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MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE YEAR ENDED
DECEMBER 31, 2015

The following managements discussion and analysis
(MD&A), which is dated as of March 30, 2016, provides a review of
the activities, results of operations and financial condition of Loncor
Resources Inc. (Loncor or the Company) as at and for the
financial year of the Company ended December 31, 2015 (fiscal 2015) in
comparison with those as at and for the financial year of the Company ended
December 31, 2014 (fiscal 2014), 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 2015 and fiscal 2014
(the Annual Financial Statements). As the Companys 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 30, 2016, 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.

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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 62
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 totaling 2,077 square kilometers, while at the North
Kivu Project the Company has 49 PRs through its DRC subsidiary or under option
from third parties covering an area of approximately 13,375 square kilometers.
All of the 49 North Kivu PRs are currently under Force Majeure due to the poor
security situation in much of the North Kivu province.

During 2014, the Company significantly reduced its active
exploration efforts on the ground due to funding restraints with the field camps
placed on care-and-maintenance and the Beni and Kinshasa offices scaled down or
closed. Further assessment of exploration work undertaken in 2013 at Ngayu was
undertaken during 2014. Prospects have been selected for additional groundwork
including drilling once funding becomes available.

In addition, new historical data was obtained and assessed for
the North Kivu project in order to select target areas for follow up once the
security situation improves. Significant artisanal activity is currently taking
place in the Lutunguru area in the southern part of the North Kivu project.

In order to maintain the Ngayu PRs in good standing, all
statutory surface fees and provincial taxes were paid during 2015. Since all of
the North Kivu PRs are under Force Majeure, no surface or provincial fees are
currently required to be paid in respect of these PRs.

In a press release dated February 6, 2015, the Company
announced that Peter Cowley stepped down from his roles as President and Chief
Executive Officer of the Company for personal reasons but will continue to work
in an advisory role. Arnold Kondrat, Executive Vice President and a founding
director of the Company, was appointed as the interim President and Chief
Executive Officer of the Company while a search is conducted for a new President
and Chief Executive Officer.

In February 2015, the Company closed a non-brokered private
placement of 8,000,000 common shares of the Company at a price of Cdn$0.06 per
share for gross proceeds of Cdn$480,000. In March 2015, the Company closed a
non-brokered private placement of 3,000,000 common shares of the Company at a
price of Cdn$0.06 per share for gross proceeds of Cdn$180,000. Mr. Kondrat,
President, Chief Executive Officer and a director of the Company, purchased
3,500,000 of the shares issued under the February 2015 private placement and
500,000 of the shares issued under the March 2015 private placement.

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In January 2016, Loncor announced that its subsidiary, Loncor
Resources Congo SARL ("Loncor Congo"), has entered into a joint venture
agreement  with Randgold Resources (DRC) Limited
("Randgold"). This agreement provides for a joint venture (the "Joint
Venture") between Loncor Congo and Randgold covering all of the exploration
permit areas comprising Loncor Congo's 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.

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, 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 (49.1%) 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.

Mineral Properties in the Democratic Republic of the
Congo

The Companys exploration activities in the DRC have focused on
the following:

Ngayu Project

The Ngayu project covers an area of 2,077 square kilometers and
is found within the Orientale Province in the northeast of the DRC,
approximately 270 kilometers northeast of Kisangani. The Ngayu project is
situated within the Ngayu Archaean greenstone belt which is one of a number of
greenstone belts in the north-east Congo Archaean craton that includes the Kilo
and Moto (which hosts the Rand Gold Kibali mine) greenstone belts. These
Archaean greenstone belts are the northwestern extensions of the Lake Victoria
greenstone belt terrain that hosts a number of world class gold deposits
including Geita and Bulyanhulu.

During 2013, the gold rights relating to the Ngayu project,
which were previously held by the Company through an option agreement with Rio
Tinto Exploration RDC Orientale SPRL (Rio Tinto), were transferred by
Rio Tinto to the Companys wholly owned DRC subsidiary, Loncor Resources Congo
SARL, resulting in the Companys DRC subsidiary now holding directly the 13
exploration permits comprising the Ngayu project.

The Ngayu project includes a number of exploration prospects
already identified such as Makapela, Yindi, Itali, Mondarabe, Nagasa, Matete and
Anguluku.

Makapela prospect

The exploration focus at Makapela is a quartz vein system
within a sequence of basalts, thin units of banded iron formation, and dolerite
sills. The veins outcrop in three large artisanal pits (Main, North and Sele
Sele) which are each between 170 metres and 290 metres in length, located along
a strike of 2.2 kilometres.

As stated in the Companys press release of April 9, 2013, an
updated resource statement for Makapela was announced consisting of an Indicated
mineral resource of 614,200 ounces (2.20 million tonnes grading 8.66 g/t Au) and
an Inferred mineral resource of 549,600 ounces (3.22 million tonnes grading 5.30
g/t Au).

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Due to the sharp decline in the gold price during the second
quarter of 2013, it was decided not to incur any further expenditure on the
Makapela preliminary economic assessment, which had been initiated, until the
gold market improves.

Itali prospect

The Itali prospect is located in the Matete area, about 40
kilometres to the north-west of Yindi and 10 kilometres south of Makapela. This
prospect is situated on the southern limb of the west-south-west trending fold
in the Imva-Babeyru area, defined by magnetic highs interpreted to be caused by
banded ironstone formation (BIF) units. Mineralization was first
intersected by trench and core holes, which returned 42.50 metres grading 2.11
g/t Au and 38.82 metres grading 2.66 g/t Au respectively. Artisanal workings and
soil sampling results indicate that there is potential for the mineralized zone
to extend over a strike of approximately 1 kilometre.

Ground geophysics and further drilling will be required to
determine the strike potential, and to identify the higher-grade parts of the
mineralized package.

Mondarabe

Soil sampling and rock chip sampling at Mondarabe have to date
defined two anomalous areas, one in the north of the grid in the vicinity of the
Mondarabe artisanal workings, where +100 ppb values (maximum of 2350 ppb) occur
over a strike of 960 metres, and one in the southern part of the grid, on a hill
associated with folded BIF. Five diamond drill holes have been completed on the
northern anomaly where gold mineralization is associated mainly with
foliation-parallel quartz veins and veinlets within a series of metapelites,
intruded by sills of dolerite and minor quartz porphyry. Shearing has
preferentially affected the dolerite, and hydrothermal fluids have mineralized
the shear zones to varying degrees. The most significant mineralized
intersections included 10.46 metres grading 2.01 g/t Au, 2.14 metres grading
31.1 g/t Au and 0.66 metres grading 148 g/t Au.

Two drill holes were completed on the southern soil anomaly,
which is associated with folded BIF. Both holes intersected significant widths
of BIF, with individual units of up to 96 metres, interbedded with sericite
schist. The BIF is locally quartz-veined and pyritized, the sulphide occurring
as disseminated crystals, massive bands and patches. Despite the fairly
widespread hydrothermal alteration, the mineralized zones intersected were
relatively narrow, the best intersections in holes 6 and 7 being 3.23 metres
grading 3.78 g/t Au and 1.23 metres grading 9.46 g/t Au respectively.

Nagasa

The Nagasa prospect is located on the southern limb of the Imva
Fold, and is underlain by schists containing several BIF horizons, which strike
east-west and dip steeply to the north. Strike-parallel faults, probably
thrusts, are interpreted from the aeromagnetic data. A prominent BLEG anomaly is
found at Nagasa.

The area is characterized by a relatively complex regolith
cover, comprising a colluvial layer up to 3 metres thick containing abundant
quartz clasts, overlain by a fine grained silty clay layer, interpreted to be
palaeo-alluvium. The matrix of the colluvium is auriferous and is extensively
pitted by artisanal miners, soil anomalies occurring where the colluvial
material has been brought to surface. A +100 ppb soil anomaly with a strike of
3.5 kilometres is present in the eastern half of the grid, with values of up to 4,070 ppb Au. A
second soil anomaly with a strike of about 1 kilometre occurs in the west.

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Due to the overburden (regolith) covering much of Nagasa, it
was decided to undertake geophysical IP ground surveys with the objective of
detecting mineralized units below the regolith cover. IP surveys were conducted
over an initial 2 kilometre x 2 kilometre block at Nagasa, and three
well-defined anomalies were delineated. Additional IP surveys were subsequently
carried out to the east and west to determine the strike potential of the
anomalies. The southernmost Anomaly (Anomaly 1) has a strike length of at least
6 kilometres, and is associated with zones of colluvial workings and with
localized remnants of colonial mining activity. Pole-Dipole IP arrays were also
undertaken to produce pseudo cross sections which indicated that the higher
chargeability anomalies were located at depth.

Drilling was undertaken in 2013 with two diamond drill holes,
with a strike separation of 2,800 metres, drilled to test Anomaly 1. IP Anomaly
2 was defined over a 2.9 kilometre strike and is located 500 metres north of,
and parallel to Anomaly 1. Two wide spaced holes, 500 metres apart, were drilled
into Anomaly 2. Again the higher chargeability anomalies from the Pole-Dipole
sections appeared to be more prominent at depth and did not come to surface. One
core hole was also drilled into the 5 delineated 1.6 kilometre IP Anomaly 3
which is located about 1 kilometre north of Anomaly 2, and occurs on a
topographic high associated with the main BIF unit. Four other shallower diamond
drill holes were also completed by the Company at Nagasa. No significant
mineralized zones were drilled at IP Anomaly 2 and Anomaly 3 although broad
zones of hydrothermal alteration were intersected while at Anomaly 1, the most
significant intersections were 3.72 metres grading 3.17 g/t Au, 2.00 metres
grading 2.22 g/t Au and 0.41 metres grading 27.4 g/t Au.

Further closer spaced drilling is required to delineate
discrete mineralization within the broad hydrothermally altered zones at Nagasa.

Matete and Anguluku

IP surveys were undertaken during the third quarter of 2013 at
the Matete and Anguluku prospects where the surface expression of mineralization
may be masked by the presence of transported overburden. Both prospects were
initially identified as high priority BLEG targets and the airborne magnetic
data indicated structurally favourable (folded and faulted) BIF. At both Matete
and Anguluku, gradient array and pole-dipole IP surveys delineated a number of
IP anomalies requiring follow up core drilling.

Yindi

During the year 2013, previous drilling, trench and adit
sampling data for the Yindi prospect were reviewed and re-interpreted and a
number of additional drill targets were outlined for future drilling. The
Company believes that additional drilling has the potential to outline a
significant mineral resource at Yindi

North Kivu Project

The North Kivu project is situated in the North Kivu Province
in eastern DRC to the northwest of Lake Edward and consists of 49 exploration
permits totaling 13,375 square kilometers. All of these exploration permits are
currently under force majeure due to the security situation. Historical data has
been compiled from the colonial period of alluvial gold mining and exploration which has outlined ten gold prospects for
follow-up. Other gold prospects warranting follow up include Lutunguru, Lubero,
Makwasu, Lutela, Bilolo, Manzia, Mohanga and Ludjulu.

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In addition to gold, there are a number of alluvial platinum
occurrences in the project area including the type locality for the platinum
selenide mineral luberaoite near Lubero. To date no primary source has been
found for the alluvial platinum occurrences.

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.

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.

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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.

|                   |   | 2015       |   |   | 2014       |   |   | 2013        |  
|------------------ | - | ---------- | - | - | ---------- | - | - | ----------- | -
|Net loss           | $ | (2,417,247 | ) | $ | (2,902,710 | ) | $ | (27,224,451 | )
|Net loss per share | $ | (0.03      | ) | $ | (0.04      | ) | $ | (0.37       | )
|Total assets       | $ | 28,049,026 |   | $ | 29,951,398 |   | $ | 32,182,145  |  
|Total liabilities  | $ | 1,757,508  |   | $ | 1,768,613  |   | $ | 1,203,476   |  

For fiscal 2015, the Company had a net loss of $2,417,247, a
decrease from the prior year mainly due to reduced exploration activities and
cash conservation measures . 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. For fiscal
2013, the Company had a net loss of $27,224,451 mainly due to an impairment of
$25,801,443, 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, 2015, the Company reported a
net loss of $2,417,247, compared to a net loss of $2,902,710 for the year ended
December 31, 2014. 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, 2015 in the
expense categories described below as compared to the year ended December 31,
2014:

Travel and promotion

The Company incurred travel and
promotion expenses of $63,138 during the year ended December 31, 2015 which
increased from $47,819 during the prior year. Costs related to shareholder
relations and business promotion activities increased in the first quarter of
2015 due to corporate activities related to securing new financing.

Employee benefits

The Companys employee benefits expense
decreased to $182,630 for the year ended December 31, 2015 compared to $276,578
during the corresponding period in 2014. The decrease in costs was mainly due to
the reduction of permanent accounting staff in the first quarter of 2015.

Office and sundry

Office and sundry expenses decreased to
$70,549 during the year ended December 31, 2015 compared to $262,694 during the
year ended December 31, 2014. 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.

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Foreign exchange gain/loss

The Company recorded a foreign exchange
gain of $177,310 for the year ended December 31, 2015, compared to a foreign
exchange gain of $77,636 for the year ended December 31, 2014. This change was
due to fluctuations in the value of the United States dollar relative to the
Canadian dollar.

Compensation expense-share-based
payment

There was no compensation expense
incurred for share based payment during the year of 2015. The fair value of
employee share-based payment expense was $70,886 for the year ended December 31,
2014. This related to share-based compensation options issued to employees,
directors and officers of the Company that fully vested during 2014.

Impairment of exploration and
evaluation assets

In accordance with IFRS 6, the Company
assessed its exploration and evaluation assets for indications of impairment.
Due to fluctuations in gold prices during 2015 and 2014 coupled with the
reduction of the exploration budget, the Company conducted an impairment
analysis whereby the carrying value of the Ngayu exploration and evaluation
asset was assessed. The assets recoverable amount was calculated applying a
fair value of $15 per ounce of gold in the ground, which was provided by a
valuation analysis of an independent report on similar African exploration
companies, to the Ngayu projects Makapela mineral resource. Since the carrying
value of the asset was determined to be higher than its recoverable amount, an
impairment loss of $2,300,000 was recorded during the year ended December 31,
2015. For the year ended December 31, 2014, the Company calculated a fair value
of $17 per ounce and recorded an impairment loss of $2,183,233 with respect to
the Ngayu project. Exploration to date at North Kivu has not advanced to the
stage of being able to identify the quantity of possible resources available for
potential mining.

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 2015. 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.

|                   |   | 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      | )
|                   |   | 2014       |   |   | 2014        |   |   | 2014       |   |   | 2014       |  
|                   |   | 4thQuarter |   |   | 3rdQuarter  |   |   | 2ndQuarter |   |   | 1stQuarter |  
|                   |   |            |   |   |             |   |   |            |   |   |            |  
|Net loss           | $ | (2,370,628 | ) | $ | (89,822     | ) | $ | (203,493   | ) | $ | (238,767   | )
|Net loss per share | $ | (0.03      | ) | $ | (0.00       | ) | $ | (0.00      | ) | $ | (0.00      | )

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 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.

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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. 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. The Companys net loss for the first quarter of 2015
decreased to $64,850 compared to a net loss of $2,370,628 in the fourth quarter
of 2014. The net loss incurred in the fourth quarter of 2014 was significantly
impacted by an impairment loss of $2,183,233 recorded on the exploration and
evaluation assets for the Ngayu project, as well as higher expenses recorded for
year-end audit fees and employee benefits incurred during the fourth quarter of
2014. The Companys net loss for the third quarter of 2014 decreased to $89,822
compared to a net loss of $203,493 in the second quarter of 2014 due to a
decrease in expenses incurred for employee compensation. The Companys net loss
for the second quarter of 2014 decreased to $203,493 compared to a net loss of
$238,767 in the first quarter of 2014 due mainly to a reduction in office
expenses relating to listing fees that were incurred in the first quarter of
2014.

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 significant drop in the gold
price has made it more difficult to secure equity financing for many exploration
companies.

As at December 31, 2015, the Company had cash and cash
equivalents of $8,255 and a working capital deficit of $1,626,788 compared to
cash and cash equivalents of $55,631 and a working capital deficit of $1,600,989
as at December 31, 2014.

During the year ended December 31, 2015, the Company incurred
cash exploration expenditures of $497,861 (year ended December 31, 2014,
$671,011). A breakdown of all exploration expenditures by project is presented
below under Exploration and Evaluation Expenditures.

In February 2015, the Company closed a non-brokered private
placement of 8,000,000 common shares of the Company at a price of Cdn$0.06 per
share for gross proceeds to the Company of Cdn$480,000. In March 2015, the
Company closed a non-brokered private placement of 3,000,000 common shares of
the Company at a price of Cdn$0.06 per share for gross proceeds to the Company
of Cdn$180,000.

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In February 2016, the Company 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 to the Company of Cdn$1,005,000. The proceeds of this
private placement will be used to: (1) repay short term, non-interest bearing
loans totaling Cdn$825,000 provided to the Company by Mr Kondrat; and (2) pay
corporate and public company costs of the Company for the next six months.

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, 2015.

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, 2015:

|                                 |   | 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 |  

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The following table provides a breakdown of the Company's
exploration and evaluation expenditures incurred during the year ended December
31, 2014:

|                                       |   | North Kivu
      Project |  |   | Ngayu Project |   |   | Total      |  
|-------------------------------------- | - | ------------------------ |  | - | ------------- | - | - | ---------- | -
|Balance 12/31/2013                     | $ | 9,936,202                |  | $ | 20,957,256    |   | $ | 30,893,458 |  
|                                       |   |                          |  |   |               |   |   |            |  
|Field camps expenses                   |   | 378                      |  |   | 13,898        |   |   | 14,276     |  
|Geophysics                             |   | 1,750                    |  |   | 33,250        |   |   | 35,000     |  
|Geochemistry                           |   | 475                      |  |   | 61            |   |   | 536        |  
|Geology                                |   | -                        |  |   | 50            |   |   | 50         |  
|Helicopter                             |   | -                        |  |   | 310           |   |   | 310        |  
|Professional fees                      |   | 31,412                   |  |   | 4,935         |   |   | 36,347     |  
|Business promotion                     |   | 5,008                    |  |   | 16,643        |   |   | 21,651     |  
|Travel                                 |   | 744                      |  |   | 23,009        |   |   | 23,753     |  
|Office and sundry                      |   | 4,153                    |  |   | 97,710        |   |   | 101,863    |  
|Interest and bank charges              |   | 12,686                   |  |   | 8,445         |   |   | 21,131     |  
|Consulting fees                        |   | 18,750                   |  |   | -             |   |   | 18,750     |  
|Salaries                               |   | 38,229                   |  |   | 330,942       |   |   | 369,171    |  
|Stock based compensation               |   | -                        |  |   | 35,943        |   |   | 35,943     |  
|Amortization                           |   | 10,697                   |  |   | 167,654       |   |   | 178,351    |  
|Loss(Gain) on disposal of
      assets |   | 11,475                   |  |   | (34,884       | ) |   | (23,409    | )
|                                       |   |                          |  |   |               |   |   |            |  
|Other                                  |   | 2,042                    |  |   | 44,937        |   |   | 46,979     |  
|Expenditures for the period            |   | 137,799                  |  |   | 742,903       |   |   | 880,702    |  
|Impairment Loss                        |   | -                        |  |   | (2,183,233    | ) |   | (2,183,233 | )
|Balance 12/31/2014                     | $ | 10,074,001               |  | $ | 19,516,926    |   | $ | 29,590,927 |  

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 30, 2016, the Company had outstanding
151,439,732 common shares and 3,265,000 stock options to purchase common shares.

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 year ended December 31,
2015 and December 31, 2014 was as follows:

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|                                          |   | December 31, 2015 |  |   | December 31, 2014 | 
|----------------------------------------- | - | ----------------- |  | - | ----------------- | 
|Salaries                                  | $ | 145,067           |  | $ | 168,000           | 
|Employee retention allowance              | $ | 9,090             |  | $ | 14,000            | 
|Compensation expense-share-based payments | $ | -                 |  | $ | 59,060            | 
|                                          | $ | 154,157           |  | $ | 241,060           | 

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

As at December 31, 2015, an amount of $12,619 was due from
Delrand Resources Limited, a company with common directors, related to common
expenses in the DRC (December 31, 2014 - $9,880).

As at December 31, 2015, an amount of $527,826 relating to
advances provided to the Company was due to Arnold Kondrat, a director and
officer of the Company (December 31, 2014 - $416,063). As at December 31, 2014,
an amount of $30,668 was due to Banro Corporation, a company with a common
director, related to common expenses in the DRC. As of January 1, 2015, Banro
Corporation is no longer considered a related party.

As at December 31, 2015, an amount of $62,236 was due to Gentor
Resources Inc., a company with common directors, related to common expenses
(December 31, 2014 - $24,395).

|                       |  | December 31, 2015 |  |  | December 31, 2014 | 
|---------------------- |  | ----------------- |  |  | ----------------- | 
|                       |  | $                 |  |  | $                 | 
|Due from related party |  | 12,619            |  |  | 9,880             | 
|Due to related parties |  | 590,062           |  |  | 471,126           | 

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 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.

An amendment to IAS 1, Presentation of Financial Statements
(IAS 1) was issued by the IASB in December 2014. The amendment clarifies
principles for the presentation and materiality consideration for the financial
statements and notes to improve understandability and comparability. The
amendment to IAS 1 is effective for annual periods beginning on or after January
1, 2016. 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.

Exploration and evaluation expenditure

The application of the Companys accounting policy for
exploration and evaluation expenditure requires 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.

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.

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.

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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.

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.

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.

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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.

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.

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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.

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.

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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 $177,310 during the year ended December 31, 2015, compared to a
foreign exchange gain of $77,636 during the year ended December 31, 2014. 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.

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 30, 2016 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 CertificationofDisclosureinIssuers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, 2015, 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, 2015, 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, 2015, 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, 2015,
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.

17

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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 interim 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, 2015, that management believes have materially affected, or are
reasonably likely to materially affect, the Companys internal control over
financial reporting.

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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