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MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE YEAR ENDED
DECEMBER 31, 2016

The following managements discussion and analysis
(MD&A), which is dated as of March 31, 2017, provides a review of
the activities, results of operations and financial condition of Loncor
Resources Inc. (the Company or Loncor) as at and for the
financial year of the Company ended December 31, 2016, (fiscal 2016) in
comparison with those as at and for the financial year of the Company ended
December 31, 2015 (fiscal 2015), as well as future prospects of the
Company. This MD&A should be read in conjunction with the audited
consolidated financial statements of the Company for fiscal 2016 and fiscal 2015
(the Annual Financial Statements). As the Companys consolidated
financial statements are prepared in United States dollars, all dollar amounts
in this MD&A are expressed in United States dollars unless otherwise
specified. Additional information relating to the Company, including the
Companys annual report on Form 20-F dated March 31, 2017, is available on SEDAR
at www.sedar.com and on EDGAR at www.sec.gov.

Forward-Looking Statements

The following MD&A contains forward-looking statements. All
statements, other than statements of historical fact, that address activities,
events or developments that the Company believes, expects or anticipates will or
may occur in the future (including, without limitation, statements regarding
mineral resource estimates, exploration results, potential mineral resources,
potential mineralization and future plans and objectives of the Company) are
forward-looking statements. These forward-looking statements reflect the current
expectations or beliefs of the Company based on information currently available
to the Company. Forward-looking statements are subject to a number of risks and
uncertainties that may cause the actual results of the Company to differ
materially from those discussed in the forward-looking statements, and even if
such actual results are realized or substantially realized, there can be no
assurance that they will have the expected consequences to, or effects on the
Company. Factors that could cause actual results or events to differ materially
from current expectations include, among other things, risks related to the
exploration stage of the Company's mineral properties, uncertainties relating to
the availability and costs of financing needed in the future, the possibility
that future exploration results will not be consistent with the Companys
expectations, changes in equity markets, changes in commodity prices, failure to
establish estimated mineral resources (the Companys mineral resource figures
are estimates and no assurances can be given that the indicated levels of gold
will be produced), fluctuations in currency exchange rates, inflation, political
developments in the Democratic Republic of the Congo (the DRC), changes
to regulations affecting the Company's activities, delays in obtaining or
failure to obtain required project approvals, the uncertainties involved in
interpreting geological data and the other risks involved in the mineral
exploration business. Any forward-looking statement speaks only as of the date
on which it is made and, except as may be required by applicable securities
laws, the Company disclaims any intent or obligation to update any
forward-looking statement, whether as a result of new information, future events or results or
otherwise. Although the Company believes that the assumptions inherent in the
forward-looking statements are reasonable, forward-looking statements are not
guarantees of future performance and accordingly undue reliance should not be
put on such statements due to the inherent uncertainty therein.

1

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General

Loncor is a mineral exploration company with a primary focus on
gold. The Companys mineral properties are in the Orientale and North Kivu
provinces of the DRC where the Company holds or controls rights under 60
exploration permits (PRs), directly through a wholly-owned DRC subsidiary,
Loncor Resources Congo SARL, or under option agreements with the holders of the
permits. At the Ngayu project in Orientale Province, the Company, through its
DRC subsidiary, has 13 PRs, while at the North Kivu project the Company has 47
PRs through its DRC subsidiary or under option from third parties. All of the
47 North Kivu PRs are currently under force majeure due to the poor security
situation in much of the North Kivu province.

In January 2016, Loncor announced that its subsidiary, Loncor
Resources Congo SARL ("Loncor Congo"), has entered into an agreement with
Randgold Resources (DRC) Limited ("Randgold"). This agreement provides
for the future establishment of a joint venture (the "Joint Venture")
between Loncor Congo and Randgold covering all of the exploration permit areas
comprising the Ngayu project, other than certain parcels of land surrounding and
including the Makapela and Yindi prospects which are retained by Loncor Congo
and do not form part of the Joint Venture. Randgold shall have certain
preemptive rights over these two areas. Based on the 43-101 Report produced in
2012, the Makapela prospect has an Indicated Mineral Resource of 614,200 ounces
of gold (2.20 million tonnes grading 8.66 g/t Au) and an Inferred Mineral
Resource of 549,600 ounces of gold (3.22 million tonnes grading 5.30 g/t Au).

In February 2016, Loncor closed a non-brokered private
placement of 67,000,000 common shares of the Company at a price of Cdn$0.015 per
share for gross proceeds of Cdn$1,005,000 (the "Offering"). Mr. Kondrat,
President, Chief Executive Officer and a director of the Company, acquired
60,000,000 of the shares issued under the Offering. Mr. Kondrat now holds
74,300,818 (or 46.8%) of the outstanding common shares of the Company. A portion
of the proceeds of the Offering were used to repay short term, non-interest
bearing loans totalling Cdn$825,000 provided to the Company by Mr. Kondrat.

In April 2016, the Companys joint venture partner, Randgold,
commenced a regional helicopter-borne VTEM B-Field, Horizontal Magnetic
Gradiometer geophysical survey (the Survey) over Loncor's Ngayu
project. The Survey was conducted by Geotech Airborne Limited. The Survey flight
path design was north-south orientated lines at 400-meter spacing for a total of
approximately 10,000 line kilometres, of which 4,200 line kilometers were flown
over the Ngayu project.

As per the terms of the agreement with Randgold, they will
manage and fund exploration of the exploration permit areas comprising Loncor's
Ngayu project until the completion of a pre-feasibility study on any gold
discovery meeting the investment criteria of Randgold. Subject to the DRCs free
carried interest requirements, Randgold would earn 65% of any discovery with
Loncor holding the balance of 35%. Loncor will be required, from that point
forward, to fund its pro-rata share in respect of the discovery in order to
maintain its 35% interest or be diluted.

In June 2016, the Company closed a non-brokered private
placement of 1,750,000 units of the Company at a price of Cdn$0.12 per unit for
gross proceeds of Cdn$210,000. Each such unit was comprised of one common share of the Company and one-half
of one warrant of the Company, with each full warrant entitling the holder to
purchase one common share of the Company at a price of Cdn$0.18 for a period of
two years.

2

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In January 2017, the Company announced preliminary results of
the Survey undertaken by Randgold. The Survey has provided a valuable additional
layer of geological information through mapping the conductivity nature of the
Ngayu belt. The new data has assisted with resolving the lithological nature of
the belt as well as assisting in identifying major structures and areas of
structural complexity. Preliminary observations have highlighted key areas of
structural complexity in the Imva fold area that are geochemically anomalous,
together with the extension of the Yindi and Adumbi structures, which will form
the core of the ten areas of interest to be prioritized for follow-up work in
2017 by Randgold under the Joint Venture.

In February 2017, the Company closed a non-brokered private
placement of 4,000,000 units of the Company at a price of Cdn$0.12 per unit for
gross proceeds of Cdn$480,000. Each such unit was comprised of one common share
of the Company and one-half of one warrant of the Company, with each full
warrant entitling the holder to purchase one common share of the Company at a
price of Cdn$0.18 for a period of two years. Also in February 2017, the Company
closed a second non-brokered private placement of 1,500,000 units of the Company
at a price of Cdn$0.13 per unit for gross proceeds of Cdn$195,000. Each such
unit was comprised of one common share of the Company and one-half of one
warrant of the Company, with each full warrant entitling the holder to purchase
one common share of the Company at a price of Cdn$0.18 for a period of two
years.

Qualified Person

William R. Wilson, a director of the Company and a "qualified
person" as such term is defined in National Instrument 43-101, has reviewed and
approved the technical information in this MD&A.

Technical Reports

Additional information with respect to the Companys Ngayu
project is contained in the technical report of Venmyn Rand (Pty) Ltd dated May
29, 2012 and entitled "Updated National Instrument 43-101 Independent Technical
Report on the Ngayu Gold Project, Orientale Province, Democratic Republic of the
Congo". Additional information with respect to the Companys North Kivu project
is contained in the technical report of Venmyn Rand (Pty) Ltd dated February 29,
2012 and entitled "National Instrument 43-101 Independent Technical Report on
the Manguredjipa Gold Project, North Kivu Province, Democratic Republic of the
Congo". A copy of each of the said reports can be obtained from SEDAR at
www.sedar.com and EDGAR at www.sec.gov.

Cautionary Note to U.S. Investors

This MD&A has been prepared in accordance with the
requirements of securities laws in effect in Canada, which differ from the
requirements of U.S. securities laws. Without limiting the foregoing, this
MD&A uses the terms, "indicated" and "inferred" resources. U.S. investors
are advised that, while such terms are recognized and required by Canadian
securities laws, the U.S. Securities and Exchange Commission (the "SEC")
does not recognize them. Under U.S. standards, mineralization may not be
classified as a "reserve" unless the determination has been made that the
mineralization could be economically and legally produced or extracted at the
time the reserve determination is made. U.S. investors are cautioned not to
assume that all or any part of measured or indicated resources will ever be
converted into reserves. Further, "inferred resources" have a great amount of uncertainty as to
their existence and as to whether they can be mined legally or economically. It
cannot be assumed that all or any part of the "inferred resources" will ever be
upgraded to a higher category. Therefore, U.S. investors are also cautioned not
to assume that all or any part of the inferred resources exist, or that they can
be mined legally or economically. Disclosure of "contained ounces" is permitted
disclosure under Canadian regulations, however, the SEC normally only permits
issuers to report mineral deposits that do not constitute "reserves" as in place
tonnage and grade without reference to unit measures. Accordingly, information
concerning descriptions of mineralization and resources contained in this
MD&A, may not be comparable to information made public by U.S. companies
subject to the reporting and disclosure requirements of the SEC.

3

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U.S. Investors are urged to consider closely the disclosure in
the Company's Form 20-F annual report, File No. 001-35124, which may be secured
from the Company, or from the SEC's website at
http://www.sec.gov/edgar.shtml.

Selected Annual Information

The following financial data is derived from the Companys
consolidated financial statements for each of the three most recently completed
financial years. This financial data has been prepared in accordance with
International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board.

|                   |   | 2016       |   |   | 2015       |   |   | 2014       |  
|------------------ | - | ---------- | - | - | ---------- | - | - | ---------- | -
|Net loss           | $ | (497,610   | ) | $ | (2,417,247 | ) | $ | (2,902,710 | )
|Net loss per share | $ | (0.00      | ) | $ | (0.03      | ) | $ | (0.04      | )
|Total assets       | $ | 28,081,016 |   | $ | 28,049,026 |   | $ | 29,951,398 |  
|Total liabilities  | $ | 1,423,934  |   | $ | 1,757,508  |   | $ | 1,768,613  |  

For fiscal 2016, the Company had a net loss of $497,610, a
decrease from the prior year mainly due to an impairment of $2,300,000 recorded
by the Company in 2015 to adjust the carrying value of the Ngayu project to its
fair value. Also contributing to the decrease in net loss was reduced
exploration activities and funding of exploration expenditures by Randgold under
a farm-in arrangement whereby exploration and evaluation expenditures incurred
by Randgold are recorded on a cost-based approach and accounted in the same way
as they would for expenditures directly incurred by the Company. Exploration and
evaluation expenditures incurred by Randgold are offset by funding received from
Randgold such that no liability is recorded until a pre-feasibility study is
completed and approved. For fiscal 2015, the Company had a net loss of
$2,417,247 mainly due to an impairment of $2,300,000 recorded by the Company to
adjust the carrying value of the Ngayu project to its fair value. For fiscal
2014, the Company had a net loss of $2,902,710 mainly due to an impairment of
$2,183,233 recorded by the Company to adjust the carrying value of the Ngayu
project to its fair value.

Results of Operations

For the year ended December 31, 2016, the Company reported a
net loss of $497,610 compared to a net loss of $2,417,247 for the year ended
December 31, 2015. Expenses capitalized to mineral properties are discussed
under the Exploration and Evaluation Expenditures section below. Significant
changes in expenses occurred during the year ended December 31, 2016 in the
expense categories described below as compared to the year ended December 31,
2015:

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Consulting, management and
professional feesConsulting, management and professional fees increased
to $138,498 during the year ended December 31, 2016 from $92,329 incurred during
the prior year ended December 31, 2015. Professional fees increased due to
higher legal fees in relation to the Companys financing and general corporate
activities including compliance with securities regulatory requirements during
the year ended December 31, 2016.

Travel and promotion The
Company incurred travel and promotion expenses of $76,489 during the year ended
December 31, 2016 compared to $63,138 incurred during the prior year. Costs
related to shareholder relations and business promotion activities increased
during the year ended December 31, 2016 due to corporate activities related to
securing new financing.

Employee benefitsThe
Companys employee benefits expense was $188,877 for the year ended December 31,
2016 compared to $182,630 during fiscal 2015.

Office and sundryOffice and
sundry expenses decreased to $45,503 during the year ended December 31, 2016
from $70,549 during fiscal 2015. The decrease in costs was mainly due to a
reduction in filings fees as well as head office overhead expenses having been
reduced as part of cash conservation measures.

Foreign exchange loss/gainThe Company recorded a foreign exchange gain of $17,774 during the year
ended December 31, 2016, compared to a foreign exchange gain of $177,310 during
fiscal 2015, This change was due to fluctuations in the value of the United
States dollar relative to the Canadian dollar.

Compensation expense-share-based
paymentThe fair value of employee share-based payment expense was
$55,176 during the year ended December 31, 2016. This was related to share-based
compensation options issued to employees, directors and officers of the Company
in 2016. There was no compensation expense incurred for share based payment
during the corresponding period in 2015.

Loss on derivative instrumentsDuring the year ended December 31, 2016 the Company recognized a loss of
$6,452 representing the change in fair value of the common share purchase
warrants. No derivative instruments were issued in 2015.

Summary of Quarterly Results

The following table sets out certain unaudited consolidated
financial information of the Company for each of the last eight quarters,
beginning with the fourth quarter of 2016. This financial information has been
prepared using accounting policies consistent with International Accounting
Standards (IAS) 34 Interim Financial Reporting issued by the
International Accounting Standards Board (IASB). The Companys
presentation and functional currency is the United States dollar.

5

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|                   |   | 2016       |   |   | 2016        |   |   | 2016       |   |   | 2016       |  
|------------------ | - | ---------- | - | - | ----------- | - | - | ---------- | - | - | ---------- | -
|                   |   | 4thQuarter |   |   | 3rd Quarter |   |   | 2ndQuarter |   |   | 1stQuarter |  
|                   |   |            |   |   |             |   |   |            |   |   |            |  
|Net loss           | $ | (66,013    | ) | $ | (78,145     | ) | $ | (151,595   | ) | $ | (201,857   | )
|Net loss per share | $ | (0.00      | ) | $ | (0.00       | ) | $ | (0.00      | ) | $ | (0.00      | )
|                   |   | 2015       |   |   | 2015        |   |   | 2015       |   |   | 2015       |  
|                   |   | 4thQuarter |   |   | 3rd Quarter |   |   | 2ndQuarter |   |   | 1stQuarter |  
|                   |   |            |   |   |             |   |   |            |   |   |            |  
|Net loss           | $ | (2,232,636 | ) | $ | (25,771     | ) | $ | (93,990    | ) | $ | (64,850    | )
|Net loss per share | $ | (0.03      | ) | $ | (0.00       | ) | $ | (0.00      | ) | $ | (0.00      | )

The Companys net loss for the fourth quarter of 2016 decreased
to $66,013 compared to a net loss of $78,145 in the third quarter of 2016. The
decrease in net loss was partly due to a decrease in travel and promotion
expenses which were $4,088 in the fourth quarter of 2016 compared to $28,235 in
the third quarter of 2016. Additionally, there was also a decrease in consulting
and professional fees which were $6,336 in the fourth quarter of 2016 compared
to $28,648 in the third quarter of 2016. The decrease in net loss was also
partly due to an increase in foreign exchange gain of $46,161 in the fourth
quarter of 2016 compared to $15,174 in the third quarter of 2016. The decrease
in travel and promotion expenses and consulting and management fees and the
increase in foreign exchange gain were partially offset by an increase in the
loss on derivative instruments which was $32,869 in the fourth quarter of 2016
compared to a gain of $38,543 in the third quarter of 2016.

The Companys net loss for the third quarter of 2016 decreased
to $78,145 compared to a net loss of $151,595 in the second quarter of 2016. The
decrease in net loss was partly due to an increase in the gain on derivative
instruments from a loss of $12,126 in the second quarter of 2016 compared to a
gain $38,543 in the third quarter of 2016. The decrease in net loss was also
partly due to a foreign exchange gain of $15,174 in the third quarter of 2016
compared to a foreign exchange loss of $660 in the second quarter of 2016.

The Companys net loss for the second quarter of 2016 decreased
to $151,595 compared to a net loss of $201,857 in the first quarter of 2016. The
decrease in net loss was mainly due to a significant decrease in foreign
exchange loss, which had been $42,901 in the first quarter of 2016 compared to
$660 in the second quarter of 2016.

The Companys net loss for the first quarter of 2016 decreased
to $201,857 compared to a net loss of $$2,232,636 in the fourth quarter of 2015
(see next paragraph for additional information).

The Companys net loss of $2,232,636 for the fourth quarter of
2015 compared to a net loss of $25,771 in the third quarter of 2015 was mainly
due to an impairment loss of $2,300,000 recorded during the fourth quarter on
the exploration and evaluation assets for the Ngayu project, offset by a foreign
exchange gain incurred during the fourth quarter resulting from fluctuations of
the Canadian dollar against the United States dollar.

The Companys net loss for the third quarter of 2015 decreased
to $25,771 compared to a net loss of $93,990 in the second quarter of 2015. This
decrease in the loss was largely due to a significant change in the foreign
exchange amount, which had been a gain of $74,314 in the second quarter but
further increased to a gain of $144,969 in the third quarter. This change was
due to fluctuations in the value of the United States dollar
relative to the Canadian dollar. The increase in the foreign exchange gain
amount was offset by an increase in employee benefits and travel and promotion
expenses which increased to $133,584 and $56,714 respectively in the third
quarter from $79,874 and $30,506 respectively in the second quarter.

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The Companys net loss for the second quarter of 2015 increased
to $93,990 compared to a net loss of $64,850 in the first quarter of 2015. This
increase was largely due to a significant change in the foreign exchange amount,
which had been a gain of $82,374 in the first quarter but decreased to a loss of
$8,060 in the second quarter. This change was due to fluctuations in the value
of the United States dollar relative to the Canadian dollar. The swing in
foreign exchange amounts was offset by the decrease in professional fees and
office expenses which were $7,648 and $5,083 respectively in the second quarter
compared to $50,303 and $43,910 respectively in the first quarter.

Liquidity and Capital Resources

The Company historically relies primarily on equity financings
to fund its activities. Although the Company has been successful in completing
equity financings in the past, there is no assurance that the Company will
secure the necessary financings in the future. The volatility in the gold price
has made it more difficult to secure equity financing for many exploration
companies.

As at December 31, 2016, the Company had cash and cash
equivalents of $21,520 and a working capital deficit of $1,150,458 compared to
cash and cash equivalents of $8,255 and a working capital deficit of $1,626,788
as at December 31, 2015.

During the year ended December 31, 2016, the Company incurred
cash exploration expenditures of $254,454 (year ended December 31, 2015 -
$497,861). A breakdown of all exploration expenditures is presented below under
Exploration and Evaluation Expenditures.

In February 2016, Loncor closed a non-brokered private
placement of 67,000,000 common shares of the Company at a price of Cdn$0.015 per
share for gross proceeds of Cdn$1,005,000 (the "Offering"). Mr. Arnold
Kondrat, the President, Chief Executive Officer and a director of the Company,
acquired 60,000,000 of the shares issued under the Offering. Mr. Kondrat now
holds 74,300,818 (or 46.8%) of the outstanding common shares of the Company. A
portion of the proceeds of the Offering were used to repay short term,
non-interest bearing loans totalling Cdn$825,000 provided to the Company by Mr.
Kondrat.

In June 2016, the Company closed a non-brokered private
placement of 1,750,000 units of the Company at a price of Cdn$0.12 per unit for
gross proceeds of Cdn$210,000. Each such unit was comprised of one common share
of the Company and one-half of one warrant of the Company, with each full
warrant entitling the holder to purchase one common share of the Company at a
price of Cdn$0.18 for a period of two years.

In February 2017, the Company closed a non-brokered private
placement of 4,000,000 units of the Company at a price of Cdn$0.12 per unit for
gross proceeds of Cdn$480,000. Each such unit was comprised of one common share
of the Company and one-half of one warrant of the Company, with each full
warrant entitling the holder to purchase one common share of the Company at a
price of Cdn$0.18 for a period of two years. Also in February 2017, the Company
closed a second non-brokered private placement of 1,500,000 units of the Company
at a price of Cdn$0.13 per unit for gross proceeds of Cdn$195,000. Each such
unit was comprised of one common share of the Company and one-half of one
warrant of the Company, with each full warrant entitling the holder to purchase one common share of
the Company at a price of Cdn$0.18 for a period of two years.

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The Company has strategically reduced budgets significantly and
implemented cost cutting measures having regard to current market conditions and
its low cash position and working capital deficiency. As is typical for an
exploration company, the Company will need to raise additional funds to continue
its activities. The Company expects to raise such additional funds through
offerings of its shares. However, if the Company raises additional funds by
issuing additional shares, the ownership percentages of existing shareholders
will be reduced and the securities that the Company may issue in the future may
have rights, preferences or privileges senior to those of the current holders of
the Companys common shares. Such securities may also be issued at a discount to
the market price of the Companys common shares, resulting in possible further
dilution to the book value per share of common shares. If the Company is unable
to raise sufficient funds through equity offerings, it may need to sell an
interest in its properties. There can be no assurance the Company would be
successful in selling any such interest.

Contractual Obligations

The Company has no contractual obligations relating to future
operating lease commitments as at December 31, 2016.

Exploration and Evaluation Expenditures

The following table provides a breakdown of the Company's
exploration and evaluation expenditures incurred during the year ended December
31, 2016:

|                            |   | North Kivu
      Project |   |   | Ngayu Project |   |   | Total      |  
|--------------------------- | - | ------------------------ | - | - | ------------- | - | - | ---------- | -
|Balance 12/31/2015          | $ | 10,096,482               |   | $ | 17,739,748    |   | $ | 27,836,230 |  
|                            |   |                          |   |   |               |   |   |            |  
|Professional fees           |   | 1,100                    |   |   | 27,120        |   |   | 28,220     |  
|Travel                      |   | 37                       |   |   | 4,095         |   |   | 4,132      |  
|Office and sundry           |   | 1,238                    |   |   | 155,382       |   |   | 156,620    |  
|Surveying costs             |   | -                        |   |   | 395,230       |   |   | 395,230    |  
|Interest and bank charges   |   | 1,188                    |   |   | 3,933         |   |   | 5,121      |  
|Salaries                    |   | 1,071                    |   |   | 9,653         |   |   | 10,724     |  
|Amortization                |   | 4,282                    |   |   | 38,537        |   |   | 42,819     |  
|Gain on disposal of assets  |   | (10                      | ) |   | (2,390        | ) |   | (2,400     | )
|Other                       |   | 27                       |   |   | 25,203        |   |   | 25,230     |  
|Expenditures for the period |   | 8,933                    |   |   | 658,620       |   |   | 667,553    |  
|Funding from Randgold       |   | -                        |   |   | (646,014      | ) |   | (646,014   | )
|Balance 12/31/2016          | $ | 10,105,415               |   | $ | 17,752,354    |   | $ | 27,857,769 |  

The following table provides a breakdown of the Company's
exploration and evaluation expenditures incurred during the year ended December
31, 2015:

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|                                 |   | North Kivu Project |   |   | Ngayu Project |   |   | Total      |  
|-------------------------------- | - | ------------------ | - | - | ------------- | - | - | ---------- | -
|Balance 12/31/2014               | $ | 10,074,001         |   | $ | 19,516,926    |   | $ | 29,590,927 |  
|                                 |   |                    |   |   |               |   |   |            |  
|Field camps expenses             |   | 161                |   |   | 4,277         |   |   | 4,438      |  
|Geochemistry                     |   | -                  |   |   | 2,101         |   |   | 2,101      |  
|Professional fees                |   | 6,548              |   |   | 16,502        |   |   | 23,050     |  
|Business promotion               |   | -                  |   |   | 1,800         |   |   | 1,800      |  
|Travel                           |   | 1,479              |   |   | 16,250        |   |   | 17,729     |  
|Office and sundry                |   | 6,289              |   |   | 163,544       |   |   | 169,833    |  
|Interest and bank charges        |   | 3,675              |   |   | 3,930         |   |   | 7,605      |  
|Salaries                         |   | 9,317              |   |   | 234,102       |   |   | 243,419    |  
|Amortization                     |   | 4,274              |   |   | 77,998        |   |   | 82,272     |  
|Loss(Gain) on disposal of assets |   | (18,816            | ) |   | (70,350       | ) |   | (89,166    | )
|Other                            |   | 9,554              |   |   | 72,668        |   |   | 82,222     |  
|Expenditures for the period      |   | 22,481             |   |   | 522,822       |   |   | 545,303    |  
|Impairment loss                  |   | -                  |   |   | (2,300,000    | ) |   | (2,300,000 | )
|Balance 12/31/2015               | $ | 10,096,482         |   | $ | 17,739,748    |   | $ | 27,836,230 |  

Outstanding Share Data

The authorized share capital of the Company consists of an
unlimited number of common shares and an unlimited number of preference shares,
issuable in series. As at March 31, 2017, the Company had outstanding
158,689,732 common shares, 3,215,000 stock options to purchase common shares and
3,625,000 common share purchase warrants.

Related Party Transactions

|a) | Key Management Personnel
|-- | ------------------------

The Companys related parties include key management. Key
management includes directors (executive and non-executive), the Chief Executive
Officer (CEO), the Chief Financial Officer, and the senior executives
reporting directly to the CEO. The remuneration of the key management of the
Company as defined above, during the years ended December 31, 2016 and December
31, 2015 were as follows:

|                                                |   | For the year ended | 
|----------------------------------------------- | - | ------------------ | 
|                                                |   | December 31, 2016  | 
|Salaries                                        | $ | 137,458            | 
|Employee retention allowance                    | $ | 11,455             | 
|Compensation
      expense-share-based payments | $ | 55,176             | 
|                                                | $ | 204,088            | 

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|b) | Other Related Parties
|-- | ---------------------

As at December 31, 2016, an amount of $1,381 was due to Delrand
Resources Limited (Delrand), a company with common directors, incurred in
connection with common expenses (December 31, 2015 - $12,619 due from
Delrand).

As at December 31, 2016, an amount of $77,443 relating to
advances provided to the Company was due to Arnold Kondrat, a director and
officer of the Company (December 31, 2015 - $527,826).

As at December 31, 2016, an amount of $49,085 was due to Gentor
Resources Inc. (a company with common directors) related to common expenses
(December 31, 2015 - $62,236 due to Gentor).

|                       |   | December 31,
      2016 |  |   | December 31, 2015 | 
|---------------------- | - | ----------------------- |  | - | ----------------- | 
|Due from related party | $ | -                       |  | $ | 12,619            | 
|Due to related parties |   | 127,909                 |  |   | 590,062           | 

Accounting Standards Issued But Not Yet Effective

The Company has reviewed new and revised accounting
pronouncements that have been issued but are not yet effective and determined
that the following may have an impact on the Company:

IFRS 9, Financial instruments (IFRS 9) was issued by
the International Accounting Standards Board (IASB) on July 24, 2014 and will
replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 is
intended to reduce the complexity for the classification, measurement, and
impairment of financial instruments. The mandatory effective date is for annual
periods beginning on or after January 1, 2018. The Company is evaluating the
impact of this standard on its consolidated financial statements.

IAS 7  Statement of Cash Flows (IAS 7) was amended in
February 2016 with the objective that entities provide disclosures that enable
users of financial statements to evaluate changes in liabilities arising from
financing activities. The amendments are effective for annual periods beginning
on or after January 1, 2017. Earlier adoption is permitted. The Company is
evaluating the impact of this standard on its consolidated financial statements.

IFRS 16, Leases (IFRS 16) was issued by the IASB in January
2016 and will replace IAS 17 Leases. IFRS 16 specifies the methodology to
recognize, measure, present and disclose leases. The standard provides a single
lessee accounting model, requiring lessees to recognize assets and liabilities
for all leases unless the lease term is 12 months or less or the underlying
asset has a low value. The mandatory effective date is for annual periods
beginning on or after January 1, 2019. The Company is evaluating the impact of
this standard on its consolidated financial statements.

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Critical Accounting Estimates

The preparation of the Companys consolidated financial
statements in conformity with International Financial Reporting Standards
(IFRS) requires management to make judgments, estimates and assumptions
that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these
estimates. Estimates and underlying assumptions are reviewed on an ongoing
basis. Information about critical judgments in applying accounting policies and
estimates that have the most significant effect on the amounts recognized in the
consolidated financial statements included the following:

Estimates:

Impairment

Assets, including property, plant and equipment and exploration
and evaluation assets, are reviewed for impairment whenever events or changes in
circumstances indicate that their carrying amounts exceed their recoverable
amounts. The assessment of the fair value often requires estimates and
assumptions such as discount rates, exchange rates, commodity prices,
rehabilitation and restoration costs, future capital requirements and future
operating performance. Changes in such estimates could impact recoverable values
of these assets. Estimates are reviewed regularly by management.

Share-based payment transactions

The Company measures the cost of equity-settled transactions
with employees by reference to the fair value of the equity instruments at the
date at which they are granted. Estimating fair value for share-based payment
transactions requires determining the most appropriate valuation model, which is
dependent on the terms and conditions of the grant. This estimate also requires
determining the most appropriate inputs to the valuation model including the
expected life of the stock option, volatility and dividend yield and making
assumptions about them. The assumptions and models used for estimating fair
value for share-based payment transactions are disclosed in Note 13.

For warrant-based derivative financial instruments, the Company
uses the Black-Scholes option pricing model to estimate fair value of the
derivative instruments. The assumptions and models used for estimating fair
value of warrant-based derivative financial instruments are disclosed in Note
12.

Judgments:

Provisions and contingencies

The amount recognized as provision, including legal,
contractual and other exposures or obligations, is the best estimate of the
consideration required to settle the related liability, including any related
interest charges, taking into account the risks and uncertainties surrounding
the obligation. In addition, contingencies will only be resolved when one or
more future events occur or fail to occur. Therefore, assessment of
contingencies inherently involves the exercise of significant judgment and
estimates of the outcome of future events. The Company assesses its liabilities and contingencies based upon
the best information available, relevant tax laws and other appropriate
requirements.

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Title to mineral property interests

Although the Company has taken steps to verify title to mineral
properties in which it has an interest, these procedures do not guarantee the
Companys title. Such properties may be subject to prior agreements or transfers
and title may be affected by undetected defects.

Exploration and evaluation expenditure

The application of the Companys accounting policy for
exploration and evaluation expenditure requires significant judgment in
determining whether it is likely that future economic benefits will flow to the
Company, which may be based on assumptions about future events or circumstances.
Estimates and assumptions made may change if new information becomes available.
There are key circumstances that would indicate a test for impairment is
required, which include: the expiry of the right to explore, substantive
expenditure on further exploration is not planned, exploration for and
evaluation of the mineral resources in the area have not led to discovery of
commercially viable quantities, and/or sufficient data exists to show that the
carrying amount of the asset is unlikely to be recovered in full from successful
development or by sale. If information becomes available suggesting impairment,
the amount capitalized is written off in the consolidated statement of
comprehensive loss during the year the new information becomes available.

Significant judgements have been made with regards to the
potential for indicators of impairment. This includes judgements related to the
ability to carry out the desired exploration activities as a result of various
permits currently being under force majeure due to the poor security situation
at the North Kivu property and the need to allocate resources amongst different
projects based on the availability of capital and funding.

Functional and presentation currency

Judgment is required to determine the functional currency of
the Company and its subsidiaries. These judgments are continuously evaluated and
are based on managements experience and knowledge of the relevant facts and
circumstances.

Financial Risk Management

Fair Value of Financial Assets and Liabilities

The consolidated statements of financial position carrying
amounts for cash and cash equivalents, advances receivable, balances due from/to
related parties, accounts payable, accrued liabilities and the employee
retention allowance approximate fair value due to their short-term nature. Due
to the use of subjective judgments and uncertainties in the determination of
fair values these values should not be interpreted as being realizable in an
immediate settlement of the financial instruments.

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Fair value hierarchy

The following table provides an
analysis of financial instruments that are measured subsequent to initial
recognition at fair value, grouped into Levels 1 to 3 based on the degree to
which the fair value is observable:

| |  | Level 1 fair value measurements are those derived from
      quoted prices (unadjusted) in active markets for identical assets or
      liabilities;                                                                                                       
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Level 2 fair value measurements are those derived from
      inputs other than quoted prices included within 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 fair value measurements are those derived from
      valuation techniques that include inputs for the asset or liability that
      are not based on observable market data (unobservable inputs).                                                 

There were no transfers between Level 1, 2 and 3 during the
reporting period. Cash and cash equivalents are ranked Level 1 as the market
value is readily observable. The carrying value of cash and cash equivalents
approximates fair value, as maturities are less than three months. The fair
value of warrants would be ranked in the hierarchy as Level 2.

Foreign Currency Risk

Foreign exchange risk is the risk that a variation in exchange
rates between the United States dollar and Canadian dollar or other foreign
currencies will affect the Companys operations and financial results. A portion
of the Companys transactions is denominated in Canadian dollars. Significant
foreign exchange gains or losses are reflected as a separate component of the
consolidated statement of comprehensive loss. The Company does not use
derivatives instruments to reduce its exposure to foreign currency risk. See
Note 15(c) of the Annual Financial Statements for additional details.

Credit Risk

Financial instruments which are potentially subject to credit
risk for the Company consist primarily of cash and cash equivalents, advances
receivable and due from related parties. Cash and cash equivalents are
maintained with several financial institutions of reputable credit and may be
redeemed upon demand. It is therefore the Companys opinion that such credit
risk is subject to normal industry risks and is considered minimal. See Note
15(d) of the Annual Financial Statements for additional details.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to
meet its financial obligations as they become due. The Company attempts to
ensure that there is sufficient cash to meet its liabilities when they are due
and manages this risk by regularly evaluating its liquid financial resources to
fund current and long-term obligations and to meet its capital commitments in a
cost-effective manner. If future cash flows are fairly uncertain, the liquidity
risk increases. The Companys liquidity requirements are met through a variety
of sources, including cash and cash equivalents, and equity capital markets.

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Mineral Property Risk

The Companys operations in the DRC are exposed to various
levels of political risk and uncertainties, including political and economic
instability, government regulations relating to exploration and mining, military
repression and civil disorder, all or any of which may have a material adverse
impact on the Companys activities or may result in impairment or loss of part
or all of the Company's assets.

Risks and Uncertainties

The Company is subject to a number of risks and uncertainties
that could significantly impact its operations and future prospects. The
following discussion pertains to certain principal risks and uncertainties but
is not, by its nature, all inclusive.

All of the Company's projects are located in the DRC. The
assets and operations of the Company are therefore subject to various political,
economic and other uncertainties, including, among other things, the risks of
war and civil unrest, hostage taking, military repression, labor unrest, illegal
mining, expropriation, nationalization, renegotiation or nullification of
existing licenses, permits, approvals and contracts, taxation policies, foreign
exchange and repatriation restrictions, changing political conditions,
international monetary fluctuations, currency controls and foreign governmental
regulations that favor or require the awarding of contracts to local contractors
or require foreign contractors to employ citizens of, or purchase supplies from,
a particular jurisdiction. Changes, if any, in mining or investment policies or
shifts in political attitude in the DRC may adversely affect the Company's
operations. Operations may be affected in varying degrees by government
regulations with respect to, but not limited to, restrictions on production,
price controls, export controls, currency remittance, income taxes, foreign
investment, maintenance of claims, environmental legislation, land use, land
claims of local people, water use and mine safety. Failure to comply strictly
with applicable laws, regulations and local practices relating to mineral rights
could result in loss, reduction or expropriation of entitlements. In addition,
in the event of a dispute arising from operations in the DRC, the Company may be
subject to the exclusive jurisdiction of foreign courts or may not be successful
in subjecting foreign persons to the jurisdiction of courts in Canada. The
Company also may be hindered or prevented from enforcing its rights with respect
to a governmental instrumentality because of the doctrine of sovereign immunity.
It is not possible for the Company to accurately predict such developments or
changes in laws or policy or to what extent any such developments or changes may
have a material adverse effect on the Company's operations.

The DRC is a developing nation emerging from a period of civil
war and conflict. Physical and institutional infrastructure throughout the DRC
is in a debilitated condition. The DRC is in transition from a largely state
controlled economy to one based on free market principles, and from a
non-democratic political system with a centralized ethnic power base, to one
based on more democratic principles. There can be no assurance that these
changes will be effected or that the achievement of these objectives will not
have material adverse consequences for the Company and its operations. The DRC
continues to experience instability in parts of the country due to certain
militia and criminal elements. While the government and United Nations forces
are working to support the extension of central government authority throughout
the country, there can be no assurance that such efforts will be successful.

The only sources of future funds for further exploration
programs which are presently available to the Company are the sale of equity
capital, or the offering by the Company of an interest in its properties to be earned by another party carrying out further
exploration. There is no assurance that such sources of financing will be
available on acceptable terms, if at all. In the event that commercial
quantities of minerals are found on the Company's properties, the Company does
not have the financial resources at this time to bring a mine into production.

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All of the Company's properties are in the exploration stage
only and none of the properties contain a known body of commercial ore. The
Company currently operates at a loss and does not generate any revenue from its
mineral properties. The exploration and development of mineral deposits involve
significant financial risks over a significant period of time, which even a
combination of careful evaluation, experience and knowledge may not eliminate.
Few properties which are explored are ultimately developed into producing mines.
Major expenditures may be required to establish reserves by drilling and to
construct mining and processing facilities at a site. It is impossible to ensure
that the Company's exploration programs will result in a profitable commercial
mining operation.

The Company's mineral resources are estimates and no assurances
can be given that the indicated levels of gold will be produced. Such estimates
are expressions of judgment based on knowledge, mining experience, analysis of
drilling results and industry practices. Valid estimates made at a given time
may significantly change when new information becomes available. While the
Company believes that its resource estimates are well established, by their
nature resource estimates are imprecise and depend, to a certain extent, upon
statistical inferences, which may ultimately prove unreliable. If such estimates
are inaccurate or are reduced in the future, this could have a material adverse
impact on the Company. In addition, there can be no assurance that gold
recoveries or other metal recoveries in small-scale laboratory tests will be
duplicated in larger scale tests under on-site conditions or during
production.

The Company's exploration and, if such exploration is
successful, development of its properties is subject to all of the hazards and
risks normally incident to mineral exploration and development, any of which
could result in damage to life or property, environmental damage and possible
legal liability for any or all damage.

The price of gold has fluctuated widely. The future direction
of the price of gold will depend on numerous factors beyond the Company's
control including international, economic and political trends, expectations of
inflation, currency exchange fluctuations, interest rates, global or regional
consumption patterns, speculative activities and increased production due to new
extraction developments and improved extraction and production methods. The
effect of these factors on the price of gold, and therefore on the economic
viability of the Company's properties, cannot accurately be predicted. As the
Company is only at the exploration stage, it is not yet possible for the Company
to adopt specific strategies for controlling the impact of fluctuations in the
price of gold.

The Company uses the United States dollar as its functional
currency. Fluctuations in the value of the United States dollar relative to the
Canadian dollar could have a material impact on the Companys consolidated
financial statements by creating gains or losses. The Company recorded a foreign
exchange gain of $17,774 during the year ended December 31, 2016, compared to a
foreign exchange gain of $177,310 during the year ended December 31, 2015, due
to the variation in the value of the United States dollar relative to the
Canadian dollar. No currency hedge policies are in place or are presently
contemplated.

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The natural resource industry is intensely competitive in all
of its phases, and the Company competes with many companies possessing greater
financial resources and technical facilities than itself.

Reference is made to the Company's annual report on Form 20-F
dated March 31, 2017 for additional risk factor disclosure (a copy of such
document can be obtained from SEDAR at www.sedar.com and EDGAR at
www.sec.gov).

Disclosure Controls and Procedures

Management is responsible for establishing and maintaining
adequate internal controls over disclosure controls and procedures, as defined
in National Instrument 52-109 Certificationof

DisclosureinIssuersAnnualandInterimFilingsof the Canadian Securities Administrators and Rules
13a-15(e) and Rule 15d-15(e) under the United States Exchange Act of 1934, as
amended.

Disclosure controls and procedures are designed to provide
reasonable assurance that all relevant information is gathered and reported to
senior management, including the Companys Chief Executive Officer and Chief
Financial Officer, on a timely basis so that appropriate decisions can be made
regarding public disclosure. As at December 31, 2016, management of the Company,
with the participation of the Chief Executive Officer and the Chief Financial
Officer, evaluated the effectiveness of the Companys disclosure controls and
procedures as required by Canadian securities laws. Based on that evaluation,
the Chief Executive Officer and the Chief Financial Officer concluded that, as
of December 31, 2016, the disclosure controls and procedures were adequately
designed and effective in ensuring that information required to be disclosed by
the Company it files or submits under Canadian securities laws is recorded,
processed, summarized and reported within the time periods specified by those
laws and that material information is accumulated and communicated to management
of the Company, including the Chief Executive Officer and the Chief Financial
Officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

Internal controls have been designed to provide reasonable
assurance regarding the reliability of the Companys financial reporting and the
preparation of financial statements for external purposes in accordance with
IFRS. As at December 31, 2016, the Companys Chief Executive Officer and Chief
Financial Officer evaluated or caused to be evaluated under their supervision
the effectiveness of the Companys internal control over financial reporting. In
making this assessment, management used the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission in Internal Control 
Integrated Framework of 2013. Based on that evaluation, the Chief Executive
Officer and the Chief Financial Officer concluded that, as of December 31, 2016,
the Companys internal control over financial reporting was effective to provide
reasonable assurance regarding the reliability of the Companys financial
reporting and the preparation of financial statements for external purposes in
accordance with IFRS.

The Company is required under Canadian securities laws to
disclose herein any change in the Companys internal control over financial
reporting that occurred during the Companys most recent period that has
materially affected, or is reasonably likely to materially affect, the Companys
internal control over financial reporting. There were no changes in the
Companys internal control over financial reporting during the year ended
December 31, 2016, that management believes have materially affected, or are
reasonably likely to materially affect, the Companys internal control over
financial reporting.

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It should be noted that a control system, including the
Companys disclosure controls and procedures system and internal control over
financial reporting system, no matter how well conceived can provide only
reasonable, but not absolute, assurance that the objective of the control system
will be met and it should not be expected that the Companys disclosure controls
and procedures system and internal control over financial reporting will prevent
or detect all reporting deficiencies whether caused by either error or fraud.

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