First Quarter Report 2015 For the three months ended March 31, 2015

AVT.TSX.V

(A Development Stage Company)

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the three months ended March 31, 2015

TABLE OF CONTENTS HIGHLIGHTS .......................................................................................................................................2 2015 OUTLOOK ..................................................................................................................................3 CORPORATE DEVELOPMENTS .............................................................................................................5 MARKET TRENDS ...............................................................................................................................6 AVANTI KITSAULT PROJECT ................................................................................................................8 FINANCING ...................................................................................................................................... 11 SELECTED QUARTERLY INFORMATION .............................................................................................. 12 RESULTS OF OPERATIONS ................................................................................................................. 13 LIQUIDITY AND CAPITAL RESOURCES ................................................................................................ 14 TRANSACTIONS WITH RELATED PARTIES ........................................................................................... 16 COMMITMENTS ............................................................................................................................... 17 OUTSTANDING SHARE DATA ............................................................................................................ 17 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS ..................................................................... 18 EVENTS SUBSEQUENT TO MARCH 31, 2015 ....................................................................................... 18 DISCLOSURE CONTROLS AND PROCEDURES ...................................................................................... 18 RISKS AND UNCERTAINTIES .............................................................................................................. 18 CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS ..................................... 20 OTHER INFORMATION ..................................................................................................................... 21

The following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is relevant to an assessment and understanding of the financial condition and operations of Alloycorp Mining Inc. (“Alloycorp” or the “Company”). This MD&A is prepared as of May 8, 2015 and should be read in conjunction with the unaudited condensed consolidated interim financial statements and the related notes for the three months ended March 31, 2015 and 2014, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. This MD&A should also be read in conjunction with the audited consolidated annual financial statements and the related notes for the year ended December 31, 2014 and the related Management’s Discussion and Analysis. Unless otherwise indicated, all amounts are in Canadian dollars. This MD&A includes forward-looking statements that are subject to risk factors set out in a cautionary note below. The reader is cautioned not to place undue reliance on forward-looking statements. For the purposes of preparing this MD&A, the Company considers the materiality of information. The Company considers information to be material if: (i) the disclosure of such information would significantly alter the total mix of information available to reasonable investors; (ii) such information would be considered important to a reasonable investor in making an investment decision; or, (iii) a significant change in the value of the Company’s shares could reasonably be expected from the release of such information. All relevant circumstances are considered when the Company evaluates the materiality of information to be disclosed. On November 28, 2014, shareholders of the Company approved the change of the Company’s name from Avanti Mining Inc. to Alloycorp Mining Inc. The Company’s common shares are listed on the TSX Venture Exchange (TSX-V: AVT). Continuous disclosure materials are available on SEDAR at www.sedar.com and on the Company’s website at www.alloycorp.com.

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Alloycorp is focused on the development of the Avanti Kitsault Project, a former molybdenum producing property located in the Skeena Mining District of British Columbia, Canada. The Avanti Kitsault Project is fully permitted for construction. During the first quarter of 2015, the Company continued pre-construction activities at the site and has been progressing towards successful financing of the project, with the aim to begin production in 2017. The Company’s vision is to be an innovative Canadian-based mining business that is recognized for operating with integrity, profitability and excellence, while providing commodities that supply the global alloy steel industry.

HIGHLIGHTS Avanti Kitsault Project • On April 29, 2015, the Company announced it will transition all engineering services from AMEC

Americas Inc. (“AMEC”) to DRA Taggart (“DRA”). Concurrent with the transition, DRA will conduct a Front End Engineering Design Study (“FEED Study”) aimed at confirming engineering and procurement work done to-date. The FEED Study will provide better definition of the overall project execution plan and update estimated capital and operating expenditures, while reducing risk for the Avanti Kitsault Project. Upon completion of the FEED Study, DRA will present proposed project execution alternatives to the Company. As well, until the FEED Study is completed, no further construction activities are expected to be undertaken and during this period, overall site management will be transitioned to the Company’s team.

• Overall engineering and procurement for the Avanti Kitsault Project was approximately 60% complete at the end of April 2015.

• The Company is developing a revised estimate of initial construction capital, sustaining capital,

metallurgical recoveries and operating costs for the Avanti Kitsault Project, based on the advances in engineering, procurement and metallurgical test work. This revised estimate is expected to be completed in the second half of 2015 at which time the Company intends to file an updated NI 43-101 Technical Report.

• The restoration and upgrade of the Nass River Bridge that provides primary road access to the Avanti

Kitsault Project was completed in early March 2015. • Rough grading of the earthworks for the Avanti Kitsault Project’s camp and processing plant area were

substantially completed in April 2015.

• The Company officially opened its Avanti Kitsault Project operations office in Terrace, British Columbia. The office is part of the Company’s long-term commitment to become part of the community.

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Financing • On March 30, 2015, the Company announced, pursuant to the July 29, 2014 debt financing mandate

letter agreement, it has secured credit commitments of US$225 million from two lenders, while another lender declined participation in the facility. No further credit commitments are expected until after completion of the FEED study by DRA Taggart.

• On March 30, 2015, the Company also announced that it has received a conditional equity investment commitment of US$140 million from Resource Capital Fund VI L.P. (“RCF VI”), of which US$50 million will be used to repay the outstanding secured bridge loan facility with Resource Capital Fund IV L.P. (“RCF IV”) and RCF VI (together, “RCF”). In addition to the RCF commitment, the Company has also received a conditional equity investment commitment of approximately US$70 million from several limited partners of RCF.

• RCF elected to extend the maturity dates of its outstanding loans with the Company to May 31, 2015. Corporate Activities • In March 2015, Luke Klemke, General Manager of Avanti Kitsault Project, tendered his resignation to

pursue other career opportunities.

• On March 26, 2015, Ken Pickering resigned as director of the Company in order to devote more time to his increasing responsibilities as director of other public companies.

• On February 6, 2015 Bernée Bolton was appointed as Vice President, Corporate Responsibility.

• On February 16, 2015, Shane Uren’s role was expanded to include responsibility for Health and Safety

and his title was accordingly changed to Vice President Safety, Health and Environment.

• Mark Smith decided not to stand for re-election to the Board of Directors of Alloycorp at the Company’s annual general meeting held on May 8, 2015.

2015 OUTLOOK

Alloycorp’s ability to increase shareholder value will be affected by the financing and development of the Avanti Kitsault Project; current and future molybdenum and silver commodity prices; and, its ability to advance the overall strategy of becoming the unique supplier of steel alloy metals. For 2015, the Company’s activities are focused on the successful financing of the Avanti Kitsault Project, and subject to adequate funding being available, further advancing the development of the Avanti Kitsault Project, strengthening First Nations and other community relationships, and building the workforce required to support anticipated activity levels. The specific plan for the Company’s activities in 2015 are as follows:

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Financing Activities The Company is continuing to pursue credit commitments from the lenders under the July 29, 2014 mandate letter (the “Mandate Letter”) for a US$612 million project debt facility to develop the Avanti Kitsault Project. As at May 8, 2015, credit commitments of US$225 million have been provided by two lenders, while one of the six original lenders declined participation in the facility. No further credit commitments are expected until after completion of the FEED study by DRA Taggart. In addition to the debt financing, Alloycorp continues to pursue a range of equity financing alternatives to complete construction capital requirements. As at May 8, 2015, the Company has received conditional equity financing commitments of US$140 million from RCF VI, of which US$50 million will be used to repay the outstanding secured bridge loan facility. Additionally, the Company has also received a conditional equity investment commitment of approximately US$70 million from several limited partners of RCF VI. The completion of the secured financing facilities and the equity investments are subject to conditions including ongoing due diligence, negotiation and execution of definitive documentation, negotiation of terms, regulatory approvals and other customary conditions. The Company will also continue to evaluate the potential disposition of a minority interest in the Avanti Kitsault Project to a strategic investor as well as a silver stream sale to a financial partner. Despite management’s best efforts, there is no certainty the project debt or any equity offering or strategic partnership will be successfully completed thereby, potentially jeopardizing the final development of the Avanti Kitsault Project. Avanti Kitsault Project Development Activities On April 29, 2015, the Company announced it will transition all engineering from AMEC to DRA. Concurrent with the transition, DRA will conduct a FEED Study aimed at confirming engineering and procurement work done to-date, providing a better definition of the overall project execution plan and update estimated capital and operating expenditures, and strengthening overall project efficiencies and controls. Upon completion of the FEED Study, DRA will present proposed project execution alternatives to the Company, including engineering, procurement and construction, lump sum turnkey, build own operate and transfer, and variations of these models. Until completion of the DRA FEED Study, no further construction activities are expected to be undertaken. Alloycorp is developing a revised estimate of initial construction capital, sustaining capital, metallurgical recoveries and operating costs for the Avanti Kitsault Project, based on the advances in engineering, procurement and metallurgical test work. This work is intended to provide greater clarity on costing and scope going forward. The Company is currently completing studies required for an Environmental Management Act Operations Discharge (“Operations Discharge”) permit for the Avanti Kitsault Project. The permit is required before tailings can be discharged from the processing facility, which is not expected to occur before 2017. Alloycorp expects to receive the Operations Discharge permit in 2016, which is well in advance of the planned commissioning of the plant and production of tailings.

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While the Company arranges full financing for the Avanti Kitsault Project, it will manage available cash resources while maintaining the project site in a safe and environmentally sound manner. Implementation of environmental monitoring and protection programs, including water and waste management will continue to be managed by the Company’s personnel. First Nations and Community Relations Activities In 2014, the Company entered into a comprehensive Co-operation and Benefits Agreement (“CBA”) with the Nisga’a Nation. This agreement recognizes and formalizes the working relationships between the Nisga’a Nation and the Avanti Kitsault Project, and is a vital step in the development of the project. The Company is focused on continuing to build and strengthen its relationship with the Nisga’a Nation and all communities in the Nass River area. Recently, the Company co-presented with the Nisga’a Nation at the Mineral Exploration Round-Up in Vancouver on the unique environmental agreement reached between the two parties. The agreement illustrates the ability of the Company and Nisga’a Nation to work through challenging and complex issues and to arrive at creative and beneficial solutions for both parties. Further, the Company continues to work closely with the staff of the Nisga’a Employment and Skills Training (“NEST”) office. At present, the Avanti Kitsault Project and NEST are partnering to explore opportunities with the Northwest Community College for the development of mining specific skills training sessions. The Company is committed to identifying opportunities with local communities near the Avanti Kitsault Project site and to using the services of local businesses throughout all phases of the mine life from construction through operations, to decommissioning and reclamation. The construction management team oversees a fair and transparent competitive tendering process that includes consideration of local procurement. This is a component of the Company’s Environmental Assessment Certificate issued by the province of British Columbia and an element of the CBA with the Nisga’a Nation. The final decision on awarding contracts resides with management of the Company. Workforce Activities The Company continues its plan to augment and strengthen its management team as it identifies key positions that are required to successfully develop and build the Avanti Kitsault Project. Recruitment for these positions will commence immediately upon finalization of project financing. As with the tendering process, the Company’s goal is to engage the local community whenever possible. To achieve this and to honour and implement the CBA with the Nisga’a Nation the Company will continue with the activities it has initiated in order to recruit a diversified workforce immediately upon finalization of full project financing.

CORPORATE DEVELOPMENTS Senior Management On February 6, 2015, Bernée Bolton was appointed as Vice President, Corporate Responsibility. Ms. Bolton has more than 20 years of experience providing strategic direction on corporate priorities, community engagement and communications in the public and private sectors. Most recently, Ms. Bolton was the Assistant Director of Communications with the Canada Border Services Agency ("CBSA") where she led the CBSA's communications directorate for British Columbia and the Yukon. Ms. Bolton studied

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at Langara College and BCIT, and has completed other course work related to management development and conflict resolution. On February 16, 2015, Shane Uren was designated as Alloycorp’s Vice President Safety, Health and Environment. Mr. Uren is a Registered Professional Biologist in British Columbia with a Masters in Civil Engineering from the University of British Columbia. Mr. Uren has experience in the management of environmental assessments of mining projects in British Columbia, Canada and overseas including BHP Billiton's Ekati Diamond Mine, Cambior's Rosebel Mine, Inco Ltd.'s Goro Project, Novagold's Galore Creek Project, and Thompson Creek Metal's Davidson Project. Directors Ken Pickering resigned on March 26, 2015 in order to devote more time to his increasing responsibilities as director of other public companies. Mark Smith decided not to stand for re-election at the Company’s annual general meeting held on May 8, 2015. The Company is in the process of identifying qualified and experienced individuals to fill the two vacant positions on the Board.

MARKET TRENDS Fluctuations in spot and forecast commodity prices combined with generally uncertain conditions of the capital markets for junior mining companies may result in the Company requiring more time to obtain full project financing. Delays in obtaining project financing would require the Company to modify and restrict some of its operating and project development spending in 2015 and beyond. The price of molybdenum is a key element for evaluating the potential shareholder returns from the Avanti Kitsault Project. The spot prices for molybdenum and silver have decreased since-mid 2014. Molybdenum prices are expected to increase over the next few years, in anticipation of an expected supply deficit around 2019 or 2020. Molybdenum Market Approximately 70% of molybdenum is used in steel alloying. Other metallurgical uses such as super alloys and cast irons account for an additional 19% of total molybdenum demand. Non-metallurgical applications account for the remaining share. Molybdenum, when added to steel, enhances the strength, toughness, wear, and corrosion resistance of stainless steel, which is commonly used for pipelines, storage tanks, bridges, aircraft engines and other products. In inhospitable environments such as extreme temperatures, deep-water, and other locations exposed to corrosive elements, molybdenum-bearing products are employed to optimize performance. Non-metallurgical, specialty chemical end-uses include catalysts for petroleum refining, lubricants, and pigments. The table below illustrates in which industry sectors molybdenum is used.

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Demand for molybdenum is fairly price inelastic as there are few substitutes in its major applications and it is typically used in very small quantities in end uses that require specific properties. Molybdenum demand is correlated to industrial production rather than discretionary trends in consumer spending. The molybdenum market is comprised of two distinct types of sources of mine supply. Approximately 51% of current global supply comes from copper-molybdenum deposits located primarily in the United States, Chile, and Peru, where molybdenum is produced as a by-product of copper production. Primary molybdenum deposits, primarily located in China, United States, and Canada, account for the remaining output.

19.0%

14.3%

13.7% 12.6%

8.8%

7.8%

7.0%

5.8%

11.0%

Oil and Gas

Chemical / Petrochemical

AutomotiveMechanicalEngineering

ProcessIndustry

Other Transportation

Power Gen

Building / Construction

Other

• Energy storage facilities are required for excess production

• Investment into energy infrastructure has continued

• Re-tooling to support model, new body designs• Engineered steel supporting higher performance engines

and designs

Source: SMR, IMOA

$0.00

$3.00

$6.00

$9.00

$12.00

$15.00

$18.00

(15.0)

(10.0)

(5.0)

0.0

5.0

10.0

15.0

2012 2014 2016E 2018E 2020E 2022ESource: CPM Group, management estimates

Supply surplus Supply deficit Price (USD/lb)

Supp

ly Su

rplu

s / (D

efici

t), 00

0 to

nnes

Avanti Kitsault full production

Molybdenum

Price, US$ per lb

10,000+ tpa deficit by 2022

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The Avanti Kitsault Project is expected to be in full production in 2018, at which time the forecasted price of molybdenum is expected to be higher than US$15.00 per pound. As illustrated in the chart above, the rise in prices is expected to occur in anticipation to the expected supply deficit. This is compared to the April 1, 2014 Technical Report which forecasted molybdenum prices between US$12.02 and US$16.14 per pound. The Company’s future financial performance is dependent on many external factors including the prices of certain precious and base metals. The markets for these commodities are volatile and difficult to predict as they are impacted by many factors including international political, social, and economic conditions. These conditions, combined with volatility in the capital markets, could materially affect the future financial performance of the Company. Foreign Exchange Rates The majority of the Company’s operating expenses and a significant portion of the estimated construction and sustaining capital are denominated in Canadian dollars. Project debt, certain capital expenditures and the future revenues from the sale of molybdenum will be denominated in US dollars. As a result, the Company has foreign currency exposure with respect to items denominated in US dollars.

AVANTI KITSAULT PROJECT

The Avanti Kitsault Project is located 140 km north of Prince Rupert, British Columbia and adjacent to tidewater on Alice Arm in the Skeena Mining Division. The Avanti Kitsault Project was a producer of molybdenum between 1967 and 1972, processing a total of 9,329,669 tonnes of ore grading 0.112% Mo. From 1981 to 1982, under the ownership of Amax, Inc., 4,069,548 tonnes of low-grade stockpiled and newly mined ore were milled, grading 0.076% Mo. Total production on the property during both periods was approximately 32 million pounds (14,500 tonnes) of molybdenum. The mine ceased operations in 1982 due to low molybdenum prices, but as detailed in the April 1, 2014 Technical Report, there is an estimated 420.3 million pounds of molybdenum reserves remaining in place, consisting of 263.6 million pounds of proven reserves at a molybdenum grade of 0.092% and 156.7 million pounds of probable reserves at a molybdenum grade of 0.070%.

CAD$/US$

Bank of Canada average noon time rateQ1 2015 0.8057 Q4 2014 0.8806 Q3 2014 0.9183 Q2 2014 0.9170 Q1 2014 0.9064

Bank of Canada noon time rate March 31, 2015 0.7885

Long-term average exchange rate utilized in:

April 1, 2014 Technical Report 0.8800

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Technical Report Updates On April 1, 2014, the Company voluntarily filed on SEDAR the Kitsault Molybdenum Project, British Columbia, Canada, NI 43-101 technical report (“April 1, 2014 Technical Report”), with an effective date of March 14, 2014. The April 1, 2014 Technical Report was prepared by Scott Fulton, P. Eng.; David G. Thomas, P. Eng.; Ramon Mendoza Reyes, P. Eng.; Simon Allard, P. Eng.; Peter Healey, P. Eng.; Michael Levy, P. Eng.; and, Bruno Borntraeger, P. Eng., each of whom is a qualified person as defined in National Instrument 43-101 – “Standards of Disclosure for Mineral Projects” and independent of the Company. Since late 2014, the Company has been developing a revised estimate of initial construction capital, sustaining capital, metallurgical recoveries and operating costs for the Avanti Kitsault Project, based on the advances in engineering, procurement and metallurgical test work. This revised estimates is expected to be completed in the second half of 2015 at which time the Company intends filing an updated NI 43-101 Technical Report. Construction Activities The Avanti Kitsault Project is fully permitted for construction and aims to begin production in 2017. Currently, work is progressing at the site as the Company prepares for the spring season. With the warmer weather, the Company will switch from managing snow to concentrating on water management, sediment and erosion control, and other environmental protection measures. More than half of the necessary engineering designs for the Avanti Kitsault Project have been completed, and procurement of goods and services required to build the mine is underway. Road construction reached the processing facility site in October 2014, enabling the Company to mobilize contractors for earthworks and site preparation at the processing facility site. Work has been completed on the access road on some sections to reduce grades, maintain water management measures and armor cut slopes to prevent slides. During the first quarter of 2015, the expansion of the existing camp from a capacity of 50 to 150 persons was completed, including the installation of a new kitchen, dining facilities and recreation units. Construction work to upgrade the Nass River bridge, which is on a forest service road used to access the Avanti Kitsault Project, commenced in October 2014 and on November 19, 2014, the bridge was taken out of commission to facilitate the replacement of the bridge span and maintenance work on the piers. This work was completed in early March 2015 and has allowed better access to the site as pre-construction activities continue. Overall engineering and procurement for the Avanti Kitsault Project was approximately 60% complete at April 30, 2015. During the quarter ended March 31, 2015, the following engineering and construction related activities occurred: • Rough grading for the camp and processing site was completed; • Design of process flow and instrumentation control diagrams were advanced; • Detailed design of the tailings management facility commenced in April 2014; • Site water management and erosion control design commenced;

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• Detailed design commenced for potable water supply systems, sediment settling ponds and reclaim

barge; and • The Company’s management team was expanded to oversee management of the Avanti Kitsault

Project and related construction activities, including coordination of safety and quality efforts.

Environmental Protection Environmental Approvals and Permitting All primary permits required to complete construction have now been issued. Additionally, the Company is currently completing studies required for an Operations Discharge permit. Alloycorp expects to receive the Operations Discharge permit in 2016, which is well in advance of the commissioning of the plant and production of tailings. All requisite Government of Canada federal permits have been obtained. Environmental Projects The Company formed an Independent Engineering Review Panel (“IERP”) in [August] 2014, comprised of experienced and respected geotechnical engineers to work in reviewing all aspects of the geotechnical engineering and waste management practices at the Avanti Kitsault Project. The appointment of the IERP demonstrates the Company’s continuing commitment to protecting the environment and the communities in which i t o perates. The objectives of the IERP include: • Provision of recommendations to the Company’s management on tailings dam technology; • Review of the seismic characteristics at site; • Examination of the design of the dam and the water management plan; • Review of land reclamation and mine closure requirements; and • Analysis of site investigation results. In addition, technical representatives from the British Columbia Ministry of Energy and Mines are also participating in IERP meetings. Since its formation, the IERP has reviewed the initial tailings embankment design, water management strategy and construction execution plan. The panel continues to provide feedback on the Avanti Kitsault Project’s tailings management facility and other key geotechnical aspects of the project. The Company is also focused on continuing implementation of environmental monitoring and protection programs at the Avanti Kitsault Project including, for example: • Monitoring of surface water and groundwater; • Monitoring the effectiveness of sediment and erosion control measures; • Preparation for spring snow melt; • Ongoing monitoring of the aquatic and marine environment; • Soil salvage and storage activities for reclamation planning; • Ongoing vegetation assessments; • Ongoing wildlife and sensitive wildlife habitat surveys; • Preventative measures to minimize vehicle-wildlife interactions along the transportation route;

and, • Waste management, spill prevention and response preparedness.

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FINANCING The Company has entered into various loan agreements with RCF. During 2014, as a result of common shares being issued for the payment of outstanding interest obligations and fees, RCF’s direct share ownership exceeded 50% of the outstanding common shares of Alloycorp. RCF IV and RCF VI are managed by RCF Management L.L.C. (“RCF Management”). RCF IV and RCF VI are considered related parties of the Company as a result of their share ownership and a director of the Company is a member of RCF Management’s senior management. At May 8, 2015, RCF owned approximately 56.1% of Alloycorp’s outstanding common shares. 2014 Bridge Loan On November 14, 2014, the Company entered into the 2014 Bridge Loan, with proceeds to be used to continue advancing detailed engineering and ongoing construction activities at the Avanti Kitsault Project. The Company drew down US$18 million for the year ended December 31, 2014. During the three months ended March 31, 2015, the Company drew down a further US$17 million. Pursuant to its original terms, the 2014 Bridge Loan was repayable on the earlier of (i) January 30, 2015, (ii) a direct or indirect sale or joint venture of a material interest, offtake, metal stream or royalty in the Avanti Kitsault Project, or (iii) completion of an equity or other type of financing. On January 30, 2015, the Company entered into an agreement to extend the maturity date of the 2014 Bridge Loan. The terms of the extension provided for the scheduled maturity date of the facility be extended from January 30, 2015 to March 31, 2015, unless RCF VI, in its sole discretion, elects to further extend the maturity date in one month increments thereafter through and until June 30, 2015. The extension also provided amended tranche availability dates whereby US$7 million would be available from January 30, 2015 to March 31, 2015, and US$15 million would be available from January 30, 2015 to March 31, 2015. No consideration was payable by the Company to RCF VI in connection with the extension. RCF VI has exercised its option to extend the maturity and availability of US$15 million of the facility until May 31, 2015. Project Debt Facility and Strategic Partner Involvement As discussed above in the 2015 Outlook section, the Company continues to pursue credit commitments from the banks mandated on July 29, 2014. On March 30, 2015, the Company announced that it had received credit commitments of US$225 million from two of the banks, while another bank declined participation in the facility. No further credit commitments are expected until after completion of the FEED study by DRA Taggart. On March 30, 2015, the Company announced that it had received a conditional equity investment commitment (the "RCF Commitment") of US$140 million from RCF, of which US$50 million will be used to repay the 2014 Bridge Loan with RCF. In addition to the RCF Commitment, the Company has also received a conditional equity investment commitment of approximately US$70 million from several limited partners of RCF. The completion of the secured financing facilities and the equity investments are subject to conditions including ongoing due diligence, negotiation and execution of definitive documentation, negotiation of terms, regulatory approvals and other customary conditions. There is no certainty that the transaction contemplated in the Mandate Letter, equity offerings or establishing a strategic partnership will be successfully completed.

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New Bridge Loan During the three months ended March 31, 2015, the Company settled US$0.5 million ($0.6 million) of interest payable on the New Bridge Loan for the period up to December 31, 2014 by issuing 11.6 million common shares at the fair value of $0.8 million and accordingly, the Company recorded a loss on settlement of obligations of $0.2 million. In April 2015, the Company settled US$0.5 million ($0.6 million) of interest payable on the New Bridge Loan for the period up to March 31, 2015 by issuing 11.9 million common shares at the fair value of $0.6 million. RCF has exercised its option to extend the maturity of the New Bridge Loan to May 31, 2015. Pre-construction Loan from Resource Capital Fund VI During the three months ended March 31, 2015, the Company settled US$1.0 million ($1.2 million) of interest payable on the Pre-construction Loan for the period up to December 31, 2014 by issuing 23.2 million common shares at a fair value of $1.6 million and accordingly, the Company recorded a loss on settlement of obligations of $0.4 million. In April 2015, the Company settled US$1.0 million ($1.3 million) of interest payable on the Pre-construction Loan for the period up to March 31, 2015 by issuing 23.8 million common shares at a fair value of $1.2 million. RCF has exercised its option to extend the maturity of the Pre-construction Loan to May 31, 2015.

SELECTED QUARTERLY INFORMATION The following selected financial data is from the Company’s unaudited quarterly financial statements for the last eight quarters.

Note: (1) Diluted loss per share incorporates the required adjustments to income for the period related to the New Bridge and Pre-construction

Loans and the additional common shares that would have been issued had these loans been converted. The basic and diluted loss per share calculations resulting in the same amount are due to the anti-dilutive effect of outstanding stock options and warrants.

Mineral property expenditures are associated with the development of the Avanti Kitsault Project. In 2015 and 2014, these expenditures are primarily related to upgraded road access, earthworks,

MineralIncome Income/(loss) per share Property Total

Revenue (Loss) Basic Diluted(1) Expenditures AssetsFor the three months ended:

March 31, 2015 - (20,040,320) (0.03) (0.03) 19,746,115 173,194,946 December 31, 2014 - 11,753,931 0.02 (0.00) 24,999,556 154,233,590

September 30, 2014 - 7,622,365 0.01 (0.00) 10,967,668 127,910,720 June 30, 2014 - (46,301,184) (0.10) (0.10) 7,960,505 123,373,380

March 31, 2014 - (5,650,460) (0.01) (0.01) 4,200,208 93,670,639 December 31, 2013 - (2,225,791) (0.01) (0.01) 3,754,294 93,620,709

September 30, 2013 - (1,375,017) (0.00) (0.00) 3,770,804 81,070,513 June 30, 2013 - (2,566,300) (0.01) (0.01) 1,773,653 76,768,725

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engineering, technical studies and environmental assessments. Prior period expenditures are primarily related to technical studies, environmental assessments and drilling activities. Fluctuations in the income or loss for the quarters are primarily due to the increased activities related to the development of the Avanti Kitsault Project, the additional interest expense associated with the additional borrowings, fluctuations in foreign exchange rates and the fluctuation in the fair value of derivative instruments.

RESULTS OF OPERATIONS Three months ended March 31, 2015 and 2014

The Company recorded a loss of $20,040,320 ($0.03 per share) for the three months ended March 31, 2015 compared to a loss of $5,650,460 ($0.01 per share) for the comparable period in 2014. The primary reasons for the $14,389,860 increase in the loss for the period is as follows:

• The Company recorded a loss on the change in the fair value of its derivative liabilities that was

$4,776,760 larger in 2015 compared to the first quarter of 2014. This larger loss was a result of the larger outstanding balance of the underlying derivative instrument balance in the first quarter of 2015 compared to the first quarter of 2014 and an increase in the Company’s common share price resulting in a higher valuation at March 31, 2015 compared to March 31, 2014.

2015 2014 Variance $ $ $

Salaries and benefits 482,889 386,624 96,265 Professional fees 284,767 223,995 60,772 Office and miscellaneous 619,424 194,971 424,453 Share-based payments 172,299 54,537 117,762 Travel and related costs 195,952 10,378 185,574 Directors’ fees 110,000 22,077 87,923 Shareholder communications 88,300 30,544 57,756 Transfer agent and filing fees 35,563 17,831 17,732 Metals marketing - 39,875 (39,875)

Loss before other items (1,989,194) (980,832) (1,008,362)

Interest, accretion and loan placement expense (2,943,455) (2,575,876) (367,579) Change in fair value of derivative liabilities (5,616,370) (839,610) (4,776,760) Loss on debt settlement (622,260) - (622,260) Foreign exchange loss (8,875,928) (1,257,817) (7,618,111) Interest and other income 6,887 3,675 3,212

Loss for the year (20,040,320) (5,650,460) (14,389,860)

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• During the first quarter of 2015, the Company settled $1,816,020 of interest payable on its

outstanding loans by issuing 34,833,000 common shares at the fair value of $2,438,310 and accordingly, the Company recorded a loss on debt settlement of $622,260.

• Interest, accretion and loan placement expense increased by $367,579. As a result of the higher Pre-construction and 2014 Bridge Loan balances for the first quarter in 2015 compared to the outstanding balances in 2014, interest expense increased by $1,936,932. This was offset by a reduction in the accretion and loan placement expense for the New Bridge and Pre-construction Loans of $1,569,353.

• In the first quarter of 2015, the Company reported a larger loss on foreign exchange versus a loss in the comparable period in 2014 of $7,618,111. This was primarily a result of a 9.2% decrease in the underlying exchange rate between the Canadian and US dollar and the larger outstanding borrowings and cash balances held by the Company that were denominated in US dollars.

• Salaries and benefits increased by $96,265 in the first quarter of 2015 compared to 2014 as the Company has continued to add to its senior management team and fill other key positions.

• Office and miscellaneous expenses increased in the first quarter of 2015 compared to the first quarter of 2014 by $424,453 as the Company expanded their Toronto and other offices to reflect the growing number of people required to support the progress of the Avanti Kitsault Project.

• The Company incurred additional professional fees of $60,772 in the first quarter of 2015 versus the same period of 2014 primarily related to the recruitment of additional staff in 2015.

• Travel and related costs increased by $185,574 for the three months ended March 31, 2015 compared to the same period in 2014 as a result of the increase in staff and travel between offices and the Avanti Kitsault Project site.

• Share-based payment expenses increased by $117,762 in the first quarter of 2015 as compared to the same quarter in 2014 primarily as a result of the Company’s grant of stock options in the first quarter of 2015.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s operations used $2,301,342 of cash for the three months ended March 31, 2015 compared to $598,993 for the period ended March 31, 2014. An additional $20,590,751 of cash was spent on the Avanti Kitsault Project for the three months ended March 31, 2015 compared to $3,497,292 in the first quarter of 2014. The cash requirement for the three months ended March 31, 2015 was fulfilled from cash on hand at the beginning of the year ($17,610,367) and net proceeds from existing loans of $21,443,200. At March 31, 2015, the Company had $14,965,974 in cash. The Company’s aggregate operating, investing and financing activities during the three months ended March 31, 2015 resulted in a net decrease of $2,644,393 in its cash balance of $17,610,367 at December 31, 2014 to $14,965,974 at March 31, 2015.

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Note: (1) This is a non-GAAP measure that the Company believes is useful to demonstrate the composition of the working capital. The Company’s working capital deficiency was $148,500,259 at March 31, 2015. The increase in working capital deficiency was primarily due to draws on the 2014 Bridge Loan, the increased value in the derivative liability caused by a higher share price at March 31, 2015 and the weakening of the Canadian dollar versus the US dollar. Working capital excluding related party borrowing liabilities, a non-GAAP measure that the Company believes better indicates its ability to meet current operational obligations, was $1,502,501 at March 31, 2015. At March 31, 2015, the Company had $14,956,974 in cash and US$15,000,000 in available credit facilities. The Company had non-related party trade payables and accruals of $14,486,957 at March 31, 2015; obligations for the remainder of 2015 for operating leases of $441,091; obligations in 2015 for site restoration of $781,443; outstanding loan and interest balances due to RCF of $137,162,224; and, $110,117 due to other related parties. During the first quarter of 2015, the Company drew down US$17 million from its available credit facilities. The amounts due to RCF are secured against the assets of the Company, including the Avanti Kitsault Project. The Company will need additional capital for construction of the mine; for repayment of outstanding loans, if not converted; and, working capital purposes. The Company has entered into the Mandate Letter with project Lenders to deliver a project finance facility of US$612 million. The Company has been pursuing its capital funding strategy discussed in the 2015 Outlook section above. This strategy involves the possibility of a potential sale of a minority interest in the Avanti Kitsault Project and raising additional equity in addition to finalizing the Avanti Kitsault Project financing package described above. Despite management’s best efforts, there is no certainty the project debt, any equity offering or strategic partnership will be successfully completed thereby potentially jeopardizing the final development of the Avanti Kitsault Project and the Company’s ability to meet its future obligations.

March 31 December 312015 2014

$ $

Current assets 16,770,901 20,000,962 Less:

Accounts payable and accrued liabilites excluding interest payable 14,486,957 15,848,600 Restoration provision 781,443 781,443

Working capital excluding related party borrowing liabilities(1) 1,502,501 3,370,919

Less related party borrowing liabilities:Borrowings 132,993,000 102,088,801 Derivative liabilities 13,935,616 8,319,246 Interest 3,074,144 1,842,003

Working capital deficit (148,500,259) (108,879,131)

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For additional information, refer to the going concern note (Note 2) in the consolidated financial statements for the year ended December 31, 2014 and the condensed consolidated interim financial statements for the three months ended March 31, 2015.

TRANSACTIONS WITH RELATED PARTIES RCF IV and RCF VI are managed by RCF Management. RCF IV and RCF VI are considered related parties of the Company as a result of their share ownership and a director of the Company is a member of RCF Management’s senior management. For the three months ended March 31, 2015, the Company also reimbursed expenses of $5,622 (2014 - $nil) to RCF Management. The table below summarizes the carrying value of the outstanding obligations (principal and accrued interest) to RCF at March 31, 2015 and December 31, 2014:

During the three months ended March 31, 2015, the Company received consulting services from a company controlled by the Vice President – Safety, Health and Environment in the amount of $28,650 (2014 - $157,845). Included in accounts payable and accrued liabilities as at March 31, 2015 is $nil (December 31, 2014 - $73,816) due to that consulting company. Included in accounts payable and accrued liabilities as at March 31, 2015 is $27,912 (December 31, 2014 - $16,254) due to RCF Management, directors and officers of the Company. The amount owing to officers and directors is unsecured, non-interest bearing and has been paid subsequent to year end. Key management includes the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer and the directors of the Company. The compensation paid or payable to key management for services during the three months ended March 31, 2015 and 2014 is as follows:

March 31 December 312015 2014

$ $

RCF IVNew Bridge Loan 12,982,650 11,891,026

RCF VINew Bridge Loan 12,982,650 11,891,026Pre-construction Loan 64,596,600 59,165,1002014 Bridge Loan 45,505,244 20,983,652

136,067,144 103,930,804

For the three months ended March 31 2015 2014$ $

Directors’ fees 110,000 22,077Salaries and benefits 278,168 352,517Share-based payment expense 105,073 37,359

493,241 411,953

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COMMITMENTS First Nations The Company has made certain commitments to First Nations that have been described in the 2015 Outlook – First Nations and Community Relations Activities section above. Financial Commitments There have been no material changes to the Company’s financial commitments since December 31, 2014. Further information on the Company’s liquidity and capital resources to meet these commitments are discussed in the Liquidity and Capital Resources section above.

OUTSTANDING SHARE DATA Fully diluted common shares as at May 8, 2015:

(1) Calculated assuming the US$20,000,000 principal of the New Bridge Loan and the US$50,000,000

Pre-construction Loan have values of $25,332,000 and $63,330,000 on conversion, respectively.

Type of Security Number Exercise Price Expiry DateIssued and outstanding common shares 620,976,718Conversion of New Bridge Loan(1) 361,885,714 $0.07 March 31, 2015Conversion of Pre-construction Loan(1) 1,151,454,545 $0.06 March 31, 2015Share purchase warrants 20,000,000 $0.13 June 29, 2015Share purchase warrants 20,000,000 $0.08 July 12, 2016Stock options 200,000 $0.26 November 15, 2015Stock options 6,125,000 $0.28 February 11, 2016Stock options 800,000 $0.13 December 9, 2016Stock options 5,000,000 $0.14 April 23, 2017Stock options 2,000,000 $0.14 June 4, 2017Stock options 400,000 $0.12 June 13, 2017Stock options 500,000 $0.10 December 3, 2017Stock options 9,800,000 $0.10 July 10, 2018Stock options 1,000,000 $0.10 October 9, 2018Stock options 8,550,000 $0.07 April 30, 2019Stock options 250,000 $0.11 June 18, 2019Stock options 1,750,000 $0.10 July 10, 2019Stock options 1,400,000 $0.09 September 2, 2019Stock options 4,900,000 $0.05 January 6, 2020Stock options 1,100,000 $0.05 March 13, 2020Stock options 6,800,000 $0.06 April 6, 2020Stock options 700,000 $0.05 April 10, 2020

Total 2,225,591,977

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At May 8, 2015, RCF held 348,203,667 Alloycorp common shares or 56.1% of the Company’s issued and outstanding common shares.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financial statements requires management to use judgement in applying its accounting policies and estimates and assumptions about the future. Estimates and other judgements are regularly evaluated and are based on management’s experience and other factors, including expectations about future events that are believed to be reasonable under the circumstances. There have been no changes to the critical accounting judgements or accounting estimates during the first quarter of 2015.

EVENTS SUBSEQUENT TO MARCH 31, 2015 In April 2015, the Company settled outstanding interest of US$500,000 ($629,600) through the issuance of 11,935,028 common shares at a fair value of $596,752. Accordingly, the Company shall record a gain on settlement of obligation of $32,848. In April 2015, the Company settled outstanding interest of US$1,000,000 ($1,259,200) through the issuance of 23,870,056 common shares at a fair value of $1,193,503. Accordingly, the Company shall record a gain on settlement of obligation of $65,697. On April 6, 2015, the Company announced that it had granted 6,800,000 stock options to officers of the Company at an exercise price of $0.06. On April 10, 2015, the Company issued 700,000 stock options to employees of the Company at an exercise price of $0.05. RCF exercised their right to extend the maturity dates on the New Bridge, Pre-construction and 2014 Bridge Loans to May 31, 2015.

DISCLOSURE CONTROLS AND PROCEDURES

In connection with National Instrument 52-109 (Certification of Disclosure in Issuer’s Annual and Interim Filings) (“NI 52-109”), the President/Chief Executive Officer and Chief Financial Officer of the Company have filed a Venture Issuer Basic Certificate with respect to the financial information contained in the consolidated financial statements for the three months ended March 31, 2015 and this accompanying MD&A (together, the “Interim Filings”). In contrast to the full certificate under NI 52-109, the Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures and internal control over financial reporting, as defined in NI 52-109. For further information the reader should refer to the Venture Issuer Basic Certificates filed by the Company with the Interim Filings on SEDAR at www.sedar.com.

RISKS AND UNCERTAINTIES Natural resources exploration, development, production and processing involve a number of business risks, some of which are beyond the Company’s control. These can be categorized as operational, financial

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and regulatory risks. Additional risks to the key risks discussed below are disclosed in the Company’s Annual Information Form on SEDAR at www.sedar.com. Financial Capability, Additional Financing and Liquidity Risks The Company has limited financial resources, has no source of operating cash flow and has no assurance that additional funding will be available to it for further development of the Avanti Kitsault Project. The Company has outstanding commitments of $152,871,715 as at March 31, 2015 and a working capital deficit of $148,500,259 at March 31, 2015. Additionally, the Company has incurred a loss for the three months ended March 31, 2015 of $20,040,320 and has an accumulated deficit of $87,661,477. At March 31, 2015, the Company had US$15 million available to it under existing loans. Although the Company has been successful in the past in financing its activities through the sale of equity securities and the issuance of debt, there can be no assurance that it will be able to obtain sufficient financing in the future to execute its business plan. Operations The Company’s operations are subject to operational risks and hazards inherent in the mineral exploitation and extraction industry, including, but not limited to, variations in grade, deposit size, earthquakes and other Acts of God, density and other geological problems, hydrological conditions, availability of power, metallurgical and other processing problems, mechanical equipment performance problems, drill rig shortages, the unavailability of materials and equipment including fuel, labour force disruptions, unanticipated transportation costs, unanticipated regulatory changes, unanticipated or significant changes in the costs of supplies including, but not limited to, petroleum, labour, and adverse weather conditions. Should any of these risks and hazards affect any of the Company’s development activities, it may cause delays or a complete stoppage in the Company’s development activities, which would have a material and adverse effect on the business of the Company. Government Regulations and Permitting The Company’s development activities are subject to laws and regulations governing health and worker safety, employment standards, waste disposal, protection of the environment, mine development and protection of endangered and protected species, treatment of indigenous peoples and other matters. It is possible that future changes in applicable laws, regulations, agreements or changes in their enforcement or regulatory interpretation could result in changes in legal requirements or in the terms and conditions of existing permits and agreements applicable to the Company or its properties, which could have a material and adverse effect on the Company’s current development activities. Where required, obtaining necessary permits can be a complex, time consuming process and the Company cannot provide assurance whether any necessary permits will be obtainable on acceptable terms, in a timely manner, or at all. The costs and delays associated with obtaining necessary permits and complying with these permits and applicable laws and regulations could stop or materially delay or restrict the Company from proceeding with the development of an exploration project or the operation or further development of a mine. Any failure to comply with applicable laws and regulations or permits, even if inadvertent, could result in interruption or closure of exploration, development or mining operations or material fines, penalties or other liabilities.

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CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS This MD&A contains certain statements concerning the business of Alloycorp that constitute "forward-looking information" within the meaning of applicable securities laws. Such statements can be identified by the use of words such as "may", "would", "could", "will", "intend", "expect", "believe", "plan", "anticipate", "estimate", "scheduled", "predict" and other similar terminology, or state that certain actions, events or results "may", "could", "would", "might", or "will be taken or occur to be achieved. This MD&A and in particular the 2015 Outlook section, contains forward-looking statements including, without limitation, statements about the production plan for the Kitsault Property including estimates for capital costs, and pre-construction activities, the Company’s ability to obtain project debt financing, financing for the equity required and a strategic partner for the development of the Kitsault Property, the negotiation of cooperation agreements with First Nations groups, and estimated dates to conclude agreements for the financing and construction of a mine. These forward-looking statements are based on current expectations and various estimates, factors and assumptions, including molybdenum and other metal prices and assumptions with respect to currency fluctuations and environmental risks, and involve known and unknown risks, uncertainties and other factors. It is important to note that: Unless otherwise indicated, forward-looking statements in this MD&A describe the Company’s expectations as of May 8, 2015. All statements, other than statements of historical fact, included herein, including, without limitation, the completion of anticipated financing arrangements and activities and the anticipated development of the Avanti Kitsault Project, the expected movement of molybdenum and other commodity prices (and the Company's position in relation thereto) and expected fluctuations in exchange rates, are all forward-looking statements. These forward-looking statements are based on the opinions of management at the date the statements are made and are based on assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events to differ materially from those projected in forward-looking statements. Important factors that could cause actual results to differ materially from the Company's expectations include fluctuations in commodity prices and currency exchange rates; the satisfaction of various conditions to financing and funding; uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs, recovery rates, production estimates and estimated economic return; the need for cooperation of government agencies and native groups in the exploration and development of properties and the issuance of required permits; the need to obtain additional financing to develop properties and uncertainty as to the availability, terms and timing of future financing; the possibility of delay in exploration or development programs or in construction projects and uncertainty of meeting anticipated program milestones; and other risks and uncertainties disclosed in the Company's Annual Information Form for the year ended December 31, 2013, which is available at www.sedar.com. The Company is under no obligation to update forward-looking statements if circumstances or management's opinions should change, except as required by applicable securities laws. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indicators of whether or not such results will be achieved. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.

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OTHER INFORMATION Additional information related to the Company, including its most recently filed Annual Information Form, is available for viewing on SEDAR at www.sedar.com and at the Company’s website at www.alloycorp.com.

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