a +/-10% change in exchange rates would

increase/decrease pre-tax loss by approximately +/- $63,110.

Interest rate and credit risk

The Company has minimal cash balances and no interest-bearing debt. The Company has no

significant concentrations of credit risk arising from operations. The Company's current policy is to

invest any significant excess cash in investment-grade short-term deposit certificates issued by

reputable financial institutions with which it keeps its bank accounts and management believes the

risk of loss to be remote. The Company periodically monitors the investments it makes and is

satisfied with the credit ratings of its banks.

Receivables consist of goods and services tax due from the Federal Government. Management

believes that the credit risk concentration with respect to receivables is remote.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they

fall due. The Company manages liquidity risk through the management of its capital structure and

financial leverage.

Fair Value Measurement

The Canadian Institute of Chartered Accountants (“CICA”) Handbook Section 3862 “Financial

Instruments Disclosures” requires disclosure of a three-level hierarchy for fair value measurements based

upon the significance of inputs used in making fair value measurements as follows:

* Level 1 – quoted prices in active markets for identical assets or liabilities.

* Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or

liability, either directly (i.e.: as prices) or indirectly (i.e.: derived from prices).

* Level 3 – inputs for the asset or liability that are not based on observable market data.

At April 30, 2011, all of the financial instruments measured at fair value are included in Level 1 except

financial instrument liability and convertible debts, which are in Level 2.

Significant Recent Developments

Spin Off of 50% Interest in Silverknife Claims to Subsidiary

On August 9^th, 2010 we announced that we intended to spin off our 50% interest in the Silverknife claims,

located in Liard Mining Division, BC, to a newly created subsidiary, Minewest Silver and Gold Inc.

(“Minewest”). Minewest will prepare a geological report on the Silverknife claims. Pursuant to an

agreement between our company and Minewest we will perform a $150,000 work program in the first

year and a $250,000 work program in the second year. As consideration for the 50% interest in the

Silverknife claims, Minewest will issue up to 8,000,000 common shares to our company and we will

retain a 5% net profit return. We plan to distribute the Minewest shares to our shareholders on a 7 to 1

basis as of a record date of August 27^th, 2010.

We advised that negotiations were underway to acquire the additional 50% interest in the Silverknife

claims. Minewest intends to raise $250,000, of which $150,000 will be flow-through shares to be spent

on exploration, including drilling the known silver, lead and zinc targets, which were identified in a 3,000

foot drilling program completed in 1985.

Subsequently, we announced that we were extending the record date and distribution of the Minewest

shares as a result of a letter received from Barry Price, who is associated with Rapitan Resources Inc.

(“Rapitan”), one of the optionors of the Silverknife claims. In his letter Mr. Price alleges that we do not

hold an interest in the claims because the work required to earn the interest was not completed by January

1, 1985. However, we assert that an amended agreement was signed by all parties extending the

completion of the work program to January 1, 1986, which work program was completed before that date.

On December 21, 2010, we announced that we signed an agreement dated December 16, 2010 with

Rapitan, wherein both parties confirm that there are no further disputes regarding ownership of

Silverknife claims 1 and 2 and Rapitan sold its 25% interest in the Silverknife property to Minewest, who

will consequently own 70% work interest in the Silvernife Claims 1 and 2, subject to a 10% net smelter

return.

In February, 2011 we completed our 43-101 report which result was announced in our news release. A

proposed Phase I exploration program consisting of a desk study followed by a series of on-the-ground

Property boundary and drill collar location surveys, followed by geophysics and diamond drilling with a

recommended budget of $358,700 is recommended for the Silverknife Property.

On February 15, 2011 our directors declared a distribution of Minewest Silver & Gold Inc. shares on a 7

to 1 basis as of the previous record date February 15, 2011 to be extended to February 28th, 2011.

Directors and Officers

Our Board of Directors is as follows:

John Robertson

Suzanne Robertson

James Vandeberg

Robert Grisar

Our officers are:

John Robertson

President, Chief Executive Officer and Corporate Secretary

James Vandeberg

Chief Financial Officer

Internal Control Risks

The President or the Chief Executive Officer (“CEO”) and Chief Financial Officer ("CFO") are

responsible for designing internal controls over financial reporting in order to provide reasonable

assurance regarding the reliability of financial reporting and the preparation of the Company's

consolidated financial statements for external purposes in accordance with US GAAP. The design of the

Company's internal control over financial reporting was assessed as of the date of this Management

Discussion and Analysis.

Based on this assessment, a weakness common to small companies was identified. The Company does

not have a sufficient number of personnel to allow for proper segregation of duties. To compensate for

this, all major commitments and all payments require two signatures, including CEO, and a member of

the board of directors.

Furthermore, the officers and directors will continue to monitor very closely all financial activities of the

Company to mitigate this weakness, and candid discussion of any risks with the audit committee.

Risks and Uncertainties

The risks and uncertainties affecting the Company are set out in the Company’s Annual Information

Form filed on SEADR at www.sedar.com. It is the management’s opinion that the Company will be able

to raise sufficient funds on hand to meet the Company’s ongoing administrative expenses for a period of

at least twelve months.

Disclosure Controls and Procedures and Internal Control over Financial Reporting

Management has established processes, which are in place to provide them sufficient knowledge to

support management representations that they have exercised reasonable diligence that (i) the audited

financial statements do not contain any untrue statement of material fact or omit to state a material fact

required to be stated or that is necessary to make a statement not misleading in light of the circumstances

under which it is made, as of the date of and for the periods presented by the audited financial statements

and that (ii) the audited financial statements fairly present in all material respects the financial condition,

results of operations and cash flows of the Company, as of the date of and for the periods presented by the

audited financial statements.

In contrast to the certificate required under National Instrument 52-109 Certification of Disclosure in

Issuers’ Annual and Interim Filings (NI 52-109), the Company utilizes the Venture Issuer Basic

Certificate which does not include representations relating to the establishment and maintenance of

disclosure controls and procedures (DC&P) and internal controls over financial reporting (ICFR), as

defined in NI 52-109. In particular, the certifying officers filing Venture Issuer Basic Certificate are not

making any representations relating to the establishment and maintenance of:

controls and other procedures designed to provide reasonable assurance that

information required to be disclosed by the issuer in its annual filings, interim filings

or other reports filed or submitted under securities legislation is recorded, processed,

summarized and reported within the time periods specified in securities legislation;

and

ii)

a process to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external purposes in

accordance with the issuer’s GAAP.

The Company’s certifying officers are responsible for ensuring that processes are in place to provide

them with sufficient knowledge to support the representations they are making in this certificate.

Investors should be aware that inherent limitations on the ability of certifying officers of the Company to

design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in

additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and

other reports provided under securities legislation.

Share Capital

Our authorized capital consists of 65,000,000 shares, consisting of 50,000,000 common shares without

par value, 10,000,000 preferred shares with a par value of $1.00 per share and 5,000,000 Class "A" non-

voting shares without par value. Of the 50,000,000 common shares without par value, 30,725,118 shares

(excluding the 217,422 shares owned by Rand) were outstanding as of the date of this report. There are no

Preferred or Class "A" Shares currently outstanding.

During the year ended April 30, 2011, we issued 460,929 common shares for warrants exercised at $0.20

per share and issued 1,894,333 units of private placement at $0.15 per unit for proceeds of $284,150

The following is a summary of the stock options and share purchase warrants outstanding as at April 30,

2011:

Stock options:

Expiry Date

Exercise

Number

Remaining

price

of options

contractual life

(years)

August 1, 2013

0.40

400,000

2.26

April 22, 2014

0.21

375,000

2.98

April 19, 2015

0.21

50,000

3.97

October 21, 2015

0.14

750,000

4.48

Options Outstanding

1,575,000

Options Exercisable

393,570

Share purchase warrants:

Expiry Date

Exercise

Number

price

of warrants

July 26, 2011

0.20

840,000

September 24, 2011

0.20

1,355,000

February 24, 2012

0.20

1,894,333

Warrants Outstanding

4,089,333

Changes in Accounting Policies

The audited consolidated financial statements for the year ended April 30, 2011 have been prepared in

accordance with Canadian generally accepted accounting principles.

IFRS Implementation Plan

We have commenced the development of an International Financial Reporting Standards (“IFRS”)

implementation plan to prepare for this transition, and are currently in the process of analyzing the key

areas where changes to current accounting policies may be required. While an analysis will be required

for all current accounting policies, the initial key areas of assessment will include:

* Exploration and development expenditures;

* Property and equipment (measurement and valuation);

* Stock-based compensation;

* Accounting for income taxes; and

* First-time adoption of International Financial Reporting Standards (IFRS 1).

As the analysis of each of the key areas progresses, other elements of our IFRS implementation plan will

also be addressed, including: the implication of changes to accounting policies and processes and

financial statement note disclosure. The table below summarizes the expected timing of activities related

to our transition to IFRS:

Initial analysis of key areas for which changes to accounting policies may

In progress now

be required

Detailed analysis of all relevant IFRS requirements and identification of

In progress now

areas requiring accounting policy changes or those with accounting policy

alternatives

Assessment of first-time adoption (IFRS 1) requirements and alternatives

In progress now

Final determination of changes to accounting policies and choices to be

In discussion with auditors

made with respect to first-time adoption alternatives

Resolution of the accounting policy change implications on the accounting

In analysis

processes

Quantification of the financial statement impact of changes in accounting

In analysis

policies

Subsequent Events

Convertible Debenture

On June 1, 2011, the convertible debenture for total principal of $20,000 matured and was not paid. The

debenture boar interests at 8% per annum payable monthly, was unsecured and due one year from date of

issuance. The unpaid amount of principal can be converted at any time at the holder’s option into shares

of the Company’s common stock at a price of $0.20 per share.

Warrants expired

On July 26, 2011, 840,000 warrants of the Company exercisable at $0.20 per share into the Company’s

common stock have expired, unexercised.

Private placement

On June 9, 2011, the Company completed a private placement, whereby it issued 2,043,300 units at $0.15

per unit for proceeds of $306,450. Each private placement unit consisted of one common share and one

half share purchase warrant. Two half warrants entitle the holder to purchase one additional share of

common stock at a price of $0.20 per share for one year.

Minewest subscription received

During May, 2011 Minewest received total subscriptions of $20,000 for 100,000 common shares of

Minewest. The shares have not yet been issued.

Approval

Our Board of Directors have approved the disclosures in this MD&A. A copy of this MD&A will be

provided to anyone who requests it.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Additional Information

Additional information relating to our company is available on SEDAR at www.sedar.com.