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Exhibit 99.1



SILVER WHEATON CORP.





ANNUAL INFORMATION FORMFOR THE YEAR ENDED
DECEMBER 31, 2011



March 22,2012





Suite 3150, 666 Burrard Street Vancouver, B.C. V6C 2X8



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SILVER WHEATON CORP.ANNUAL INFORMATION FORMFOR THE YEAR ENDED DECEMBER 31, 2011

TABLE OF CONTENTS

|DESCRIPTION                                                      | PAGE NO.
|---------------------------------------------------------------- | --------
|                                                                 |         
|INTRODUCTORY
      NOTES                                         | 1       
|CORPORATE
      STRUCTURE                                        | 3       
|GENERAL
      DEVELOPMENT OF THE BUSINESS                        | 3       
|DESCRIPTION
      OF THE BUSINESS                                | 6       
|Principal
      Product                                          | 7       
|Competitive
      Conditions                                     | 9       
|Operations                                                       | 9       
|Risk
      Factors                                               | 10      
|TECHNICAL
      INFORMATION                                      | 16      
|SAN
      DIMAS MINES, MEXICO                                    | 23      
|YAULIYACU
      MINE, PERÚ                                       | 32      
|PASCUA-LAMA
      PROJECT, BORDER OF CHILE AND ARGENTINA         | 49      
|DIVIDENDS                                                        | 57      
|DESCRIPTION
      OF CAPITAL STRUCTURE                           | 58      
|TRADING
      PRICE AND VOLUME                                   | 58      
|DIRECTORS
      AND OFFICERS                                     | 59      
|INTEREST
      OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS | 63      
|TRANSFER
      AGENT AND REGISTRAR                               | 64      
|MATERIAL
      CONTRACTS                                         | 64      
|INTERESTS
      OF EXPERTS                                       | 65      
|AUDIT
      COMMITTEE                                            | 66      
|ADDITIONAL
      INFORMATION                                     | 67      
|                                                                 |         
|SCHEDULE
      A  AUDIT COMMITTEE CHARTER                     |         

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INTRODUCTORY NOTES

Cautionary Note Regarding Forward-Looking Statements

This
annual information form contains forward-looking statements within the meaning
of the United States Private Securities Litigation Reform Act of 1995 and
forward-looking information within the meaning of applicable Canadian
securities legislation. Forward-looking statements, which are all statements
other than statements of historical fact, include, but are not limited to,
statements with respect to the future price of silver and gold, the estimation
of mineral reserves and mineral resources, the realization of mineral reserve
estimates, the timing and amount of estimated future production, costs of
production, reserve determination, reserve conversion rates and any statements
as to future dividends. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology such as plans, expects
or does not expect, is expected, budget, scheduled, estimates,
forecasts, intends, anticipates or does not anticipate, or believes,
or variations of such words and phrases or statements that certain actions,
events or results may, could, would, might or will be taken, occur
or be achieved. Forward-looking statements are subject to known and unknown
risks, uncertainties and other factors that may cause the actual results, level
of activity, performance or achievements of Silver Wheaton to be materially
different from those expressed or implied by such forward-looking statements,
including but not limited to: fluctuations in the price of silver and gold; the
absence of control over mining operations from which Silver Wheaton purchases
silver and gold and risks related to these mining operations including risks
related to fluctuations in the price of the primary commodities mined at such
operations, actual results of mining and exploration activities, economic and
political risks of the jurisdictions in which the mining operations are located,
changes in project parameters as plans continue to be refined; and differences
in the interpretation or application of tax laws and regulations; as well as
those factors discussed in the section entitled Risk Factors in this annual
information form. Forward-looking statements are based on assumptions management
believes to be reasonable, including but not limited to: the continued operation
of the mining operations from which Silver Wheaton purchases silver and gold, no
material adverse change in the market price of commodities, that the mining
operations will operate and the mining projects will be completed in accordance
with their public statements and achieve their stated production outcomes, and
such other assumptions and factors as set out herein. Although Silver Wheaton
has attempted to identify important factors that could cause actual results to
differ materially from those contained in forward-looking statements, there may
be other factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that forward-looking statements will prove
to be accurate. Accordingly, readers should not place undue reliance on
forward-looking statements. The forward-looking statements and forward-looking
information contained or incorporated by reference in this annual information
form are included for the purpose of providing investors with information to
assist them in understanding the Companys expected financial and operational
performance and may not be appropriate for other purposes. Silver Wheaton does
not undertake to update any forward-looking statements that are included or
incorporated by reference herein, except in accordance with applicable
securities laws.

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Currency Presentation and Exchange Rate Information

This
annual information form contains references to United States dollars and
Canadian dollars. All dollar amounts referenced, unless otherwise indicated, are
expressed in United States dollars. Canadian dollars are referred to as
Canadian dollars or C$. The high, low and closing noon spot rates for
Canadian dollars in terms of the United States dollar for each of the three
years in the period ended December 31, 2011, as quoted by the Bank of Canada,
were as follows:

| |         |  | Year ended December 31 | 
| | ------- |  | ---------------------- | 
| |         |  | 2011                   | 
| |         |  |                        | 
| | High    |  | C$1.0604               | 
| | Low     |  | 0.9449                 | 
| | Closing |  | 1.0170                 | 

On
March 22, 2012, the noon spot rate for Canadian dollars in terms of the United
States dollar, as quoted by the Bank of Canada, was US$1.00 = C$1.0003.

Silver Prices

The
high, low, average and closing fixing silver prices in United States dollars per
troy ounce for each of the three years in the period ended December 31, 2011, as
quoted by the London Bullion Market Association, were as follows:

| |         |  | Year ended December 31 | 
| | ------- |  | ---------------------- | 
| |         |  | 2011                   | 
| |         |  |                        | 
| | High    |  | $48.70                 | 
| | Low     |  | 26.16                  | 
| | Average |  | 35.12                  | 
| | Closing |  | 28.18                  | 

On
March 22, 2012, the closing fixing silver price in United States dollars per
troy ounce, as quoted by the London Bullion Market Association, was $31.79.

Gold Prices

The
high, low, average and closing afternoon fixing gold prices in United States
dollars per troy ounce for each of the three years in the period ended December
31, 2011, as quoted by the London Bullion Market Association, were as follows:

| |         |  | Year ended December 31 | 
| | ------- |  | ---------------------- | 
| |         |  | 2011                   | 
| |         |  |                        | 
| | High    |  | $1,895.00              | 
| | Low     |  | 1,319.00               | 
| | Average |  | 1,571.52               | 
| | Closing |  | 1,531.00               | 

On
March 22, 2012, the closing afternoon fixing gold price in United States dollars
per troy ounce, as quoted on the London Bullion Market Association, was
$1,635.50.

- 2 -

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CORPORATE STRUCTURE

Pursuant
to Articles of Continuance dated December 17, 2004, Silver Wheaton Corp.
(Silver Wheaton or the Company) was continued under the
Business Corporations Act(Ontario).

The
Companys head office is located at Suite 3150, Park Place, 666 Burrard Street,
Vancouver, British Columbia, V6C 2X8 and its registered office is located at
Suite 2100, 40 King Street West, Toronto, Ontario, M5H 3C2.

The
Companys active subsidiaries are Silver Wheaton (Caymans) Ltd. (Silver Wheaton
Caymans) which is wholly-owned by the Company and is governed by the laws of
the Cayman Islands, Silver Wheaton Luxembourg S.a.r.l. which is wholly-owned by
Silver Wheaton Caymans and is governed by the laws of Luxembourg, and
Silverstone Resources (Barbados) Corp. which is wholly-owned by Silver Wheaton
Caymans and is governed by the laws of Barbados. As used in this annual
information form, except as otherwise required by the context, reference to
Silver Wheaton or the Company means Silver Wheaton Corp., Silver Wheaton
Caymans, Silver Wheaton Luxembourg S.a.r.l. and Silverstone Resources (Barbados)
Corp.

SILVER WHEATON AND ITS PRINCIPAL SUBSIDIARIES



GENERAL DEVELOPMENT OF THE BUSINESS

Three Year History

San Dimas Transaction

On
October 15, 2004, the Company entered into a silver purchase agreement (the San Dimas Silver Purchase Agreement) with Goldcorp Inc. (Goldcorp) to acquire an
amount equal to 100% of the silver produced by Goldcorps Luismin mining
operations in Mexico (owned at the date of the transaction) for a period of 25
years. The Luismin operations consisted primarily of the San Dimas and Los Filos
mines

On
August 6, 2010, Goldcorp completed the sale of the San Dimas mine to Primero
Mining Corp. (Primero). In conjunction with the sale, Silver Wheaton amended
its silver purchase agreement relating to the mine. The term of the silver
purchase agreement, as it relates to San Dimas, has been extended to the life of
mine. During the first four years following the closing of the transaction,
Primero will deliver to Silver Wheaton a per annum amount equal to the first 3.5
million ounces of payable silver produced at San Dimas and 50% of any excess,
plus Silver Wheaton will receive an additional 1.5 million ounces of silver per
annum to be delivered by Goldcorp. Beginning in the fifth year after closing,
Primero will deliver a per annum amount to Silver Wheaton equal to the first 6
million ounces of payable silver produced at San Dimas and 50% of any excess. In addition, a per ounce cash
payment of the lesser of $3.90 per ounce of silver (subject to an annual
inflationary adjustment) or the prevailing market price is due, for silver
delivered under the agreement. Goldcorp will continue to guarantee the delivery
by Primero of all silver produced and owing to the Company until 2029. Primero
has provided Silver Wheaton with a right of first refusal on any metal stream or
similar transaction it enters into.

See Description of the Business 
Further Disclosure Regarding Mineral Projects on a Material Property  San Dimas Mine, Mexico for details regarding the San
Dimas Mine.

- 3 -

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Los Filos Transaction

Silver
Wheaton has an agreement with Goldcorp to acquire 100% of the silver production
from its Los Filos mine in Mexico for a period of 25 years, commencing October
15, 2004. In addition, pursuant to Goldcorps sale of the San Dimas mine,
Goldcorp is obligated to deliver to Silver Wheaton 1.5 million ounces of silver
per year until August 6, 2014 as noted under San Dimas Transaction above.

Rosemont Transaction

On
February 11, 2010, the Company entered into an agreement with Augusta Resource
Corporation (Augusta) to acquire an amount equal to 100% of the life of mine
silver and gold production from its Rosemont copper project (the Rosemont
Project) located in Pima County, Arizona. Silver Wheaton will make total
upfront cash payments of $230 million, payable on an instalment basis to
partially fund construction of the mine, once certain milestones are achieved,
including the receipt of key permits and securing the necessary financing to
complete construction of Rosemont. In addition, a per ounce cash payment of the
lesser of $3.90 per ounce of silver and $450 per ounce of gold (both subject to
an inflationary adjustment) or the prevailing market price is due, for silver
and gold delivered under the agreement. Augusta anticipates that key operating
permits will be received in 2012 and has provided a completion guarantee with
certain minimum production criteria required to be met by specific dates.

Barrick Transaction

On
September 8, 2009, the Company entered into a silver purchase agreement (the
Pascua-Lama Silver Purchase Agreement) with Barrick Gold Corporation
(Barrick) pursuant to which the Company agreed to purchase an amount of silver
equivalent to 25% of the life of mine silver production from Barricks
Pascua-Lama project (the Pascua-Lama Project) located on the border of Chile
and Argentina, as well as an amount of silver equivalent to 100% of the silver
production from its Lagunas Norte, Pierina and Veladero (Silver Wheatons
attributable silver production is subject to a maximum of 8% of the silver
contained in the ore mined at Veladero during the period) mines until the end of
2013 (the Barrick Transaction). The Company will make total upfront cash
payment to Barrick of $625 million (the Upfront Payment), of which $487.5
million has been paid to date. The remaining $137.5 million is due on the third
anniversary of the Barrick Transaction. In addition, per ounce cash payments of
the lesser of $3.90 (subject to an annual inflationary adjustment starting three
years after achieving project completion at Pascua-Lama) and the prevailing
market price is due for silver delivered under the Pascua-Lama Silver Purchase
Agreement.

Barrick
has provided the Company with a completion guarantee, requiring Barrick to
complete the Pascua-Lama Project to at least 75% of design capacity by December
31, 2015. During 2014 and 2015, the Company will be entitled to the silver
production from the Lagunas Norte, Pierina and Veladero mines to the extent of
any production shortfall at the Pascua-Lama Project, until Barrick satisfies the
completion test. If the requirements of the completion test have not been
satisfied by December 31, 2015, the agreement may be terminated by the Company.
In such an event, the Company would be entitled to the return of the Upfront
Payment less a credit for silver delivered up to the date of such event. Barrick
has also granted the Company a five year right of first refusal on any further
metal stream sales in connection with the Pascua-Lama Project, where more than
50% of the value is derived from silver.

If,
after Barrick satisfies the requirements of the completion test, certain
political events occur in Argentina or Chile, including an expropriation of any
part of the Pascua-Lama Project, the selective and discriminatory imposition of
any law or war or insurrection, that results in Barrick losing all or
substantially all of the rights, privileges or benefits pertaining to any part
of the Pascua-Lama Project, then Silver Wheatons entitlement to silver
production from that part of the Pascua-Lama Project will be suspended until the
political event ceases.

If,
after Barrick satisfies the requirements of the completion test, certain
political events occur in Argentina or Chile that would reduce Barricks
economic value of its investment in the Pascua-Lama Project by more than 50%,
then Silver Wheatons entitlement to silver production from the
Pascua Lama Project and the uncredited balance of the Upfront Payment will be
reduced to reflect the reduction of Barricks economic value of its investment
in the Pascua-Lama Project, until the political event ceases. If the political
event continues for the term of the transaction, then Silver Wheatons
entitlement to the repayment of the uncredited balance of the Upfront Payment
will be reduced to reflect the suspension of silver sales from the affected
portion of the Pascua-Lama Project.

- 4 -

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If,
after Barrick satisfies the requirements of the completion test, any of
Barricks subsidiaries that own any part of the Pascua-Lama Project becomes
insolvent or bankrupt, or Barricks lenders exercise or enforce any security
granted to them that results in Barrick losing all or substantially all of the
rights, privileges or benefits pertaining to the Pascua-Lama Project, then the
transaction will terminate and Silver Wheaton will be entitled to an immediate
repayment of the uncredited balance of the Upfront Payment.

If
Silver Wheaton fails to pay any portion of the Upfront Payment to Barrick, then
Barrick may terminate Silver Wheatons obligation to make any further payments
of the Upfront Payment and reduce the amount of the Upfront Payment already paid
to Barrick by the lesser of 20% of the amount already paid and $50 million.
Following any such reduction, Barrick will continue to sell silver to Silver
Wheaton in accordance with the terms of the transaction until the amount of
silver sold to Silver Wheaton equals the reduced amount of the Upfront Payment,
after which the transaction will terminate.

In
November 2010, Argentina passed a federal glacier protection law that bans new
mining exploration and exploitation activities on glaciers and in the
peri-glacial environment, and subjects ongoing mining activities to an
environmental audit. If such an audit identifies significant impacts on glaciers
and the peri-glacial environment, the relevant authority is empowered to take
action, which according to the legislation could include the suspension or
relocation of activity. Barrick states in its 2011 year end Management
Discussion & Analysis that it complies with provincial glacier protection
legislation previously adopted by the Province of San Juan. In November 2010, as
a result of legal actions brought against the National State by local unions,
San Juan based mining and construction chambers and certain Barrick subsidiaries
(and subsequently the Province of San Juan), the Federal Court in the Province
of San Juan granted injunctions based on the unconstitutionality of the federal
legislation, suspending the application of the federal legislation in the
Province of San Juan and in particular as against Veladero and Pascua-Lama. The
actions have been moved to the National Supreme Court of Justice of Argentina to
determine the constitutionality of the legislation. As stated by Barrick in its
2011 year end Management Discussion & Analysis, the National Supreme Court
of Justice of Argentina issued a decision that this case falls within its
jurisdiction. The National State filed a remedy seeking revocation of the
November 2010 injunction granted by the Federal Court in the Province of San
Juan, which Barrick answered in June 2011.

See
Description of the Business  Further Disclosure Regarding Mineral Projects on
a Material Property Pascua-Lama Project, Border of Chile and Argentina for
details regarding the Pascua-Lama Project.

Acquisition of Silverstone Resources Corp.

On
May 21, 2009, the Company completed the acquisition of all of the outstanding
common shares of Silverstone Resources Corp. (Silverstone) by way of a
statutory plan of arrangement. Each common share of Silverstone was exchanged
for 0.185 of a common share of Silver Wheaton (each common share of Silver
Wheaton generally referred to herein as a Common Share), resulting in the
issuance of approximately 23.4 million Common Shares. The following interests
were acquired as a result of the acquisition of Silverstone:

Minto
Mine  A precious metals purchase agreement to acquire 100% of the silver
produced from the Minto mine (the Minto Mine) in Canada, owned by Capstone
Mining Corp. (Capstone) and up to 30,000 ounces of gold per annum for the
lesser of $3.90 per ounce of silver and $300 per ounce of gold (subject to an
annual inflationary adjustment after three years) and the then prevailing market
price per ounce of silver or gold. If gold production from the Minto Mine
exceeds 30,000 ounces per year, the Company has committed to purchase 50% of the
amount that production exceeds those thresholds for the same per ounce payment
noted above.

Cozamin
Mine  A silver purchase agreement to acquire 100% of the silver produced
from the Cozamin mine (the Cozamin Mine) in Mexico, owned by Capstone until
2017 for the lesser of $4.00 (subject to an annual inflationary adjustment after
three years) and the then prevailing market price per ounce of silver. The
payment per ounce of silver delivered from the Cozamin Mine may be subject to
price adjustments in certain circumstances, the effects of which are being
reviewed and are not determinable at this time.

*Neves-Corvo
Mine*  A silver purchase agreement to acquire 100% of the silver produced
from the Neves-Corvo mine (the Neves-Corvo Mine) in Portugal, owned by Lundin
Mining Corporation for the life of mine (nominal term of 50 years) for the
lesser of $3.90 (subject to an annual inflationary adjustment after three years)
and the then prevailing market price per ounce of silver.

- 5 -

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Aljustrel
Mine  A silver purchase agreement to acquire 100% of the silver produced
from the Aljustrel mine (the Aljustrel Mine) in Portugal, owned by IM SGPS
for the life of mine (nominal term of 50 years) for the lesser of $3.90 (subject
to an annual inflationary adjustment after three years) and the then prevailing
market price per ounce of silver.

Loma
de La Plata Project  A debenture with Pan American Silver Corp. (Pan
American) (formerly with Aquiline Resources Inc.) convertible into an agreement
to purchase 12.5% of the life of mine silver production from the Loma de La
Plata (the Loma de La Plata Project) zone of the Navidad Project in Argentina.
On February 25, 2010, the Company elected to convert the debenture with Pan
American into an agreement to acquire an amount equal to 12.5% of the life of
mine silver production from the Loma de La Plata Project. As such, Silver
Wheaton will make total upfront cash payments of $32.4 million following the
satisfaction of certain conditions, including Pan American receiving all
necessary permits to proceed with the mine construction. In addition, a per
ounce cash payment of $4.00 per ounce is due for silver delivered under the
agreement. Silver Wheaton and Pan American are in the process of finalizing the
definitive terms of the agreement.

Long-Term Investments

At
December 31, 2011, the Company held long-term investments with a market value of
approximately $151.6 million. The Company owns more than 10% of each of the
following companies, comprising $75.7 million of these long-term investments.

Bear Creek Mining Corporation

At
December 31, 2011, Silver Wheaton owned approximately 13.3 million common shares
of Bear Creek Mining Corporation (TSXV: BCM) (Bear Creek), representing
approximately 14% of the outstanding shares of Bear Creek. At December 31, 2011,
the fair value of the Companys investment in Bear Creek was approximately $46.2
million.

Revett Minerals Inc.

At
December 31, 2011, Silver Wheaton owned 5.0 million common shares of Revett
Minerals Inc. (TSX: RVM) (Revett) and common share purchase warrants
exercisable to acquire an additional 0.2 million common shares, representing
approximately 16% of the outstanding shares of Revett. At December 31, 2011, the
fair value of the Companys investment in Revett was approximately $24.5
million.

Sabina Gold & Silver Corp.

At
December 31, 2011, Silver Wheaton owned 11.7 million common shares of Sabina
Gold & Silver Corp. (Sabina), representing approximately 7% of the
outstanding shares of Sabina. At December 31, 2011, the fair value of the
Companys investment in Sabina was $44.2 million.

Other

At
December 31, 2011, Silver Wheaton owned common shares and common share purchase
warrants of several other publicly traded mineral exploration, development and
mining companies. At December 31, 2011, the fair value of such other long-term
investments was approximately $36.7 million.

DESCRIPTION OF THE BUSINESS

Silver
Wheaton is a mining company which generates its revenue primarily from the sale
of silver. The Company is listed on the New York Stock Exchange (symbol: SLW)
and the Toronto Stock Exchange (symbol: SLW). In addition, the Company has
common share purchase warrants that trade on the Toronto Stock Exchange (symbol:
SLW.WT.U).

To
date, the Company has entered into 14 long-term silver purchase agreements and
two long-term precious metals purchase agreements whereby Silver Wheaton
acquires silver and gold production from the counterparties for a per ounce cash
payment at or below the prevailing market price. The primary drivers of the
Companys financial results are the volume of silver production at the various
mines and the price of silver realized by Silver Wheaton upon sale. Attributable silver and gold as referred to in this annual information form
is the silver and gold production to which Silver Wheaton is entitled pursuant
to the various purchase agreements.

- 6 -

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The
Company is actively pursuing future growth opportunities, primarily by way of
entering into long-term silver purchase agreements. There is no assurance,
however, that any potential transaction will be successfully completed.

Principal Product

The
Companys principal product is silver that it has agreed to purchase pursuant to
silver purchase agreements. The Company also acquires gold that it has agreed to
purchase pursuant to precious metals purchase agreements. The following table
summarizes the silver and gold interests currently owned by the Company
(collectively, the Mining Operations):

|Silver
      and Gold Interests | Owner            | Location
      of Mine |   | Upfront
      Consideration 1 |     | Attributable
      Production
      to be Purchased |  | Term
      of Agreement | Date
      of Contract
|------------------------------- | ---------------- | ---------------------- | - | ----------------------------- | --- | --------------------------------------------------- |  | ----------------------- | ----------------------
|Silver                          |                  | Gold                   |  
|San Dimas                       | Primero 2        | Mexico                 | $ | 189,799                       | 3   | 100%
      2                                        |  | -                       |                       
|Zinkgruvan                      | Lundin           | Sweden                 | $ | 77,866                        |     | 100%                                                |  | -                       |                       
|Yauliyacu                       | Glencore         | Peru                   | $ | 285,000                       |     | 100%
      4                                        |  | -                       |                       
|Peñasquito                      | Goldcorp         | Mexico                 | $ | 485,000                       |     | 25%                                                 |  | -                       |                       
|Minto                           | Capstone         | Canada                 | $ | 55,296                        | 5   | 100%                                                |  | 100%
      6            |                       
|Cozamin                         | Capstone         | Mexico                 | $ | 41,959                        | 5   | 100%                                                |  | -                       |                       
|Barrick                         |                  |                        | $ | 625,000                       | 7   |                                                     |  |                         |                       
|Pascua-Lama                     | Barrick          | Chile/Argentina        |   |                               |     | 25%                                                 |  | -                       |                       
|Lagunas Norte                   | Barrick          | Peru                   |   |                               |     | 100%                                                |  | -                       |                       
|Pierina                         | Barrick          | Peru                   |   |                               |     | 100%                                                |  | -                       |                       
|Veladero                        | Barrick          | Argentina              |   |                               |     | 100%
      9                                        |  | -                       |                       
|Other                           |                  |                        | $ | 544,303                       |     |                                                     |  |                         |                       
|Los Filos                       | Goldcorp         | Mexico                 | $ | 4,463                         | 3 7 | 100%                                                |  | -                       |                       
|Stratoni                        | Eldorado Gold 10 | Greece                 | $ | 57,500                        |     | 100%                                                |  | -                       |                       
|Neves-Corvo                     | Lundin           | Portugal               | $ | 35,350                        | 5   | 100%                                                |  | -                       |                       
|Aljustrel                       | I'M SGPS         | Portugal               | $ | 2,451                         | 5   | 100%                                                |  | -                       |                       
|Mineral Park                    | Mercator         | United States          | $ | 42,000                        |     | 100%                                                |  | -                       |                       
|Campo Morado                    | Nyrstar NV       | Mexico                 | $ | 79,250                        |     | 75%                                                 |  | -                       |                       
|Keno Hill                       | Alexco           | Canada                 | $ | 50,000                        |     | 25%                                                 |  | -                       |                       
|Rosemont                        | Augusta          | United States          | $ | 230,000                       | 11  | 100%                                                |  | 100%                    |                       
|Loma de La Plata                | Pan American     | Argentina              | $ | 43,289                        | 12  | 12.5%                                               |  | -                       |                       

|(1)  | Expressed in United States dollars, rounded to the
      nearest thousand; excludes closing costs and capitalized interest, where
      applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                               
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2)  | Until August 6, 2014, Primero will deliver to Silver
      Wheaton a per annum amount equal to the first 3.5 million ounces of
      payable silver produced at San Dimas and 50% of any excess, plus Silver
      Wheaton will receive an additional 1.5 million ounces of silver per annum
      to be delivered by Goldcorp. After August 6, 2014, Primero will deliver a
      per annum amount to Silver Wheaton equal to the first 6 million ounces of
      payable silver produced at San Dimas and 50% of any excess.                                                                    
|(3)  | On August 6, 2010, Goldcorp completed the sale of the San
      Dimas mine, which was part of the Luismin mining operations (Luismin),
      to Primero. The original cost of Luismin was allocated to San Dimas and
      Los Filos based on the estimated fair values of these silver interests as
      at August 6, 2010.                                                                                                                                                                                                                                                                   
|(4)  | To a maximum of 4.75 million ounces per annum. In the
      event that silver produced at Yauliyacu in any year totals less than 4.75
      million ounces, the amount sold to Silver Wheaton in subsequent years will
      be increased to make up for the shortfall, so long as production
      allows.                                                                                                                                                                                                                                                                                       
|(5)  | Primarily comprised of the value allocated to the silver
      and gold interest upon the Companys acquisition of Silverstone Resources
      Corp., which was closed on May 21, 2009 (the Silverstone
      Acquisition).                                                                                                                                                                                                                                                                                                                                                                     
|(6)  | The Company is entitled to acquire 100% of the first
      30,000 ounces of gold produced per annum and 50% thereafter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(7)  | Silver Wheaton will make total upfront cash payments of
      $625 million payable in installments, of which $487.5 million has been
      paid to date. The remaining $137.5 million is payable on the third
      anniversary of the transaction. The financial liability relating to these
      future payments has been discounted using an annual discount rate of 6.9%,
      which represents managements best estimate of the market rate of interest
      at which the Company could borrow money under similar terms and conditions
      at the time the agreement was entered into.
|(8)  | Barrick will deliver to Silver Wheaton silver production
      from the currently producing mines until December 31, 2013. In addition,
      during 2014 and 2015, Silver Wheaton will be entitled to all or a portion
      of the silver production from these mines to the extent of any production
      shortfall relative to the production guarantee levels at Pascua-Lama,
      until Barrick satisfies the completion guarantee.                                                                                                                                                       
|(9)  | Silver Wheaton's attributable silver production is
      subject to a maximum of 8% of the silver contained in the ore mined at
      Veladero during the period.                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(10) | 95% owned by Eldorado Gold
Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

- 7 -

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|(11) | Payable on an installment basis to partially fund
      construction of the Rosemont mine once certain milestones are achieved,
      including the receipt of key permits and securing the necessary financing
      to complete construction of the mine.                                                                     
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(12) | Comprised of $10.9 million allocated to the silver
      interest upon the Silverstone Acquisition in addition to $32.4 million,
      the payment of which is contingent upon the satisfaction of certain
      conditions, including Pan American receiving all necessary permits to
      proceed with the mine construction.
|(13) | Definitive terms of the agreement are in the process of
      being finalized.                                                                                                                                                                                                                                                  

Further
details regarding the purchase agreements entered into by the Company in respect
of these silver and gold interests can be found under the heading General
Development of the Business  Three Year History above, except for the
following interests which were entered into prior to the past three years:

Zinkgruvan Mine

On
December 8, 2004, Silver Wheaton Caymans entered into an agreement with Lundin
Mining Corporation (Lundin) and Zinkgruvan Mining AB to acquire 100% of the
payable silver produced by Lundins Zinkgruvan mining operations (the
Zinkgruvan Mine) in Sweden for the life of mine for the lesser of $3.90 per
ounce of silver (subject to an annual inflationary adjustment) and the then
prevailing market price per ounce of silver.

Yauliyacu Mine

On
March 23, 2006, Silver Wheaton Caymans entered into a silver purchase agreement
(the Yauliyacu Silver Purchase Agreement) with Glencore International AG
(Glencore) and Anani Investments Ltd. to acquire an amount equal to 100% of
the payable silver produced from Glencores Yauliyacu mining operations (the
Yauliyacu Mine) in Perú, up to a maximum of 4.75 million ounces per year, for
a period of 20 years commencing in March of 2006, for $3.90 per ounce of silver
(subject to an annual inflationary adjustment). In the event that silver
produced at Yauliyacu in any year totals less than 4.75 million ounces, the
amount sold to Silver Wheaton Caymans in subsequent years will be increased to
make up the shortfall, to the extent production allows. During the term of the
contract, Silver Wheaton Caymans has a right of first refusal on any future
sales of silver streams from the Yauliyacu Mine and a right of first offer on
future sales of silver streams from any other mine owned by Glencore at the time
of the initial transaction.

See
Description of the Business  Further Disclosure Regarding Mineral Projects on
a Material Property  Yauliyacu Mine, Perú for details regarding the Yauliyacu
Mine.

Peñasquito Mine

On
July 24, 2007, Silver Wheaton Caymans entered into a silver purchase agreement
(the Peñasquito Silver Purchase Agreement) with Goldcorp Inc. (Goldcorp) and
Minera Peñasquito, S.A. de C.V. (Minera Peñasquito), a wholly-owned subsidiary
of Goldcorp, pursuant to which Silver Wheaton Caymans agreed to purchase 25% of
the payable silver produced by Minera Peñasquito from the Peñasquito Mine
located in Mexico (the Peñasquito Mine) over its entire mine life, for an
upfront cash payment of $485 million, plus a payment equal to the lesser of
$3.90 per ounce of delivered silver (subject to an annual inflationary
adjustment three years after commercial production commences) and the then
prevailing market price per ounce of silver.

See
Description of the Business  Further Disclosure Regarding Mineral Projects on
a Material Property - Peñasquito Mine, Mexico for details regarding the
Peñasquito Mine.

Stratoni Mine

On
April 23, 2007, Silver Wheaton Caymans entered into a silver purchase agreement
with European Goldfields Limited (European Goldfields) and Hellas Gold S.A.
(Hellas Gold), a 95%-owned subsidiary of European Goldfields, pursuant to
which Silver Wheaton Caymans agreed to purchase 100% of the payable silver
produced by Hellas Gold from the Stratoni mine (the Stratoni Mine) located in
Greece over its entire mine life, for an upfront cash payment of $57.5 million,
plus a payment equal to the lesser of $3.90 per ounce of delivered silver
(subject to an annual inflationary adjustment after April 23, 2010) and the then
prevailing market price per ounce of silver. During the term of the contract,
Silver Wheaton Caymans has a right of first refusal on any future sales of
silver streams from any other mine owned by Hellas Gold or European Goldfields.

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On
February 24, 2012, European Goldfields announced that it had completed the plan
of arrangement with Eldorado Gold Corporation ("Eldorado") whereby Eldorado
acquired all of the issued and outstanding shares of European Goldfields. This
transaction will have no significant effect on Silver Wheaton's Stratoni silver
purchase agreement.

Keno Hill Mine

On
October 2, 2008, the Company entered into a silver purchase agreement with Alexco Resource Corp. (Alexco) and Elsa Reclamation & Development Company
Ltd. and Alexco Keno Hill Mining Corp. (formerly called Alexco Resource Canada
Corp.), each of which are wholly-owned subsidiaries of Alexco, pursuant to which
the Company agreed to pay, subject to the completion of certain conditions, an
upfront cash payment of $50 million in order to acquire 25% of all payable
silver produced from the Keno Hill district, including the currently producing
Bellekeno mine in the Yukon Territory, Canada (the Keno Hill Mine), over its
entire mine-life, for the lesser of $3.90 (subject to an annual inflationary
adjustment beginning in year four after the achievement of specific operating
targets) and the then prevailing market price per ounce of delivered silver.
Silver Wheaton is not required to contribute to further capital or exploration
expenditures and Alexco has provided a completion guarantee with certain minimum
production criteria by specific dates.

Campo Morado Mine

On
May 13, 2008, Silver Wheaton Caymans entered into a silver purchase agreement
with Nyrstar Mining Ltd. (formerly called Farallon Mining Ltd., and prior to
that Farallon Resources Ltd.) (Nyrstar) and Nyrstar Resources (Barbados) Ltd.
(formerly called Farallon Resources (Barbados) Ltd.), which are subsidiaries of
Nyrstar NV as a result of Nyrstar NVs acquisition of Farallon Mining Ltd. (as
it was then named) in January 2011. Under the terms of the silver purchase
agreement, Silver Wheaton Caymans agreed to pay, subject to the completion of
certain conditions, an upfront cash payment of $80 million in order to acquire
75% of payable silver produced by the Campo Morado property in Mexico (the
Campo Morado Mine), over its entire mine-life, for the lesser of $3.90
(subject to an annual adjustment beginning in year four after production
commences) and the then prevailing market price per ounce of delivered silver.
The upfront payment was made on a drawdown basis to fund ongoing capital
expenditures at the Campo Morado Mine.

Mineral Park Mine

On
March 17, 2008, Silver Wheaton Caymans entered into a silver purchase agreement
with Mercator Minerals Ltd. (Mercator) and Mercator Minerals (Barbados) Ltd.,
a wholly-owned subsidiary of Mercator, pursuant to which Silver Wheaton Caymans
agreed to pay, subject to the completion of certain conditions, an upfront cash
payment of $42 million in order to acquire 100% of the payable silver produced
by the Mineral Park mine in the United States (the Mineral Park Mine), over
its entire mine-life, for the lesser of $3.90 (subject to an annual adjustment
beginning three years after a minimum production level has been met) and the
then prevailing market price per ounce of delivered silver.

Sales of Principal Product

There
is a worldwide silver market into which the Company can sell the silver
purchased under the silver purchase agreements and, as a result, the Company
will not be dependent on a particular purchaser with regard to the sale of the
silver that it acquires pursuant to its silver purchase agreements. The silver
in concentrate from the Zinkgruvan Mine, the Stratoni Mine, the Neves-Corvo Mine
and the Minto Mine is purchased from the Company by various smelters and
off-takers at the worldwide market price for silver. The foregoing also applies
to any gold purchased by the Company under precious metals purchase agreements.

Competitive Conditions

The
Company is the largest silver streaming company in the world. The ability of the
Company to acquire additional silver in the future will depend on its ability to
select suitable properties and enter into similar silver purchase agreements.
See Description of the Business  Risk Factors  Competition.

Operations

Raw Materials

The
Company purchases silver (and, to a lesser extent, gold) pursuant to the
purchase agreements described under Description of the Business  Principal
Product.

- 9 -

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Employees

Currently,
the Company and its subsidiaries have an aggregate of 25 employees.

Foreign Interests

The
Company currently purchases or expects to be purchasing silver (and, to a lesser
extent, gold in some instances) from mines in Mexico, the United States, Greece,
Sweden, Perú, Chile, Argentina and Portugal. Any changes in legislation,
regulations or shifts in political attitudes in such foreign countries are
beyond the control of the Company and may adversely affect its business. The
Company may be affected in varying degrees by such factors as government
legislation and regulations (or changes thereto) with respect to the
restrictions on production, export controls, income and other taxes,
expropriation of property, repatriation of profits, environmental legislation,
land use, water use, land claims of local people and mine safety. The effect of
these factors on the Company cannot be accurately predicted. See Description of
the Business  Risk Factors  Risks relating to the Mining Operations 
International Interests.

Risk Factors

The
operations of the Company are speculative due to the nature of its business
which is the purchase of silver (and, to a lesser extent, gold) production from
producing mining companies. These risk factors could materially affect the
Companys future operating results and could cause actual events to differ
materially from those described in forward-looking statements relating to the
Company. The risks described herein are not the only risks facing the Company.
Additional risks and uncertainties not currently known to the Company, or that
the Company currently deems immaterial, may also materially and adversely affect
its business.

Risks Relating to the Company

Commodity Prices

The
price of the Common Shares and the Companys financial results may be
significantly adversely affected by a decline in the price of silver or gold.
The price of silver and gold fluctuates widely, especially in recent years, and
is affected by numerous factors beyond the Companys control, including but not
limited to, the sale or purchase of silver and gold by various central banks and
financial institutions, interest rates, exchange rates, inflation or deflation,
fluctuation in the value of the United States dollar and foreign currencies,
global and regional supply and demand, and the political and economic conditions
of major silver and gold producing countries throughout the world.

In
the event that the prevailing market price of silver or gold is at or below the
price at which the Company can purchase such pursuant to the terms of the
agreements associated with its silver and gold interests, the Company will not
generate positive cash flow or earnings.

Silver
and gold are by-product metals at all of the Mining Operations, other than at
the Keno Hill Mine and the Loma de La Plata Project, and therefore, the economic
cut-off applied to the reporting of silver and gold reserves and resources will
be influenced by changes in the commodity prices of other metals at the mines.

Risks Relating to the Mining Operations

To
the extent that they relate to the production of silver or gold from, or the
continued operation of, the Mining Operations, the Company will be subject to
the risk factors applicable to the operators of such mines or projects, some of
which are set forth below under Risks Relating to the Mining Operations.

No Control Over Mining Operations

The Company has agreed to purchase a
certain percentage of the silver (and in some cases gold) produced by the Mining
Operations. The Company is not directly involved in the ownership or operation
of mines and has no contractual rights relating to the operation of the Mining
Operations. As a result, the cash flows of the Company are dependent upon the
activities of third parties which creates the risk that at any time those third
parties may: (a) have business interests or targets that are inconsistent with
those of the Company, (b) take action contrary to the Companys policies or
objectives, (c) be unable or unwilling to fulfill their obligations under their
agreements with the Company, or (d) experience financial, operational or other difficulties, including insolvency, which
could limit a third partys ability to perform its obligations under the silver
purchase agreements or the precious metals purchase agreements. Except in
limited circumstances, the Company will not be entitled to any material
compensation if such operations do not meet their forecasted silver or gold
production targets in any specified period or if the operations shut down or
discontinue their operations on a temporary or permanent basis. There can be no
assurance that the silver or gold production from such properties will
ultimately meet forecasts or targets. At any time, any of the operators of the
Mining Operations may decide to suspend or discontinue operations.

- 10 -

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Taxes

The
Companys operating profit is derived primarily from its subsidiaries, Silver
Wheaton Caymans and Silverstone Resources (Barbados) Corp., which are
incorporated and operated in the Cayman Islands and Barbados, respectively, such
that the Companys profits are subject to minimal income tax.

The
introduction of new tax laws or regulations, or changes to, or differing
interpretation of, or application of, existing tax laws or regulations in
Canada, the Cayman Islands, Luxembourg, Barbados, the Netherlands or any of the
countries in which the Mining Operations are located or to which shipments of
silver or gold are made, could result in an increase in the Companys taxes, or
other governmental charges, duties or impositions. Due to the size, complexity
and nature of the Companys operations, various legal and tax matters are
outstanding from time to time, including an audit by the Canada Revenue Agency
of the Companys international transactions covering the 2005 to 2010 taxation
years. No assurance can be given that new tax laws or regulations will not be
enacted or that existing tax laws or regulations will not be changed,
interpreted or applied in a manner which could have a material adverse effect on
the Company.

Credit and Liquidity Risk

The
Company is exposed to counterparty risks and liquidity risks including, but not
limited to: (i) through the companies with which the Company has silver and
precious metals purchase agreements; (ii) through financial institutions that
hold the Companys cash and cash equivalents; (iii) through companies that have
payables to the Company, including concentrate customers; (iv) through the
Companys insurance providers; and (v) through the Companys lenders. The
Company is also exposed to liquidity risks in meeting its operating expenditure
requirements in instances where cash positions are unable to be maintained or
appropriate financing is unavailable. These factors may impact the ability of
the Company to obtain loans and other credit facilities in the future and, if
obtained, on terms favourable to the Company. If these risks materialize, the
Companys operations could be adversely impacted and the trading price of the
Common Shares could be adversely affected.

Competition

The
Company competes with other companies for silver and precious metals purchase
agreements and similar transactions. Some of these companies may possess greater
financial and technical resources than the Company. Such competition may result
in the Company being unable to enter into desirable silver and precious metals
purchase agreements or similar transactions, to recruit or retain qualified
employees or to acquire the capital necessary to fund its silver and precious
metals purchase agreements. Existing or future competition in the mining
industry could materially adversely affect the Companys prospects for entering
into additional silver and precious metals purchase agreements in the future.

Acquisition Strategy

As
part of the Companys business strategy, it has sought and will continue to seek
new exploration, mining and development opportunities in the resource industry.
In pursuit of such opportunities, the Company may fail to select appropriate
acquisition candidates or negotiate acceptable arrangements, including
arrangements to finance acquisitions or integrate the acquired businesses and
their personnel into the Company. The Company cannot assure that it can complete
any acquisition or business arrangement that it pursues, or is pursuing, on favourable terms, or that any acquisitions or business arrangements completed
will ultimately benefit the Company.

Market Price of the Common Shares and the Common Share
Purchase Warrants

The
Common Shares are listed and posted for trading on the TSX and on the NYSE and
the Companys common share purchase warrants are listed and posted for trading
on the TSX. An investment in the Companys securities is highly speculative.
Securities of companies involved in the resource industry have experienced
substantial volatility in the past, often based on factors unrelated to the financial performance
or prospects of the companies involved. The price of the Common Shares and the
Companys common share purchase warrants are also likely to be significantly
affected by short-term changes in silver and gold prices, the Companys
financial condition or results of operations as reflected in its quarterly
earnings reports, and the other risk factors identified herein.

- 11 -

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Equity Price Risk

The
Company is exposed to equity price risk as a result of holding long-term
investments in other exploration and mining companies. Just as investing in the
Company is inherent with risks such as those set out in this annual information
form, by investing in these other companies, the Company is exposed to the risks
associated with owning equity securities and those risks inherent in the investee companies. The Company does not actively trade these investments.

Dividend Policy

The
declaration, timing, amount and payment of dividends is at the discretion of the
Companys Board of Directors. There can be no assurance that the Company will
continue to declare a dividend on a quarterly, annual or other basis.

Dependence Upon Key Management Personnel

The
Company is dependent on the services of a small number of key executives who are
highly skilled and experienced. The loss of these persons or the Companys
inability to attract and retain additional highly skilled employees may
adversely affect its business and future operations.

Litigation

The
Company is from time to time involved in various claims, legal proceedings and
disputes arising in the ordinary course of business. If the Company is unable to
resolve these disputes favourably, it may have a material adverse impact on the
Companys financial performance, cash flows or results of operations.

The Company may fail to achieve and maintain the adequacy
of internal control over financial reporting pursuant to the requirements of the
Sarbanes-Oxley Act

The
Company documented and tested during its most recent fiscal year, its internal
control procedures in order to satisfy the requirements of Section 404 of the
Sarbanes-Oxley Act (SOX). SOX requires an annual assessment by management of
the effectiveness of the Companys internal control over financial reporting and
an attestation report by the Companys independent auditors addressing this
assessment. The Company may fail to achieve and maintain the adequacy of its
internal control over financial reporting as such standards are modified,
supplemented, or amended from time to time, and the Company may not be able to
ensure that it can conclude on an ongoing basis that it has effective internal
controls over financial reporting in accordance with Section 404 of SOX. The
Companys failure to satisfy the requirements of Section 404 of SOX on an
ongoing, timely basis could result in the loss of investor confidence in the
reliability of its financial statements, which in turn could harm the Companys
business and negatively impact the trading price of the Common Shares or market
value of its other securities. In addition, any failure to implement required
new or improved controls, or difficulties encountered in their implementation,
could harm the Companys operating results or cause it to fail to meet its
reporting obligations. There can be no assurance that the Company will be able
to remediate material weaknesses, if any, identified in future periods, or
maintain all of the controls necessary for continued compliance, and there can
be no assurance that the Company will be able to retain sufficient skilled
finance and accounting personnel. Future acquisitions of companies, if any, may
provide the Company with challenges in implementing the required processes,
procedures and controls in its acquired operations. Future acquired companies,
if any, may not have disclosure controls and procedures or internal control over
financing reporting that are as thorough or effective as those required by
securities laws currently applicable to the Company.

No
evaluation can provide complete assurance that the Companys internal control
over financial reporting will detect or uncover all failures of persons within
the Company to disclose material information otherwise required to be reported.
The effectiveness of the Companys control and procedures could also be limited
by simple errors or faulty judgments. In addition, as the Company continues to
expand, the challenges involved in implementing appropriate internal controls
over financial reporting will increase and will require that the Company
continue to improve its internal controls over financial reporting. Although the Company intends to
devote substantial time and incur costs, as necessary, to ensure ongoing
compliance, the Company cannot be certain that it will be successful in
complying with Section 404.

- 12 -

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Risks Relating to the Mining Operations

Governmental Regulations

The
Mining Operations are subject to extensive laws and regulations governing
exploration, development, production, exports, taxes, labour standards, waste
disposal, protection and remediation of the environment, reclamation, historic
and cultural resources preservation, mine safety and occupation health,
handling, storage and transportation of hazardous substances and other matters.
The costs of discovering, evaluating, planning, designing, developing,
constructing, operating and closing the Mining Operations in compliance with
such laws and regulations are significant. It is possible that the costs and
delays associated with compliance with such laws and regulations could become
such that the owners or operators of the Mining Operations would not proceed
with the development of or continue to operate a mine. Moreover, it is possible
that future regulatory developments, such as increasingly strict environmental
protection laws, regulations and enforcement policies thereunder, and claims for
damages to property and persons resulting from the Mining Operations could
result in substantial costs and liabilities for the owners or operators of the
Mining Operations in the future such that they would not proceed with the
development of, or continue to operate, a mine.

International Operations

The
operations at the Luismin Mines, the Peñasquito Mine, the Campo Morado Mine and
the Cozamin Mine are conducted in Mexico, the operations at the Zinkgruvan Mine
are conducted in Sweden, the operations at the Yauliyacu Mine, the Lagunas Norte
mine and the Pierina mine are conducted in Perú, the operations of the Stratoni
Mine are conducted in Greece, the operations at the Mineral Park Mine and the
Rosemont Project are conducted in the United States, the operations of the Keno
Hill Mine and the Minto Mine are conducted in Canada, the operations of the
Pascua-Lama Project are conducted in Chile and Argentina, the operations of the
Veladero Mine and the Loma de La Plata Project are conducted in Argentina, and
the operations of the Neves-Corvo Mine and the Aljustrel Mine are conducted in
Portugal, and as such the operations are all exposed to various levels of
political, economic and other risks and uncertainties. These risks and
uncertainties include, but are not limited to, terrorism, hostage taking,
military repression, crime, political instability, currency controls, extreme
fluctuations in currency exchange rates, high rates of inflation, labour unrest,
the risks of war or civil unrest, expropriation and nationalization,
renegotiation or nullification of existing concessions, licenses, permits,
approvals and contracts, illegal mining, changes in taxation laws, regulations
and policies, restrictions on foreign exchange and repatriation, and changing
political conditions and governmental regulations relating to foreign investment
and the mining business. Argentina and Peru are countries that have experienced
political, social and economic unrest in the past and protestors have from time
to time targeted foreign mining firms.

Changes,
if any, in mining or investment policies or shifts in political attitude may
adversely affect the operations or profitability of the Mining Operations in
these countries. 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,
expropriation of property, foreign investment, maintenance of claims,
environmental legislation, land use, land claims of local people, water use,
mine safety and the rewarding of contracts to local contractors or requiring
foreign contractors to employ citizens of, or purchase supplies from, a
particular jurisdiction. Failure to comply strictly with applicable laws,
regulations and local practices relating to mineral right applications and
tenure, could result in loss, reduction or expropriation of entitlements, or the
imposition of additional local or foreign parties as joint venture partners with
carried or other interests.

The
occurrence of these various factors and uncertainties cannot be accurately
predicted and could have an adverse effect on the Mining Operations.

Exploration, Development and Operating Risks

Mining
operations generally involve a high degree of risk. The Mining Operations are
subject to all the hazards and risks normally encountered in the exploration,
development and production of metals, including unusual and unexpected geologic
formations, seismic activity, rock bursts, cave-ins, flooding, environmental
hazards and the discharge of toxic chemicals, explosions and other conditions
involved in the drilling, blasting and removal of material, any of which could
result in damage to, or destruction of mines and other producing facilities,
damage to property, injury or loss of life, environmental damage, work
stoppages, delays in production, increased production costs and possible legal
liability. Milling operations are subject to hazards such as equipment
failure or failure of retaining dams around tailings disposal areas which may
result in environmental pollution and consequent liability for the owners or
operators of the Mining Operations.

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The
exploration for and development of mineral deposits involves significant risks
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 locate and establish
mineral reserves, to develop metallurgical processes and to construct mining and
processing facilities at a particular site. It is impossible to ensure that the
exploration or development programs planned by the owners or operators of the
Mining Operations will result in a profitable commercial mining operation.
Whether a mineral deposit will be commercially viable depends on a number of
factors, some of which are: the particular attributes of the deposit, such as
size, grade and proximity to infrastructure; metal prices which are highly
cyclical; government regulations, including regulations relating to prices,
taxes, royalties, land tenure, land use, importing and exporting of minerals and
environmental protection; and political stability. The exact effect of these
factors cannot be accurately predicted.

Environmental Regulation

All
phases of mining and exploration operations are subject to governmental
regulation including environmental regulation. Environmental legislation is
becoming more strict, with increased fines and penalties for non-compliance,
more stringent environmental assessments of proposed projects and heightened
responsibility for companies and their officers, directors and employees. There
can be no assurance that possible future changes in environmental regulation
will not adversely affect the Mining Operations. As well, environmental hazards
may exist on a property in which the owners or operators of the Mining
Operations hold an interest which were caused by previous or existing owners or
operators of the properties and of which such owners or operators are not aware
at present and which could impair the commercial success, levels of production
and continued feasibility and project development and mining operations on these
properties.

Permitting

The
Mining Operations are subject to receiving and maintaining permits from
appropriate governmental authorities. Although the Company believes that the
owners and operators of the Mining Operations currently have all required
permits for their respective operations as currently conducted, there is no
assurance that delays will not occur in connection with obtaining all necessary
renewals of such permits for the existing operations, additional permits for any
possible future changes to operations or additional permits associated with new
legislation. Prior to any development on any of these properties, permits from
appropriate governmental authorities may be required. There can be no assurance
that the owners or operators of the Mining Operations will continue to hold all
permits necessary to develop or continue operating at any particular property.
See Permitting, Construction, Development and Expansion Risk for additional
permitting risks associated with developmental projects.

Compliance with Laws

Failure
to comply with applicable laws, regulations and permitting requirements may
result in enforcement actions thereunder, including orders issued by regulatory
or judicial authorities causing operations to cease or be curtailed, and may
include corrective measures requiring capital expenditures, installation of
additional equipment or remedial actions. Parties engaged in mining operations
may be required to compensate those suffering loss or damage by reason of the
mining activities and may be liable for civil or criminal fines or penalties
imposed for violations of applicable laws or regulations. Amendments to current
laws, regulations and permitting requirements, or more stringent application of
existing laws, may have a material adverse impact on the owners or operators of
the Mining Operations, resulting in increased capital expenditures or production
costs, reduced levels of production at producing properties or abandonment or
delays in development of properties.

Infrastructure

Mining,
processing, development and exploration activities depend, to one degree or
another, on adequate infrastructure. Reliable roads, bridges, power sources and
water supply are important determinants, which affect capital and operating
costs. Unusual or infrequent weather phenomena, sabotage, government or other
interference in the maintenance or provision of such infrastructure could
adversely affect the Mining Operations.

Mineral Reserve and Mineral Resource Estimates

The reported mineral reserves and
mineral resources for the Mining Operations are only estimates. No assurance can
be given that the estimated mineral reserves and mineral resources will be
recovered or that they will be recovered at the rates estimated. Mineral reserve
and mineral resource estimates are based on limited sampling, and, consequently,
are uncertain because the samples may not be representative. Mineral reserve and
mineral resource estimates may require revision (either up or down) based on
actual production experience. Market fluctuations in the price of metals, as
well as increased production costs or reduced recovery rates, may render certain
mineral reserves and mineral resources uneconomic and may ultimately result in a
restatement of estimated reserves and/or resources.

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Need for Additional Mineral Reserves

Because
mines have limited lives based primarily on proven and probable mineral
reserves, the Mining Operations must continually replace and expand their
mineral reserves as their mines produce metals. The life-of-mine estimates for
the Mining Operations may not be correct. The ability of the owners or operators
of the Mining Operations to maintain or increase their annual production of
silver or gold will be dependent in significant part on their ability to bring
new mines into production and to expand mineral reserves at existing mines.

Mineral
resources that are not mineral reserves do not have demonstrated economic
viability. Due to the uncertainty of inferred mineral resources, there is no
assurance that inferred mineral resources will be upgraded to proven and
probable mineral reserves as a result of continued exploration.

Land Title

No
assurances can be given that there are no title defects affecting the properties
and mineral claims owned or used by the Mining Operations. Such properties and
claims may be subject to prior unregistered liens, agreements, transfers or
claims, including native land claims, and title may be affected by, among other
things, undetected defects. In addition, the operators of such operations may be
unable to operate them as permitted or to enforce their rights with respect to
their properties and claims which may ultimately impair the ability of these
operators to fulfill their obligations under the silver and precious metals
purchase agreements with the Company.

Commodity Price Fluctuations

The
price of metals has fluctuated widely in recent years, and future serious price
declines could cause continued development of and commercial production from the
Mining Operations to be impracticable. Depending on the price of other metals
produced from the mines which generate cash flow to the owners, cash flow from
the Mining Operations may not be sufficient and such owners could be forced to
discontinue production and may lose their interest in, or may be forced to sell,
some of their properties. Future production from the Mining Operations is
dependent on metal prices that are adequate to make these properties economic.

In
addition to adversely affecting the reserve estimates and financial conditions,
declining commodity prices can impact operations by requiring a reassessment of
the feasibility of a particular project. Such a reassessment may be the result
of a management decision or may be required under financing arrangements related
to a particular project. Even if the project is ultimately determined to be
economically viable, the need to conduct such a reassessment may cause
substantial delays or may interrupt operations until the reassessment can be
completed.

Additional Capital

The
mining, processing, development and exploration of the Mining Operations may
require substantial additional financing. Failure to obtain sufficient financing
may result in delaying or indefinite postponement of exploration, development or
production on any or all of the Mining Operations and related properties or even
a loss of property interest. There can be no assurance that additional capital
or other types of financing will be available if needed or that, if available,
will be on satisfactory terms.

Permitting, Construction, Development and Expansion Risk

The Peñasquito Mine, the Mineral Park Mine, the Keno Hill Mine, the Pascua-Lama
Project, the Loma de La Plata Project and the Rosemont Project are currently in
various stages of permitting, construction, development and expansion.
Construction, development and expansion of such projects is subject to numerous
risks, including, but not limited to, delays in obtaining equipment, material and services essential to
completing construction of such projects in a timely manner; delays or inability
to obtain all required permits; changes in environmental or other government
regulations; currency exchange rates; labour shortages; and fluctuation in metal
prices. There can be no assurance that the operators of such projects will have
the financial, technical and operational resources to complete the permitting,
construction, development and expansion of such projects in accordance with
current expectations or at all.

- 15 -

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TECHNICAL INFORMATION

CIM Standards Definitions

The
estimated Mineral Reserves and Mineral Resources for the Mining Operations have
been calculated in accordance with the Canadian Institute of Mining, Metallurgy
and Petroleum (CIM)  Definitions adopted by CIM Council on December 11, 2005
(the CIM Standards) or in accordance with the Australasian Code for Reporting
of Mineral Resources and Ore Reserves (the JORC Code), the Australian
worldwide standards, and were restated in accordance with the requirements of
the Canadian Securities Administrators National Instrument 43-101 Standards
of Disclosure for Mineral Projects (NI 43-101) to comply with the CIM
Standards. The following definitions are reproduced from the CIM Standards:

The
term Mineral Resource is a concentration or occurrence of
diamonds, natural, solid, inorganic or fossilized organic material including
base and precious metals, coal, and industrial minerals in or on the Earths
crust in such form and quantity and of such a grade or quality that it has
reasonable prospects for economic extraction. The location, quantity, grade,
geological characteristics and continuity of a Mineral Resource are known,
estimated or interpreted from specific geological evidence and knowledge.
Mineral Resources are sub-divided, in order of increasing geological confidence,
into Inferred, Indicated and Measured categories.

The
term Inferred Mineral Resource is that part of a Mineral
Resource for which quantity and grade or quality can be estimated on the basis
of geological evidence and limited sampling and reasonably assumed, but not
verified, geological and grade continuity. The estimate is based on limited
information and sampling gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes.

The
term Indicated Mineral Resource is that part of a Mineral
Resource for which quantity, grade or quality, densities, shape and physical
characteristics, can be estimated with a level of confidence sufficient to allow
the appropriate application of technical and economic parameters, to support
mine planning and evaluation of the economic viability of the deposit. The
estimate is based on detailed and reliable exploration and testing information
gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are spaced closely enough for
geological and grade continuity to be reasonably assumed.

The
term Measured Mineral Resource is that part of a Mineral
Resource for which quantity, grade or quality, densities, shape and physical
characteristics are so well established that they can be estimated with
confidence sufficient to allow the appropriate application of technical and
economic parameters, to support production planning and evaluation of the
economic viability of the deposit. The estimate is based on detailed and
reliable exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits, workings
and drill holes that are spaced closely enough to confirm both geological and
grade continuity.

The
term Mineral Reserve is the economically mineable part of a
Measured or Indicated Mineral Resource demonstrated by at least a Preliminary
Feasibility Study. This study must include adequate information on mining,
processing, metallurgical, economic and other relevant factors that demonstrate,
at the time of reporting, that economic extraction can be justified. A Mineral
Reserve includes diluting materials and allowances for losses that may occur
when the material is mined.

The
term Probable Mineral Reserve is the economically mineable part
of an Indicated Mineral Resource and, in some circumstances, a Measured Mineral
Resource demonstrated by at least a Preliminary Feasibility Study. This study
must include adequate information on mining, processing, metallurgical, economic
and other relevant factors that demonstrate, at the time of reporting, that
economic extraction can be justified.

The
term Proven Mineral Reserve is the economically mineable part of
a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility
Study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors
that demonstrate, at the time of reporting, that economic extraction is
justified.

- 16 -

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Cautionary Note to United States Investors Concerning
Estimates of Measured, Indicated and Inferred Mineral Resources

This
annual information form uses the terms Measured, Indicated and Inferred
Mineral Resources. United States investors are advised that while such terms are
recognized and required by Canadian regulations, the United States Securities
and Exchange Commission does not recognize them and expressly prohibits U.S.
registered companies from including such terms in their filings with the United
States Securities and Exchange Commission. Inferred Mineral Resources have a
great amount of uncertainty as to their existence, and as to their economic and
legal feasibility. It cannot be assumed that all or any part of an Inferred
Mineral Resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of Inferred Mineral Resources may not form the basis of
feasibility or other economic studies. United States investors are cautioned
not to assume that all or any part of Measured or Indicated Mineral Resources
will ever be converted into Mineral Reserves. United States investors are also
cautioned not to assume that all or any part of an Inferred Mineral Resource
exists, or is economically or legally mineable.

- 17 -

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Summary of Mineral Reserves and Mineral Resources

The
following tables set forth the estimated Mineral Reserves and Mineral Resources
(silver only, except where a purchase agreement includes gold) for the mines
relating to which the Company has purchase agreements, adjusted where applicable
to reflect the Companys percentage entitlement to silver and/or gold produced
from such mines, as of December 31, 2011, unless otherwise noted. The tables are
based on information available to the Company as of the date of this document,
and therefore will not reflect updates, if any, after such date. The most
current Mineral Reserves and Mineral Resources will be available on the
Companys website:

ATTRIBUTABLE PROVEN AND PROBABLE RESERVES(1,2,3,8,14,15)AS OF DECEMBER 31, 2011 UNLESSOTHERWISE NOTED(6)

|                   | Proven  | Probable | Proven
      & Probable |        
|------------------ | ------- | -------- | ----------------------- | -------
|                   |         |          |                         |        
|                   | Tonnage | Grade    | Contained               | Tonnage
|SILVER             | Mt      | g/t      | M
      oz              | Mt     
|Peñasquito (25%)   |         |          |                         |        
|Mill               | 156.6   | 28.9     | 145.5                   | 129.3  
|Heap Leach         | 8.3     | 14.4     | 3.9                     | 23.0   
|San Dimas(10)      | 2.1     | 364.0    | 24.8                    | 3.8    
|                   |         |          |                         |        
|Pascua-Lama (25%)  | 9.9     | 59.5     | 18.9                    | 86.3   
|Lagunas Norte(11)  | 3.3     | 3.2      | 0.3                     | 37.6   
|Pierina(11)        | 2.1     | 19.9     | 1.3                     | 18.9   
|Veladero(11)       | 3.7     | 13.4     | 1.6                     | 61.3   
|Yauliyacu(12)      | 1.0     | 99.6     | 3.3                     | 2.7    
|Neves-Corvo        |         |          |                         |        
|Copper             | 23.2    | 44.0     | 32.9                    | 4.5    
|Zinc               | 19.4    | 67.0     | 41.7                    | 3.8    
|Rosemont(13)       | 128.8   | 4.5      | 18.5                    | 366.8  
|Mineral Park(13)   | 293.9   | 2.7      | 25.7                    | 74.5   
|Zinkgruvan         |         |          |                         |        
|Zinc               | 8.2     | 103.0    | 27.2                    | 2.4    
|Copper             | 2.8     | 32.0     | 2.8                     | 0.1    
|Aljustrel          |         |          |                         |        
|Copper             | 2.2     | 19.2     | 1.3                     | 8.4    
|                   |         |          |                         |        
|Campo Morado (75%) | 0.7     | 166.7    | 3.8                     | 0.1    
|Stratoni           | 1.7     | 174.0    | 9.3                     | 0.1    
|Minto              | 7.8     | 5.4      | 1.3                     | 5.1    
|Cozamin            |         |          |                         |        
|Copper             | 1.6     | 76.3     | 4.0                     | 5.9    
|Zinc               | -       | -        | -                       | 1.9    
|Los Filos          | 81.0    | 5.2      | 13.5                    | 231.2  
|                   |         |          |                         |        
|Total Silver       |         |          | 381.4                   |        
|GOLD               |         |          |                         |        
|Minto              | 7.8     | 0.63     | 0.16                    | 5.1    
|Total Gold         |         |          | 0.16                    |        

- 18 -

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ATTRIBUTABLE MEASURED & INDICATED RESOURCES(1,2,3,4,5,9,14,15)AS OF DECEMBER 31, 2011
UNLESSOTHERWISE NOTED(6)

|                   | Measured | Indicated | Measured
      & Indicated
|------------------ | -------- | --------- | --------------------------
|                   |          |           |                           
|                   | Tonnage  | Grade     | Contained                 
|SILVER             | Mt       | g/t       | M
      oz                
|Peñasquito (25%)   |          |           |                           
|Mill               | 34.1     | 13.1      | 14.4                      
|Heap Leach         | 1.0      | 4.6       | 0.2                       
|Pascua-Lama (25%)  | 5.3      | 24.5      | 4.2                       
|Yauliyacu(12)      | 0.7      | 108.5     | 2.5                       
|Neves-Corvo        |          |           |                           
|Copper             | 15.4     | 53.0      | 26.2                      
|Zinc               | 42.7     | 54.3      | 74.6                      
|Rosemont(13)       | 7.2      | 3.9       | 0.9                       
|Mineral Park(13)   | 101.0    | 2.6       | 8.4                       
|Zinkgruvan         |          |           |                           
|Zinc               | 0.9      | 123.4     | 3.8                       
|Copper             | 2.7      | 24.4      | 2.1                       
|Aljustrel          |          |           |                           
|Zinc               | 1.3      | 65.6      | 2.7                       
|Copper             | -        | -         | -                         
|Campo Morado (75%) | 2.1      | 162.1     | 10.8                      
|Loma de La Plata   |          |           |                           
|(12.5%)            | -        | -         | -                         
|Minto              | 5.4      | 3.8       | 0.6                       
|Cozamin            |          |           |                           
|Copper             | 0.6      | 81.5      | 1.5                       
|Keno Hill (25%)    |          |           |                           
|Underground        | -        | -         | -                         
|Elsa Tailings      | -        | -         | -                         
|Los Filos          | 7.9      | 9.5       | 2.4                       
|                   |          |           |                           
|Total Silver       |          |           | 155.2                     
|GOLD               |          |           |                           
|Minto              | 5.4      | 0.47      | 0.08                      
|Total Gold         |          |           | 0.08                      

- 19 -

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ATTRIBUTABLE INFERRED RESOURCES(1,2,3,4,5,9,14,15)AS OF DECEMBER 31, 2011 UNLESS
OTHERWISE NOTED (6)

InferredTonnage
      Grade
      ContainedSILVER
      Mt
      g/t
      M
        ozPeñasquito (25%)Mill
      36.7
      8.8
      10.4Heap Leach
      14.1
      1.7
      0.8San Dimas(10)
      16.9
      329.8
      178.7Pascua-Lama (25%)
      8.1
      15.5
      4.0Yauliyacu(12)
      13.8
      163.5
      72.7Neves-CorvoCopper
      28.5
      40.0
      36.6Zinc
      33.0
      55.0
      58.3Rosemont(13)
      163.0
      2.1
      11.2Mineral Park(13)
      320.1
      2.3
      23.9ZinkgruvanZinc
      5.6
      69.0
      12.4Copper
      0.8
      36.0
      0.9AljustrelZinc
      8.7
      50.4
      14.0Copper
      4.7
      16.0
      2.4Campo Morado (75%)
      2.4
      117.3
      9.1Stratoni
      0.7
      217.0
      4.7Loma de La Plata (12.5%)
      0.2
      76.0
      0.4Minto
      6.0
      2.8
      0.5CozaminCopper
      2.4
      52.6
      4.0Zinc
      1.7
      30.1
      1.6Keno Hill (25%)Underground
      0.1
      340.1
      1.4Los Filos
      158.4
      5.9
      29.9TOTAL SILVER
      
      
      477.9GOLDMinto
      6.0
      0.25
      0.05TOTAL GOLD
      
      
      0.05


- 20 -

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|1. | All Mineral Reserves and Mineral Resources have been
      calculated in accordance with the CIM Standards and NI 43-101, or the
      AusIMM JORC equivalent.                                                                                                                                                                                                                             
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Mineral Reserves and Mineral Resources are reported above
      in millions of metric tonnes (Mt), grams per metric tonne (g/t) and
      millions of ounces (Moz).                                                                                                                                                                                                                  
|3. | Individual qualified persons (QPs), as defined by the
      NI 43-101, for the Mineral Reserve and Mineral Resource estimates are as
      follows:                                                                                                                                                                                                                                      
|   | a.                                                                                                                                                                                                                                                                                                                                                                                         
|   | b.                                                                                                                                                                                                                                                                                                                                                                                         
|   | c.                                                                                                                                                                                                                                                                                                                                                                                         
|   | d.                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Companys QPs are responsible for overall corporate
      review and all other operations and development projects.                                                                                                                                                                                                                                                                    
|4. | The Mineral Resources reported in the above tables are
      exclusiveof Mineral Reserves. The Minto, Cozamin,
      Neves-Corvo, Zinkgruvan and Aljustrel mines report Mineral Resources
      inclusive of Mineral Reserves. The Companys QPs have made the exclusive
      Mineral Resource estimates for these mines based on average mine
      recoveries and dilution.             
|5. | Mineral Resources which are not Mineral Reserves do not
      have demonstrated economic viability.                                                                                                                                                                                                                                                                                        
|6. | Other than as detailed below, Mineral Reserves and
      Mineral Resources are reported as of December 31, 2011 based on
      information available to the Company as of the date of this document, and
      therefore will not reflect updates, if any, after such date. The most
      current Mineral Reserves and Mineral Resources will be available on the
      Companys website.
|   | a.                                                                                                                                                                                                                                                                                                                                                                                         
|   | b.                                                                                                                                                                                                                                                                                                                                                                                         
|   | c.                                                                                                                                                                                                                                                                                                                                                                                         
|   | d.                                                                                                                                                                                                                                                                                                                                                                                         
|   | e.                                                                                                                                                                                                                                                                                                                                                                                         
|   | f.                                                                                                                                                                                                                                                                                                                                                                                         
|   | g.                                                                                                                                                                                                                                                                                                                                                                                         
|   | h.                                                                                                                                                                                                                                                                                                                                                                                         
|   | i.                                                                                                                                                                                                                                                                                                                                                                                         
|   | j.                                                                                                                                                                                                                                                                                                                                                                                         
|   | k.                                                                                                                                                                                                                                                                                                                                                                                         
|6. | Process recoveries are the average percentage of silver
      in a saleable product (doré or concentrate) recovered from mined ore at
      the applicable site process plants as reported by the operators.                                                                                                                                                                               
|7. | Mineral Reserves are estimated using appropriate process
      recovery rates and commodity prices of $20.00 per ounce of silver, unless
      otherwise noted below:                                                                                                                                                                                                                      
|   | a.                                                                                                                                                                                                                                                                                                                                                                                         
|   | b.                                                                                                                                                                                                                                                                                                                                                                                         
|   | c.                                                                                                                                                                                                                                                                                                                                                                                         
|   | d.                                                                                                                                                                                                                                                                                                                                                                                         
|   | e.                                                                                                                                                                                                                                                                                                                                                                                         
|   | f.                                                                                                                                                                                                                                                                                                                                                                                         
|   | g.                                                                                                                                                                                                                                                                                                                                                                                         
|   | h.                                                                                                                                                                                                                                                                                                                                                                                         
|   | i.                                                                                                                                                                                                                                                                                                                                                                                         
|   | j.                                                                                                                                                                                                                                                                                                                                                                                         
|8. | Mineral Resources are estimated using appropriate
      recovery rates and commodity prices of $24.00 per ounce of silver, unless
      otherwise noted below:                                                                                                                                                                                                                             
|   | a.                                                                                                                                                                                                                                                                                                                                                                                         
|   | b.                                                                                                                                                                                                                                                                                                                                                                                         
|   | c.                                                                                                                                                                                                                                                                                                                                                                                         
|   | d.                                                                                                                                                                                                                                                                                                                                                                                         
|   | e.                                                                                                                                                                                                                                                                                                                                                                                         
|   | f.                                                                                                                                                                                                                                                                                                                                                                                         
|   | g.                                                                                                                                                                                                                                                                                                                                                                                         
|   | h.                                                                                                                                                                                                                                                                                                                                                                                         
|   | i.                                                                                                                                                                                                                                                                                                                                                                                         
|   | j.                                                                                                                                                                                                                                                                                                                                                                                         
|   | k.                                                                                                                                                                                                                                                                                                                                                                                         

- 21 -

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| | l. | Keno Hill  $15.25 per ounce for the Southwest and 99
      Zones, $14.50 per ounce for the East Zone, $17.00 per ounce for the Elsa
      Tailings and $18.50 per ounce for the Lucky Queen and Onek
  deposits.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9.  | The San Dimas purchase agreement provides that from
      August 6, 2010 until August 5, 2014, Primero Mining Corp. (Primero) will
      deliver to the Company a per annum amount equal to the first 3.5 million
      ounces of payable silver produced at San Dimas and 50% of any excess, plus
      the Company will receive an additional 1.5 million ounces of silver per
      annum to be delivered by Goldcorp. Beginning August 6, 2014, Primero will
      deliver to the Company a per annum amount equal to the first 6.0 million
      ounces of payable silver produced at San Dimas and 50% of any excess, for
      the life of the mine.                                                                                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | As per Primeros press release on January 17, 2012,
      Primero is undertaking a review of the reserve and resource estimation
      methods currently, and historically, used at San Dimas in order to
      determine whether other estimation methods might be used to improve
      predictability of operating results and, therefore, assist long term
      planning. While the results of this review are not currently known, the
      adoption of any new estimation methods may result in the Silver Wheaton
      reporting different and potentially lower total mineral reserve and total
      mineral resource numbers. Primero also states in their press release that
      it is not expected that any potential change in estimates will change the
      level of confidence Primero has in the ultimate mineral potential of San
      Dimas and that the review of estimation methodology is being driven by a
      desire to determine if greater operating predictability and improved mine
      planning can be achieved.
|10. | The Companys attributable tonnage at Pierina was
      estimated by assuming 2011 production level for the remaining two years.
      The Companys attributable tonnage at Lagunas Norte and Veladero was
      estimated by assuming 2012 and 2013 processed tonnes based on Barricks
      life of mine (LOM) plans. Tonnes for all three operations were pro-rated
      between Proven and Probable Mineral Reserves according to the ratio of
      Barricks December 31, 2011 Proven and Probable Mineral Reserves. Average
      reserve grades were applied to the Pierina estimates and the average LOM
      plan grades were applied to Lagunas Norte and Veladero. LOM plans and
      December 31, 2011 Mineral Reserves estimates are as published by
      Barrick.                                                                                                                                                                                                                                                                
|11. | The Companys Yauliyacu purchase agreement (March 2006)
      with Glencore International AG provides for the delivery of up to 4.75
      million ounces of silver per year for 20 years. In the event that silver
      produced at Yauliyacu in any year totals less than 4.75 million ounces,
      the maximum amount to be sold to the Company in subsequent years will be
      increased to make up the shortfall, so long as production allows.
      Depending upon mine production levels, it is possible that these
      attributable Resources and Reserves may not be completely mined before the
      agreement expires.                                                                                                                                                                                                                                                                                                                                                                                                               
|12. | The Mineral Park and Rosemont Resources and Reserves do
      not include the SX/EW leach material since this process does not recover
      silver.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|13. | The Company has filed a technical report for each of its
      mineral projects considered to be material to the Company, being San
      Dimas, Yauliyacu, Peñasquito and Pascua-Lama, which are available on SEDAR
      at www.sedar.com.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|14. | Silver is produced as a by-product metal at all
      operations with the exception of the Keno Hill Mine and Loma de La Plata
      project; therefore, the economic cut-off applied to the reporting of
      silver Resources and Reserves will be influenced by changes in the
      commodity prices of other metals at the time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

- 22 -

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FURTHER DISCLOSURE REGARDING MINERAL PROJECTS ON MATERIAL
PROPERTIES

SAN DIMAS MINES, MEXICO

At
the request of the Company, Velasquez Spring, P.Eng., Senior Geologist at Watts,
Griffis and McOuat Limited (WGM), and Gordon Watts, P.Eng., Senior Associate
Mineral Economist at WGM, prepared a technical report in accordance with NI
43-101 entitled Technical Report on the Tayoltita, Santa Rita and San Antonio
Mines, Durango Mexico for Silver Wheaton Corp. dated March 14, 2011 (the San
Dimas Report). Velasquez Spring and Gordon Watts are each qualified persons and
independent of the Company within the meaning of NI 43-101.

The
following description of the San Dimas Mines has been summarized from the San
Dimas Report, with relevant 2011 updates. Readers should consult the San Dimas
Report to obtain further particulars regarding the San Dimas Mines. The San
Dimas Report is available for review on the SEDAR website located at
www.sedar.com under the Companys profile.

Project Description and Location

Primeros
three mines in the San Dimas district, on the border of Durango and Sinaloa
states include San Antonio (Central Block), Tayoltita and Santa Rita. The San
Dimas mining district is centered on latitude 24 degrees 6 minutes N and
longitude 105 degrees 56 minutes W located approximately 125 kilometres
northeast of Mazatlan, Sinaloa or approximately 150 kilometres west of the city
of Durango in the state of Durango, Mexico. The San Dimas properties are
surveyed and contained in a contiguous block in an area of 24,965.5 hectares.
Primero also holds 28 mining concessions (3,470.4 hectares) at Mala
Noche-Ventanas-San Cayeto (the Ventanas Project) a former small, underground
mine located approximately 23 kilometres SE from the San Dimas mine.

As
per Mexican requirements for grant of tenure, the concessions comprising the San Dimas Mine have been surveyed on the ground by a licensed surveyor and the
licences are in good standing. Surface rights have been secured by either
acquisition of private and public land or by entering into temporary occupation
agreements with surrounding communities. There are no royalties payable to any
entity. Current Mexican legislation does not require government royalty
payments. Primero also holds the appropriate permits under local, State and
Federal laws to allow mining operations.

All
mines are underground gold and silver operations using primarily mechanized cut
and fill mining methods. After milling, cyanidation, precipitation and smelting,
doré bars are poured and then transported for refining to Johnson Matthey in
Salt Lake City, Utah. The mill currently has an installed capacity of 2,100
tonnes per day. In 2011, the mill averaged 1,955 tonnes per day (based on 339
days of production) and production from the San Dimas Mines was 79,564 ounces of
gold and 4,602,846 ounces of silver.

Accessibility, Climate, Local Resources, Infrastructure
and Physiography

Access
to the San Dimas area is by air or road from the city of Durango. By road the
trip requires approximately 10 hours. Primero maintains a de Havilland Twin
Otter aircraft and a helicopter, both of which are based at Tayoltita. Travel
from either Mazatlan or Durango to Tayoltita requires an approximate one hour
flight in the Twin Otter aircraft. Most of the personnel and light supplies for
the San Dimas Mine arrive on Primeros regular flights from Mazatlan and
Durango. Heavy equipment and supplies are brought in by road from Durango.

The
climate of the San Dimas area is semi-tropical characterized by relatively high
temperatures and humidity, with hot summers (maximum about 35° Celsius) and mild
winters. At higher elevations in the Sierra, frosty nights occur in the winter
(November to March). The majority of the precipitation occurs in the summer
(June through September) however tropical rainstorms during October to January
can result in considerable additional rainfall. The total average annual
rainfall varies from about 66 to 108 centimetres.

The
San Dimas district is located in the central part of the Sierra Madre
Occidental, a mountain range characterized by very rugged topography with steep,
often vertical walled valleys and narrow canyons. Elevations vary from 2,400
metres above mean sea level on the high peaks to elevations of 400 metres in the
valley floor of the Piaxtla River.

Water
for the mining operations is obtained from wells and from the Piaxtla River.
Water is also supplied by Primero to the town of Tayoltita from an underground
thermal spring at the Santa Rita mine.

- 23 -

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Electrical
power is provided by a combination of Primeros own system and the Federal Power
Commission supply system. Primero operates hydroelectric and back-up diesel
generators which are interconnected with the Federal Power Commission supply
system. Primeros hydroelectrical power was increased with additional turbines
in a tunnel from Trout Lake. Except for a few months of the year, during the dry
season, hydroelectric generation from the Trout Reservoir provides all the
electric requirements of the San Dimas Mine. An increase in the height of the
face of the dam is planned for the future in order to increase the capacity of
the Trout Reservoir to meet the San Dimas Mine electric requirements year
round.

The
Santa Rita mine is located three kilometres upstream from Tayoltita. The ore
from the Santa Rita mine is trucked along a winding road that follows the Rio
Piaxtla to the Tayoltita mill. The San Antonio mine is located seven kilometres
west of the Tayoltita mine in the State of Sinaloa. The mine and mill at San
Antonio have been shut down.

History

The
San Dimas district has experienced a long mining history. Precious metal
production was first reported in 1757 by a group of Spanish families living at
Las Queleles (near present town of Tayoltita). Government and religious
authorities made several unsuccessful attempts to determine the location of the
Queleles group of mines. By 1795, a town of 10,000 residents had been
established upstream at Guarisamey where other gold and silver veins had been
discovered. The Spanish continued working several of the mines until the start
of the Mexican War of Independence (1810). Mining activity in the district then
decreased and did not start up again until the 1880s when agents of William
Randolph Hearst of San Francisco and American Colonel Daniel Burns arrived in
the area. W.R. Hearst acquired the Tayoltita mine under the name of the San Luis
Mining Company. In 1883, when Colonel Burns took control of the Candelaria mine,
modern mining methods began. Later the Contraestaca (San Antonio) mine was
discovered along with several large bonanza grade orebodies.

In
1904, the first cyanide mill in Mexico was built at Tayoltita. By 1940, the
Candelaria mine had been mined out and the properties of the Mexican Candelaria
and Contraestaca mines were purchased by the San Luis Mining Company.

A
mining law introduced in 1959 in Mexico required the majority of a Mexican
mining company to be held by Mexicans and forced the sale of 51% of the shares
of the San Luis Mining Company to Mexicans. In 1961, the Minas de San Luis S.A.
de C.V. was formed and assumed operations of the mine. In 1978, the remaining
49% interest was obtained by a group known as Luismin S.A. de C.V.

Historical
production through 2010 from the San Dimas Mine is estimated at 11.61 million
ounces of gold and 587 million ounces of silver, placing the district third in
Mexico for precious metal production after Pachuca and Guanajuato. Production
from the San Dimas Mine during 2010 was approximately 85,429 ounces of gold and
4.53 million ounces of silver while production in 2009 was approximately 113,000
ounces of gold and 5.1 million ounces of silver.

Geological Setting

The
general geological setting of the San Dimas district is comprised of two major
volcanic successions approximately 3,500 metres in total thickness: the Lower
Volcanic Group (LVG) and the Upper Volcanic Group (UVG) separated by an
erosional and depositional unconformity.

The LVG is of Eocene age predominantly composed of andesites and rhyolitic flows and
tuffs and has been locally divided into five units. The LVG outcrops along the
canyons formed by major westward drainage systems and has been intruded by
younger members of the batholith complex of granitic to granodioritic
composition. The Socavón rhyolite is the oldest volcanic unit in the district,
its lower contact destroyed by the intrusion of the Piaxtla granite.

More
than 700 metres thick, the Socavón rhyolite is host for several productive veins
in the district. Overlying the Socavón rhyolite is the 20 to 75 metres thick,
well bedded Buelna andesite. The Buelna andesite is overlain by the Portal
rhyolite, ranging in thickness from 50 to 250 metres.

The
overlying productive andesite is more than 750 metres in thickness and has been
divided into two varieties based on grain size, but is of identical mineralogy.
One variety is fragmental, varying from lapilli tuff to coarse agglomerate and
the other has a porphyritic texture.

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The
overlying Camichin unit, composed of purple to red interbedded rhyolitic and
andesite tuffs and flows, is more than 300 metres thick. It is the host rock of
most of the productive ore shoots of Patricia, Patricia 2, Santa Rita, Magdalena
and other lesser veins in the Santa Rita mine.

The
Las Palmas Formation, at the top of the LVG, is made up of green conglomerates
at the base and red arkoses and shales at the top, with a total thickness of
approximately 300 metres. This unit outcrops extensively in the Tayoltita area.
The lower contact between the LVG and the underlying Productive Andesite is
unconformable.

The
predominant plutonic events in the district resulted in intrusion of the LVG by
granitic to granodioritic intrusive, part of the Sinaloa composite batholiths.

Other intrusives cutting the LVG include the Intrusive andesite, the Elena aplite and
the Santa Rita dacitic dikes. The even younger Bolaños rhyolite dike, and the
basic dikes intrude both the LVG and UVG. Intrusive activity in the western
portion of the Sierra Madre Occidental has been dated continuously ranging from
102 to 43 million years.

The UVG overlies the eroded surface of the LVG unconformably. In the San Dimas
district, the UVG is divided into a subordinate lower unit composed mainly of
lavas of intermediate composition called Guarisamey andesite and an upper unit
called the Capping rhyolite. The Capping rhyolite is mainly composed of
rhyolitic ash flows and air-fall tuffs and is up to 1,500 metres thick in the
eastern part of the district however, within most of the district, it is about
1,000 metres thick.

The
San Dimas district lies within an area of complex normal faulting along the
western edge of the Sierra Madre Occidental. Compressive forces first formed
predominantly east-west and east-northeast tension gashes that were later cut by
transgressive north-northwest striking slip faults. The strike-slip movements
caused the development of secondary north-northeast faults, with right lateral
displacement.

Five
major north-northwest-trending normal faults divide the district into five
tilted fault blocks generally dipping 35o to the east. This is highlighted in
the preceding diagram. In most cases, the faults are post ore in age and offset
both the LVG and UVG. All major faults display northeast-southwest extension and
dip from near vertical (Peña fault) to less than 55o (Guamuchil fault). Offsets
on the blocks range from a down-throw of 150 metres on the Peña and Arana
faults, to more than 1,500 metres on the Guamuchil fault

Exploration

Typical
of epithermal systems, the silver and gold mineralization at the San Dimas
district exhibits a vertical zone with a distinct top and bottom that Primero
has termed the Favourable Zone. At the time of deposition, this Favourable
Zone was deposited in a horizontal position paralleling the erosional surface of
the LVG on which the UVG was extruded.

This favourable, or productive, zone at San Dimas is some 300 to 600 metres in
vertical extent and can be correlated, based both on stratigraphic and
geochronologic relationships, from vein system to vein system and from fault
block to fault block. Using this concept of the dip of the unconformity at the
base of the UVG, Primero and its predecessors were able to infer the dip of the
Favourable Zone and with considerable success explore and predict the Favourable
Zone in untested areas.

Exploration
of the Favourable Zone at San Dimas District has been done both by diamond
drilling and by underground development work. Diamond drilling is predominantly
done from underground stations as both the rugged topography, (i.e. access to
surface drill stations) and the great drilling distance from the surface
locations to the target(s) makes surface drilling both challenging and
expensive. All exploration drilling and the exploration underground development
work is done in-house by Primero. Diamond drilling is of NQ/HQ size with
excellent core recoveries (in the range of +95%).

For
more than 30 years, Luismin had historically and successfully applied the 30%
probability factor to the volume of the Favourable Zone for estimating the
volume/tonnage of Inferred Mineral Resources that will later be discovered in
the zone. The factor was originally developed by comparing the explored area of
the active veins at that time (San Luis, Guadalupe, Arana, Cedral, etc.) to the
mined out area plus the Mineral Reserve area. However, Primero is currently
re-evaluating the determination of inferred mineral resources.

At
the Tayoltita deposit, silver-gold ratios have been a useful exploration tool.
In most of the veins, detailed studies have shown that silver-gold ratios increase
progressively within the ore zone with the contours strongly elongated along the
strike of the vein. The horizontal elongations of the silver-gold ratios are
thought to represent the former flow path of the ore fluids which were sub
horizontal at the time of the ore deposition suggesting ore shoots can be found
along these possible fluid paths.

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Exploration
in 2010 was concentrated on the Sinaloa Graben, located between the West Block
(San Antonio Mine) and the Central Block, the Central Block (Robertita), and the
Arana Hanging Wall, located between the Tayoltita mine and the Santa Rita mine.
The Sinaloa Graben is a North-South trending block more than 7 kilometre long by
almost 2 kilometre wide, bounded by two regional faults, Limoncito on the east
and Sinaloa on the west, containing more than 10 veins of which only two, San
Juan and San Vicente veins have been mined with the remainder of the veins
unexplored.

In
2010, exploration drilling included 42,000 metre in 118 holes, and 315 metre of
exploration drifting being completed. The majority of additional Mineral
Reserves found during 2010 were located in the Sinaloa Graben.

Central Block

In
the Central Block exploration (50 holes  13,900 metres) was focused on
upgrading the inferred mineral resources to proven and probable mineral reserve
categories and to expand the knowledge at depth of the mineralized system.
Drilling indicated that the known mineralization extends to a depth of at least
150 metres below the deepest current exploitation level.

Sinaloa Graben

In
the Sinaloa Graben, 29 holes were completed for a total of 11,200 metres of
drilling. Drilling was focused on improving the certainty of the inferred
mineral resource and to confirm that the mineralization (ore shoots) were a
continuation of the ore shoots of the Central Block. The exploration results at
Sinaloa Graben continue to confirm higher grade mineralization than existing
Mineral Reserves and Mineral Resources. A recent discovery while drifting in
Sinaloa Graben yielded 22.8 gram per tonne of gold and 2,054 gold per tonne of
silver over 4.42 metre. The newly discovered Aranza vein, along the same drift
also showed high-grade with 10.3 gram per tonne of gold and 1,115 gram per tonne
of silver over 2.75 metres.

Results
have also proven high-grade mineralization extends beyond the Sinaloa Graben to
the west (West Block) and at depth. The Santa Teresa vein, 150 metres to the
west of Sinaloa Graben, showed 16.0 gram per tonne of gold and 508 gram per
tonne of silver over 2.90 metres true width, which is much higher grade and
width than the current average. This area has never been explored in detail and
was included in the 2011 exploration plan.

Arana Hanging Wall

In
the Arana Hanging Wall area, 23 holes were completed in 2010 for a total of
11,900 metres of drilling. The objective of the 2010 exploration program in the
Arana Hanging Wall area was to confirm the presence of the large ore shoots
suggested by previous results.

Drilling
results successfully confirmed the presence of mineralization at above average
Mineral Reserve grade but at narrow widths. Holes A-25-217(1) and HW-4G-01B
returned 7.9 gram per tonne of gold and 778 gram per tonne of silver in a width
of 0.80 metre, and 8.7 gram per tonne of gold and 203 gram per tonne of silver
in a width of 0.60 metre.

A
400 metre x 400 metre grid diamond program, over an area 1.5 kilometre x 3.5
kilometre, totaling 65 drill holes was begun in 2010 in the Arana Hanging Wall.
Four drill holes were completed in 2010 on this potential high grade zone with
12 holes planned for 2011 (eight of the drill sites have been prepared ready to
begin the drilling).

Development
drilling in 2011 was focused in the Central Block and Sinaloa Graben areas. The
Central Block area is still expected to provide the majority of the ore at the
San Dimas Mine, with a small amount of higher-grade ore to come from the main
exploration area of Sinaloa Graben. Primero intends to construct additional
tunnels in 2011 to open new access routes to the main production and exploration
areas and increase operational flexibility.

The
2011 exploration plan was intended to increase Mineral Reserves and Mineral
Resources at a higher rate than in recent years. The plan includes the operation
of 12 drill rigs in 2011 (nine in 2010), 53,000 metres of diamond drilling and
3,800 meters of exploration drifting. Drilling will target the Sinaloa Graben
area, the Roberta, Robertita and Julieta veins in the Central Block, and the Arana Hanging Wall area.
The three-year plan also includes exploration of the larger land package at the
San Dimas Mine as historically only the immediate mine area has been explored in
detail.

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It
is anticipated that drifting in Sinaloa Graben will approach the Roberta,
Robertita and Nancy high-grade veins systems of the adjacent Central Block in
2011. These veins account for the majority of the production at the Central
Block and are expected to account for a large portion of the Mineral Reserves
within the Sinaloa Graben.

Exploration
results in Sinaloa Graben continue to confirm mineralization of a higher grade
and in wider veins than average existing Mineral Reserves. Primero anticipates
that within five years the Sinaloa Graben will contribute about 50% of
production at the San Dimas Mine.

Mineralization

The
deposits of the San Dimas district are high grade, silver-gold-epithermal vein
deposits characterized by low sulphidation and adularia-sericitic alteration
formed during the final stages of igneous and hydrothermal activity from
quartz-monzonitic and andesitic intrusions.

As
is common in epithermal deposits, the hydrothermal activity that produces the
epithermal vein mineralization began a few million years after the intrusion of
the closely associated plutonic rocks and several million years after the end of
the volcanism that produced the rocks that host the hydrothermal systems. At San Dimas, based on age determinations, the average period between the end of late
stage of plutonism and the hydrothermal activity is 2.1 million years, however
hydrothermal activity continued for at least another 5.0 million years. Older
veins appear more common in the eastern part of the district whereas younger
veins are found in the western part.

The
mineralization is typical of epithermal vein structures with banded and drusy
textures. Within the San Dimas district, the veins occupy east-west trending
fractures except in southern part of Tayoltita where they strike mainly
northeast and in the Santa Rita mine where they strike north-northwest. The
veins were formed in two different systems. The east-west striking veins were
the first system developed, followed by a second system of north-northeast
striking veins. Veins pinch and swell and commonly exhibit bifurcation,
horse-tailing and sigmoidal structures. The veins vary from a fraction of a
centimetre in width to 15 metres, but average 1.5 metre. They have been followed
underground from a few metres in strike-length to more than 1,500 metres. An
example of a vein with mineralization in the Favourable Zone extending for more
than 2,000 metres in the Tayoltita Mine, the San Luis Vein, is illustrated
below.

Three
major stages of mineralization have been recognized in the district: 1) early
stage; 2) ore forming stage; and 3) late stage quartz. Three distinct sub-stages
of the ore forming stage also have been identified, each characterized by
distinctive mineral assemblages with ore grade mineralization always occurring
in the three sub-stages: 1) quartz-chlorite-adularia; 2) quartz-rhodonite; and
3) quartz-calcite.

The
minerals characteristic of the ore forming stage are composed mainly of white,
to light grey, medium to coarse grained crystalline quartz with intergrowths of
base metal sulphides (sphalerite, chalcopyrite and galena) as well as pyrite,
argentite, polybasite, stromeyerite, native silver and electrum.

The
ore shoots within the veins have variable strike lengths (5 to 600 metre);
however, most average 150 metre in strike-length. Down-dip extensions of ore
shoots are up to 200 metre but are generally less than the strike length.

Drilling

Primero
conducts a continuous program of exploration/development diamond drilling
throughout the year at each of its mines with its own rigs. Twelve diamond drill
rigs and crews are employed in the mines, of which four are contracted.

Development
drilling in 2011 was focused in the Central Block and Sinaloa Graben areas. The
Central Block area is still expected to provide the majority of the ore at the
San Dimas Mine, with a small amount of higher-grade ore to come from the main
exploration area of Sinaloa Graben. Primero intends to construct additional
tunnels in 2011 to open new access routes to the main production and exploration
areas and increase operational flexibility.

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Sampling and Analysis

Other
than the control samples collected at the mill for material balance, two
principal types of samples are collected daily from the mine workings: (1)
samples of the mineralized zones exposed by the mine workings; and, (2) samples
of the diamond drill core from the exploration/development drilling.

Samples
are also collected, but on a less routine basis, from mine cars and from the
blasted rock pile in a stope. Individual samples collected from a mineral shoot
in certain veins can show considerable variation both vertically and
horizontally in the vein as observed by samples from subsequent slices of the
stope or from samples taken from the top of the pile of blasted rock in the
stope compared to the samples from the back. Grade control in these veins is
achieved in part by the considerable number of samples taken.

Drill
core samples, after being sawn in half, are bagged, tagged and sent to the mine
assay laboratory. Several hundreds of samples are collected and processed every
month at the mine assay laboratory. Several hundreds of samples are collected
and processed every month at the mine assay laboratories.

At
each of the mines, the mine workings are sampled under the direction of the
Geological Department initially across the vein, at 1.5 metre intervals. Splits
are also taken along the sample line to reflect geological changes. No sample
length is greater than 1.5 metres. Once the ore block has been outlined and the
mining of the block begins, the sample line spacing may be increased to 3.0
metres. Sampling is done by a chip-channel, cut across the vein. Sample chips of
similar size are collected on a canvas sheet then broken into smaller sized
fragments, coned and quartered to produce a 1 to 2 kilogram sample, which is
sent for fire assay at the mine assay laboratory. Sample intervals are clearly
marked on the underground workings with spray paint.

Samples
are crushed, homogenized, ground and split at the mine assay laboratory to
produce a 10 gram representative pulp sample for fire assaying. Routine quality
control is carried out with every tenth sample repeated as a check assay done
between the mine assay laboratory, and check assays at SGS laboratories in
Durango. Routine assaying of standards is also carried out at the mine assay
laboratory.

Security of Samples

The
procedures used by Primeros assay laboratories are those originally introduced
by the former American mine owners. Certain steps have through time become
somewhat slack and could be improved, perhaps through more rolling of the pulp
sample for improved homogenization, better control of dust and rock chips in the
crushing-grinding area.

In
order to monitor the quality of the assay results of the Tayoltita mine
laboratory, Primero every three months sends a series of blanks, standard and
duplicate samples to the commercial laboratory SGS in Durango Mexico. A total of
728 samples were sent for comparative analysis in 2010.

The Tayoltita results, particularly during the first and fourth quarters of 2010
showed differences of some concern of the assay results with those of the SGS
laboratory and particularly those of the gold assay results of the blank and
standard samples. These differences could be due to the weighing of the sample;
the method of analysis; a human error; or contamination of the sample at the
start of the assaying process; or a combination of them.

WGM
noted during the visit to the Tayoltita laboratory that the Primary Crusher was
contained in the same room as that of the further processing (grinding and
splitting etc.) and WGM suggested that the dust from the Primary Crusher might
be contaminating the sample and the cause of the differences. Primero plans to
relocate and separate the Primary Crusher from the grinding of the samples.

WGM
recommends that Primero continue and closely monitor the program of sending the
samples to the SGS laboratory to ensure the quality of the Tayoltita assaying is
neither over nor under estimate the mineral reserves. WGM believes, however,
that the sample preparation, analysis and security process is without any
serious problems.

Mineral Reserve and Mineral Resource Estimates

See
Description of the Business  Technical Information  Summary of Mineral
Reserves and Mineral Resources for the estimated Mineral Reserves and Mineral
Resources for the San Dimas Mines as of December 31, 2010.

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Mining Operations

The
mines of Primero in the San Dimas district consist of three underground gold and
silver mining operations at Tayoltita, San Antonio (Central Block) and Santa
Rita. With the current and near term mine plans, the Central Block is scheduled
to provide the San Dimas mine production. Production is programmed to come from
10 veins (35 stopes) in the Central Block. With completion of the San Luis
Tunnel, development of the Central Block has evolved to connect with the San
Antonio mining area. This mining area is characterized by veins that dip 75°
with variable widths and is currently being developed as an important mining
area for San Dimas. The typical mining operations employ mechanized cut-and-fill
mining using load, haul and dump equipment. Primary access is provided by adits
and internal ramps from an extensive tunnel system through the steep mountainous
terrain. All milling operations are now carried out at a central milling
facility at Tayoltita which has a capacity of 2,100 tonnes per day. The ore
processing is by conventional cyanidation followed by zinc precipitation of the
gold and silver followed by refining to doré.

The
San Antonio Mill operation was put into care and maintenance in November 2003
with all milling consolidated to the Tayoltita Mill and all former San Antonio
mine production considered part of the Central Block Mine operation. In 2010,
the mill averaged 1,806 tonnes per day (339 days of operations).

The Tayoltita mill presently employs two-stage crushing and two ball mills (3.7
metres x 4.3 metres) that can operate simultaneously or separately to achieve
70% to 75% passing 200 mesh. Leaching is completed in a series of tanks
providing 72 hours of leach residence time. The pregnant solution is recovered
in a counter current decant (CCD) circuit with the gold and silver recovered
from solution in a zinc precipitation circuit. Two pumping systems have been
installed to transport the high density tailings (53% solids) slurry to a box
canyon 1,847 metre east and up 125 metre from the mill site for permanent
disposal. Refining uses an induction furnace to produce 1,000 oz gold and silver
doré bars (average 98% pure).

The Tayoltita Mill has undergone a series of plant expansions over its operating
life which has resulted in two small ball mills in parallel as well as a series
of small tanks in the leaching and CCD circuit. An expansion at Tayoltita in
2003 increased the nominal capacity to 2,350 tonne per day to replace the
capacity required for shutdown of the San Antonio Mill. This expansion included
a new cone crusher and dust collection/system and the installation of a 1,000
horsepower ball mill providing two stage grinding and the Putzmeister tailings
pump. The expansion retrofitted a number of existing tanks for higher capacity
for solid liquid separation. As well, the expansion included more automation,
process controls and a general upgrade of the plant power distribution / control
system.

Las Truchas Hydro Generating Power Plant/Line

The
construction of the Las Truchas hydro generated power line that began in 2005
and were completed in 2008. This 34 kilovolt ampere power line from Las Truchas
Dam, 42 kilometre north of the San Dimas Mine, has expanded the former available
power from 1.4 megawatt to 7.0 megawatt (Stage 1) and reduced power costs from
11 cents per kilowatt hour to 1.5 cents per kilowatt hour. More than US$33.0
million has been invested since 2005 (US$20.9 million in 2007) to complete Stage
1. Stage 1 involved both the relocation of the town at the dam site and the
construction of a new power house. Primero intends to proceed with Stage II to
provide an additional 7 megawatt to further reduce operating costs at the mine.
The face of the dam will be increased by Primero to increase storage capacity to
maintain power production during the dry season.

During
2010 some of the parameters in the operation of the hydroelectric facility were
determined to justify the viability of a second stage. Also during 2010 it was
possible to exercise the important option to interconnect with the local power
grid (CFE) through the improvement of the main substation at Tayoltita that will
allow in 2011 to form a buy/sell contract for the surplus energy to the district
network.

Tayoltita Tailings

The
very rugged mountainous terrain and steep walled canyons in the San Dimas
district have presented formidable challenges to tailings management as the
scale of operations grew and storage areas were depleted. The Tayoltita
operation has developed numerous tailings disposal sites in the valley near the
mill and in more recent years, the tailings dam has been moved up the valley to
the east of the mill. At that time the operation relied on 10 pumping stations
to elevate the tailings to the containment site. The operation included the
tailings line and solution return line on cable supports to cross the river
valley without any provisions for spill containment in the event of a line
failure.

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The
historical construction practice has been to gradually build containment basins
on the steep hillsides using thickened tailings while continuously decanting the
solutions for recycle to the mill. On abandonment, the dried tailings were left
to dehydrate and efforts to establish a natural vegetation cover have been
undertaken. The abandoned dams in the area are subject to erosion and
instability until remediation measures are taken. On three of the older tailings
dams near the Tayoltita mill, the land has been reclaimed for use as a soccer
field, a softball field, and a garden nursery.

Monitoring
of the Piaxtla River downstream of the Tayoltita tailings deposits has not shown
any environmental impact on the water quality, but it may be impacted with
higher suspended solids in periods of heavy rainfall. Under the current San
Dimas plan, the Tayoltita Mill operation and future expansion will process all
ore mined in the district with all tailings deposited in the currently active
Cupias tailings disposal dam. Since significant capital improvements have been
made at the Tayoltita tailings operation and further improvements to the dam and
operating practices are planned.

During
2007, stages II and III of the AMEC (a geotechnical consulting company, based in
Vancouver) remediation of the Tayoltita tailings dam were completed with the
reinforcement of the dam bank with the compaction of 621,800 cubic metre of
borrowed material. The 10 relay tailings pumping stations were replaced with
three positive displacement pumps operating in parallel and a new tailings
pumping system installed with the capacity to pump high density tailings (53%
solids) a distance of 1,847 metre and up a 125 metre difference in elevation to
the dam. High capacity thickeners have been added to the mill to increase the
tailings density and reduce the solution containment, hydrostatic heads, and
return capacity required at the tailings dam. At the river crossing, the
tailings lines are suspended in a spill recovery trough with provision to divert
any spills into a containment area.

Construction
of the initial phase of an earthen berm against the downstream side of the dam
had been completed to increase the safety factor of the containment structure.
During the past year, the most important works were the construction of two
basins in the back of the dam with a 50,000 cubic metre capacity to collect and
neutralize the contact water (the water that falls on the dam) that could
contaminate the dry tailings deposited and a second basin (in series with the
previous basin) in case that the first basins capacity is exceeded. A perimeter
wire fence was also constructed around the tailings dam area to neutralize the
contact water dam area to limit the access by persons and animals. The project
includes the construction of a seepage drainage and collection channel below the
dam.

During
2007, stages II and III of the remediation recommendations by AMEC (Canadian
consultant) were completed and the storage capacity at a mill rate of 2,500
tonne per day is more than 30 years.

During
2010 the installation of the third filter band (113 metre) at Cupias was started
to guarantee that 100% of the tailings coming from the beneficiating plant
(mill) could be processed. At the end of 2010 the project had advanced with 50%
of the project completed and with the advantage that the filter had arrived in
the customs house and the major critical components were already in Tayoltita
(vacuum pump belt etc.). Primero plans to terminate the third filter house by
April 2011 at a total investment of US$2.27 million.

San Antonio Tailings

Due
primarily to the exhausted capacity of the tailings dam, the San Antonio Mill
operation was shutdown in 2003. The tailings dam site is located in a turn in a
steep walled river canyon downstream of the mill operation. The river has been
diverted through two tunnels which have been excavated in the canyon wall on the
inside of the river bend. A third tunnel for road access has been excavated and
also serves as an additional channel for the river in high flow periods. In the
2002 due diligence by Wheaton River, the San Antonio tailings dam was identified
as a risk to failure due to a low safety factor in the dam, risk associated with
an unknown hydrostatic head in the active tailings deposition area, and possible
erosion due to a flood event in the adjacent river.

Since
the shutdown of the mill operations, some of the risk has been removed by
elimination of the hydrostatic head in the dam and diversion of a local drainage
channel. It has been proposed that the dam safety factor be increased by
extending the concrete wall on the upstream side of the dam and protection of
the downstream side by covering with mine waste rock. These measures would also
decrease the erosion potential of the tailings. Some of this work has been
initiated while options to close and reclaim the tailings dam were studied. DMSL
received approval to reclaim the San Antonio dam by stabilizing the tailings in
their current location after the submittal of an environmental assessment that
demonstrated the validity of the plan. A scale model was developed that through
a series of tests determined the best design from the hydraulic aspect and to
determine if some of the design features needed to be augmented. During 2007, in
agreement with the design by Knight Piesold (Canadian geotechnical consultant),
the emplacement of rock filled berm began with about 60% completed, however the
rains and lack of an access road significantly affected progress.

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During
2008, the works were completed with a cover of compacted concrete on the dam
face that will form a three step waterfall in the case of a maximum flow of
water (rainfall). The present hydraulic dam design was confirmed during 2008
through a series of tests.

Presently
the dam is in a monitoring phase to determine if existing tailings displacements
can physically affect the concrete. To-date some vertical displacement (settling
of the material) during the rainy season has been detected. It is anticipated
that this monitoring would require about six months.

Capital
expenditures for environmental purposes since totaled approximately US$10.7
million at Tayoltita/Cupias and US$9.6 million at San Antonio. In 2010,
approximately $1.5 million was spent installing a third tailings filter. The
full project costs $2.3 million and was 65% complete at December 31, 2010.

Capital
expenditures on the remediation of the San Antonio tailings dam since 2005 has totalled approximately US$9.6 million at the end of 2008. Due to problems with
the landowners ("ejido") it was not possible to advance very much with this
project, one was able to prepare the aggregate material that will be used on the
water dam below (based on the Hermosillo Sonora engineering study titled "Basic
Engineering Studies"). Primero plans to complete this project during the first
six months of 2011. The only remaining items to complete are the concrete
covering of the dam and the construction of a diversion channel.

Environment

At
the time of Goldcorps acquisition of the San Dimas operations (through a
predecessor company, Wheaton River Minerals Corporation), the practice in the
design and operation of tailings containment sites in the San Dimas district
complied with the requirements of Mexico and with the permits issued for the
dams. To bring the facilities to international guidelines, a series of
improvements were identified as necessary to reduce risk as well as the
potential environmental impact. Since the acquisition by Goldcorp in 2002, a
number of improvements have been made and extensive work is ongoing to further
improve the standard of the tailings operation.

Goldcorps
practice had been to discharge tailings from the cyanidation mills to unlined
structures designed to settle the solids and collect solutions for recycle to
the milling operations. The containment dams were typically constructed with
cyclone underflow, and the overflow drains to decant structures in the central
portion of the dam. Previously the tailings containment sites had not been
subjected to comprehensive geotechnical investigations before construction,
normal safety factors in dam design nor monitoring or control of seepage.

The
deficiencies with the tailings management aspect of the operations were
addressed by Goldcorp and capital investments were made to upgrade the
containment structures and tailings operations to bring them more in line with
accepted practice. Capital expenditures for environmental purposes since 2004
have totalled approximately US$10.7 million at Tayoltita/Cupias and US$9.6
million at San Antonio. In 2005, US$1.3 million was spent on the San Antonio
tailings, and US$2.2 million in 2006 and US$1.6 million in 2007. Investment in
the Tayoltita tailings dam in 2005 was US$1.6 million, US$0.6 million in 2006
and US$3.2 million in 2007.

Environmental
requirements in Mexico can be expected to become more aligned with world
standards in the future. The planned capital expenditures and changes to upgrade
the San Dimas tailings management operations are expected to continue to comply
with the operating standards required in Mexico, and to ultimately achieve
compliance with international guidelines.

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Production Information

The
following table summarizes 2008 to 2011 silver production from the San Dimas
Mines:

Units
      2008
      2009
      2010
      2011Ore Processed
    (tonne)
    657,479
    673,311
    612,253
    662,612Gold Grade
    (g/t)
    4.3
    5.4
    4.5
    3.9Silver Grade
    (g/t)
    259
    249
    244
    226Gold Recovery
    (%)
    97
    98
    97
    97Silver Recovery
    (%)
    94
    95
    94
    96Produced Gold
    (oz)
    86,682
    113,018
    85,429
    79,564Produced Silver
    (oz)
    5,113,466
    5,093,385
    4,530,000
    4,602,846


YAULIYACU MINE, PERÚ

Neil
Burns, Vice President Technical Services of the Company, and Samuel Mah,
Director of Engineering of the Company, prepared the technical report in
accordance with NI 43-101 entitled 2010 Resource and Reserve Update, Yauliyacu
Mine, Perú dated March 30, 2011 (the Yauliyacu Report). Neil Burns and Samuel
Mah are each qualified persons within the meaning of NI 43-101.

The
following description of the Yauliyacu Mine has been summarized from the
Yauliyacu Report and readers should consult this report to obtain further
particulars regarding the Yauliyacu Mine. The Yauliyacu Report is available for
review on the SEDAR website located at www.sedar.com under the Companys
profile.

Since
mid 2009, concentrate shipments from the Yauliyacu mine have been affected by
the shut-down of the Doe Run Peru La Oroya smelter, the largest buyer of the
bulk concentrate produced at the mine. Since that time, alternative smelting
arrangements have been made by Glencore for a portion of the stockpiled bulk
concentrates at Yauliyacu, leading to an inconsistent delivery schedule and
delaying the eventual complete reduction of this bulk concentrate. In the second
quarter of 2011, Glencore began producing separate, and more marketable, copper
and lead concentrates, replacing the bulk concentrate. The consistency and
quantity of these new concentrates has now stabilized, with more consistent
silver deliveries to Silver Wheaton from the copper concentrates expected in
future quarters. Discussions between Glencore and prospective offtakers for the
new lead concentrates are ongoing, and until such offtake agreements are
established, sales of lead concentrates will continue to have an inconsistent
delivery schedule.

Project Description and Location

The Yauliyacu Mine is located at latitude 11°38S and longitude 76°14N at an
elevation of 4,250 metres above sea level in the District of Chicla, Huarochiri
Province in the Department of Lima. The mining concessions of the silver
agreement consist of 21 surveyed concessions totaling 14,194 hectares.

The Yauliyacu Mine is a well developed mine with the complete infrastructure typical
of an operating mine consisting of process plant, mine offices, various repair
shops, an assaying laboratory, living quarters, dining facilities, medical
centre, etc. The mine operates year round and has been in operation more than
100 years. The underground mine is developed on 26 levels, the lowest level is
the 3900 level located at 3,649 metres above sea level. There are four principal
levels above the 3900 level: levels 2700; 1700 (where the mine offices,
concentrator, main horizontal access and ore extraction are located); 800, and
200. The levels between these principal levels are unevenly spaced with an
average distance of approximately 60 metres.

The Graton Tunnel, built by the Cerro de Pasco Mining Company, extends from the Rio
Rimac for 11.5 kilometres under the Yauliyacu Mine. The tunnel is connected to
the mine above to assist in drainage and ventilation.

Accessibility, Climate, Local Resources, Infrastructure
and Physiography

The Yauliyacu Mine is accessible by paved road approximately 2.5 hours from the
capital city of Lima, along the central highway (Carretera Central) that runs
east from Lima to the mine and continues up and over the Andean Cordillera into
the Peruvian jungle. The central highway runs parallel to the valley of the Rio
Rimac, as does a railroad that was built to service the La Oroya smelter and the
Cerro de Pasco mines. Numerous daily, worldwide flights to and from various
countries arrive at Limas International Airport. Access to the mine is also
possible from Callao, the port city of Lima located 10 kilometres northwest from
the centre of Lima, on the Pacific coast.

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The
western slopes of the Andes, in Central Peru, present strong topographic and
climatic contrasts. Along the continental divide, the snow covered peaks (above
4,500 metres above sea level) present a frigid to glacial climate, while areas
between 4,000 to 4,500 metres (altiplano) exhibit cold (boreal) climates. In the
valleys below 4,000 metres above sea level, the climates vary from temperate to
hot in the deep valleys near the coast. The snow capped peaks and altiplano
areas show a marked variation in temperature between day and night, while in the
valleys the temperature variations are more moderate. In general, the average
temperature varies between 6 degrees Celsius and 16 degrees Celsius from the
peaks to the coast. The mine property at 4,200 metres above sea level exhibits a
cold climate during the dry season, May to November with below freezing
night-time temperatures. During the wet season the temperature is more
temperate, the highest temperatures being recorded in November and December.

The
rainy season corresponds to the austral summer, with maximum precipitation
occurring between the months of December to April, characterized by abundant
rainfall between elevations of 2,500 to 3,900 metres above sea level. Above
3,900 metres above sea level, the precipitation is in the form of snow and hail.
Often the rainfall is accompanied by electrical storms. The dry period
corresponds to the months of May through November, although occasional
precipitation does occur during this period in the altiplano and along the
continental divide. Virtually no rainfall occurs between June to August, which
are also the coldest months.

The
property area is sparsely inhabited by predominantly experienced miners.
Inhabitants located along the valleys are engaged in the raising of livestock
and in agriculture, typically cultivating potatoes, beans, corn and wheat along
the river margins using irrigation canals along the adjacent valley walls. The
major agricultural production comes from the cultivated terraces along the sides
of the rivers.

Vegetation
in the area is intimately related to the climate and elevation. In the Altiplano, agriculture disappears and natural pastures exist for grazing sheep,
cows and llamas. Occasional small forests can be found at the heads of the
valleys.

Water
in the major valleys flows year round, the product of glacial melts at the
headwaters, and is generally readily available. For example, the Rio Rimac flows
year round and is a major water source of the city of Lima. The water for
agriculture along the slope, however, is brought downstream from the rivers by a
series of far-reaching aqueducts.

A
high voltage power line, belonging to Electro-Andes S.A., provides power to the
mine. There are plans for the mine to participate in the building of a gas
turbine electrical generator that will be connected to electrical grid. This
will assure sufficient electrical power during low precipitation periods through
Perus hydroelectric power generators.

History

Mining
in the Casapalca district dates back to the early Spanish colonial period when
it was restricted to outcropping, or near surface veins. It is believed the
Spanish primarily recovered native silver from rich hydrothermal veins or from
the oxidized zones.

Modern
style mining began at the end of the 19th century in 1887 with Cia de
Minas Los Andes (of Backus and Johnston) on the Rayo vein. Cia Backus and
Johnston started the exploration, development and exploitation of several of the
mineralized structures in the Casapalca district (Carlos Francisco, Carmen,
Bella Union and Aguas Calientes).

In
1921, Cerro de Pasco Corp. (CPC) acquired the Casapalca mine and most of the
mining permits and licenses. The current Yauliyacu permits and licenses are from
these original land holdings. CPC also built the Graton tunnel.

In
January 1974, Centromin Peru (Centromin), a state owned company gained ownership
of the Casapalca mining district and through development and selective mining on
a mass-scale increased production to 64,000 tonnes per month. In 1997, Empresa
Mineral Yauliyacu SA, whose largest shareholder is Quenuales International,
purchased the mine. In the purchase deal agreement, the Casapalca mining
district was split into two mining areas, the Yauliyacu and Casapalca mines. The
Casapalca mine is now owned by Cia. Minera Casapalca S.A., a privately owned
company. Although both mines are connected underground, Casapalca operates from its
own separate accesses.

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In
1998, Yauliyacu implemented a radical improvement action plan and increased the
production to 90,000 tonnes per month. New orebodies were delineated that were
amenable to more bulk mining methods such as sub-level stoping.

The
geology of the Casapalca area was first mapped in 1928 by H.E. McKinsey and J.A.
Noble. In 1932, their publication "Veins of Casapalca" outlined the general
structures and mineralization of the district. There has been a series of
studies on the deposit between 1960 to 1980 including those of Sawkins (1974)
and Alverez (1980) whose studies concentrated on fluid inclusions and metal
zoning.

Geological Setting

The
regional geological setting of the western side of the Andean Cordillera of
central Peru is an area of deep valleys with steep slopes, and elevations
varying from 800 metres above sea level on the west side, to more than 5,400
metres above sea level on the east side at the continental divide. The
development of the geomorphology occurred in the Cenozoic and gave rise to the
following units:

- Dissected western Andean slopes
- Zone of the altiplano
- Remnants of the Puna plain
- Valleys and the zones of the high peaks

The stratigraphic sequence includes rock units from the Paleozoic up to present on
the eastern side of the continental divide, and from the Mesozoic on the western
side. The oldest rocks are exposed in the centre of the Yauli dome and are those
of the Excelsior Group, a pelitic sequence regionally metamorphosed by the
Hercinian tectonic disturbance (upper Devonian). Overlying discordantly is a
volcanoclastic series represented by the Mitu Group, the result of intensive
erosion at the end of the Hercinian event. As a result of the Hercinian orogeny,
a zone was uplifted and basins were formed on the east and west flanks. These
basins lasted until Albian times (lower Cretaceous).

Mesozoic
sedimentation began with a marine transgression, represented in the east by the limestones of the Pucará Group. During lower Cretaceous there were two principal
facies being accumulated: 1) the western basin, represented by the Formations
Chimú, Santa, Carhuaz and Farrat, mainly sandstones and limestones; and 2) the
eastern basin, represented by the Goyllarisquizga Group of sandstones-quartzites
and interbedded shales.

During
the Lower Cretaceous (Albiano), a general marine transgression occurred, caused
by the sinking of the basin, which gave rise to deposition in both basins. This
deposition consisted of calcareous sequences comprised of the Pariahuanca,
Chúlec, Pariatambo, Jumasha and Celendin Formations. At the same period in the
most western part of the basin volcanics interbedded with sediments (Quilmaná
Group) were deposited. At the end of the Cretaceous and start of the Tertiary
during uplift of the Andean mountains, emplacement of large plutonic bodies took
place (coastal batholiths). In the eastern sector, deposition of a molasse
sequence (Casapalca Formation) resulted from erosion of the uplifted Andean
mountains.

Deformation
took place in the Eocene (Incaica phase) in the form of folding of the Mesozoic
sequence (including the red beds of the Casapalca Formation).

In
its final stage, the tectonic event produced magmatic extrusives that covered
the area. Volcanic ashes and lava flows were interbedded with the continental
sediments, represented by the Rímac and Colqui Groups (western basin), and
volcanics of the Carlos Francisco, Bellavista and Rio Blanco Formations to the
east.

The
tectonic activity at the end of the Oligocene folded these units and generated
new faults that followed the pre-existing structural model. The region was
subsequently overlain by a volcanic-sedimentary sequence (Millotingo), which was
later affected by the Quichuana tectonic phase which resulted in explosive
volcanism of the Huarochirí Formation.

Near
the end of the Quichuana tectonic phase (between the Miocene-Pliocene), a centre
of explosive eruptions and lava flows occurred, which marked the end of the
Andean deformation cycle and start of the orogeny that produced the Puna
surface. The Puna surface was gradually uplifted to 4,000 metres above sea level
(Pliocene-Pleistocene) by a system of gravitational (horst-type) faults.

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Cenozoic
structural development occurred in the form of faulting, folding and emplacement
of plutonic and hypabyssal bodies. Mineralizing solutions, related to the
magmatism that followed the Miocene deformation, were introduced probably before
the deformation of the Lower Pliocene.

Many
of the mineral deposits were emplaced in Tertiary volcanic rocks as fracture
infillings by hydrothermal solutions.

Fluvial
and glacial erosion intensified with uplift during Pliocene-Pleistocene,
resulting in deeply incised valleys. The present morphology of the Andes is
closely related to the stages of glacial erosion.

Property
geology is underlain by a series of Tertiary age bedded rocks that consist
principally of sandstones, calcareous shales, limestone, breccias, tuffs and
lavas (approximately 5,400 metres thick).

The stratigraphy is exposed in a series of anticlines and synclines that are part of
the Casapalca Anticlinorium. This axis of this principal structure strikes
N20°W, generally paralleling the Andes mountains.

The Yauliyacu deposit is described as a hydrothermal polymetallic vein type deposit,
believed to result from circulating hydrothermal fluids. These fluids extracted,
transported and then precipitated sulphide minerals into open space fillings and
replacement bodies. Chloride-rich brines and recirculating meteoric waters
interacted to produce the ore fluids. Sulphides precipitated as a result of
decreased pressure and temperature, reaction with the wallrock, or a mixing of
fluids. The origin of the metals is thought to be either magmatic or dissolved
from the country rocks.

Exploration

Throughout
the mine life at Yauliyacu, the focus of exploration has been the continued
expansion of mineralized zones (Vetas, Cuerpos, and Horizontes) within the
mining lease. Over the years the mine has been extremely successful at replacing
production, as well as expanding resources and reserves.

The
majority of exploration at Yauliyacu takes place within the mine due to the
rugged terrain and current depth of mining and mineralization. However, surface
trenching is an important tool in locating new veins and the upper extensions of
veins defined at depth. The main forms of underground exploration are drilling
and development.

Exploration
at depth remains a priority and with success will result in the deepening of the
Pique Central shaft down to the Graton Tunnel level. The Ricardito Tunnel has
been slashed (4.5 metres x 4.0 metres) to allow access for the larger mining
equipment. The enlarged tunnel has improved ventilation and productivity in the
lower mine.

Mineralization

The Yauliyacu deposit is described as a hydrothermal polymetallic vein type deposit,
believed to result from circulating hydrothermal fluids that extracted,
transported and then precipitated the sulphide minerals into open space fillings
and as replacement bodies. Chloride-rich brines and recirculating meteoric
waters interacted to produce the ore fluids which as a result of decreasing
pressure and temperature and reactions with the wall rock or by mixing of the
fluids precipitated the sulphides. The origin of the metals is thought to be
either magmatic or from the interaction of the fluids with the country rocks
accumulating the metals. Characteristic of this type of deposit is the problem
of the continuity of the mineralization and the mineralogical variations along
the vein system. As the hydrothermal fluids precipitate the sulphides resulting
in changes to the chemical composition of the fluids, this produces a
continually varying chemical and mineralogical deposition along the vein.

The
mineralization of the Casapalca occurs in two forms as hydrothermal polymetallic
veins (Vetas) and as disseminated orebodies (Cuerpos). The veins are known to be
up to five kilometres of which four kilometres have been exposed underground.
Typically the veins are 0.3 to 1.2 metres in width with a known vertical range
of over two kilometres. Strike slip faulting, prior to the mineralization event,
has controlled the vein structures with the formation of duplexes.

In
  the veins, the ore forming minerals are mainly sphalerite, galena, tetrahedrite,
  tennantite and chalcopyrite. The typical gangue minerals are pyrite, quartz,
  calcite, rhodocrosite, dolomite, sericite and manganiferous calcite.

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Drilling

As
in most underground mines, diamond drilling is vital to the continued operation
of Yauliyacu. Limited resources and reserves can be drilled at a time, due to
access constraints within the underground development. Thus, a focused annual
drilling program is required.

The
majority of underground drilling uses BQ size core. When large underground
openings are encountered, the void is cased with NQ and the hole is continued
with BQ. Deep holes from either surface or underground typically begin with HQ
and reduce down to NQ.

Sampling and Analysis

The
two main sampling methods at Yauliyacu are diamond drill core and underground
channel sampling. All core designated for sampling is cut with a diamond blade
saw and flushed with fresh water. The core is cut so that it approximately
halves the mineralization. If mineralization is not homogenous a geologist marks
a cutting line directly on the core. One half is selected for analytical
analyses and the remainder is archived in the core box. All core are considered
to be representative of the mineralization that was drilled. Channel samples are
collected by the Geology Department using hammer and chisel perpendicular to the
veins on 1.0 to 2.0 metre intervals with samples varying in length from 0.1 to
1.0 metre with a minimum weight of 3.0 kilograms. Locations are marked using
spray paint. Sample intervals are chosen to preserve changes in lithology and
mineralization intensity. Where possible additional samples are taken into the
adjacent host rock so that the economic limits of the mineralization can be
properly defined. Care is taken to ensure that the sulphides and host rocks are
representatively sampled since the host rocks tend to be much harder than the
sulphides.

The
sample preparation laboratory is located within the mine site analytical
laboratory building. Separate areas exist for the preparation of Mine and
Process Plant samples. Sample preparation equipment consists of drying ovens,
jaw crushers, roller crusher, Rocklabs pulverizers, riffle splitters, vent hoods
and a climate controlled balance room. Sieve tests are done regularly to ensure
the desired reductions are obtained. Machines are cleaned with compressed air
after each sample and quartz is regularly passed to ensure cross contamination
does not occur.

All Yauliyacu samples are analyzed at the mine site analytical laboratory. The
following two methods of analysis are routinely done: 1) Fire Assay (FA) for
gold and silver and 2) Atomic Absorption Spectrometer (AAS) for zinc, lead,
copper, silver and iron. Due to its high altitude location, the balance room is
temperature and humidity controlled to ensure precision.

The
laboratory is planning to purchase an X-ray fluorescence (XRF) machine during
2011. XRF analyses is a widely used physical method that has advantages over
atomic absorption as it does not have difficulties related to small sample size,
incomplete dissolution, matrix effects and sample in homogeneity. XRF allows for
the analyses of a greater number of elements than is currently possible with the
AAS equipment. XRF has higher detection limits, which will result in less Fire
Assaying for gold and silver.

The
analytical laboratory obtained ISO 9001 certification in December 2009 and was
re-certified in December 2010.

The Yauliyacu laboratory has its own independent QA/QC system consisting of the
following types of check analysis:

- Duplicates -every 10th sample
- Standard Reference Material (Standards) -every 5th sample for FA and every
  25th wet sample analyses
- Blanks every 50th sample
- External analyses beginning in 2011, 10  15 randomly selected samples
  will be sent to external laboratories for comparative analyses

Security of Samples

The
following data security procedures are in place at Yauliyacu:

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- Samples sent from the core shack and received at the laboratory are both
  documented.
- Traceability records prevent errors in identification and ensure the
  sample history can be followed as part of the analytical chain of custody.
- All records and reports are archived.
- Rejects and pulps are archived in case a new analysis is required.
- The balances and climate monitoring systems are certified annually by an
  external group. The two AAS machines are certified twice a year.
- Analytical results are digitally transferred to a secure database to
  prevent data entry errors and tampering.
- The laboratory has implemented a computer system for tracking the samples
  through the analyses steps. This system is very secure and also has the
  benefit of automatically shuffling the position of the QA/QC samples and the
  specific Standards used.
- In 2011, the laboratory is scheduled to implement Thermo Fishers
  Laboratory Information Management Systems (LIMS) which provides control of
  processes with rigorous testing and real-time monitoring. This software system
  will include bar code sample ticketing which will eliminate the potential for
  sample swapping through each of the sampling, preparation and analytical
  stages. Glencore plans to implement the LIMS system at all of its South
  American operations.

Mineral Reserve and Mineral Resource Estimates

See
Description of the Business  Technical Information  Summary of Mineral
Reserves and Mineral Resources for the estimated Mineral Reserves and Mineral
Resources for the Yauliyacu Mine as of June 30, 2011.

Mining Operations

The
underground mine is accessed from several adits located at various elevations.
Currently, the mine is divided into five operating Sections over the 26 levels.
In general, the levels are spaced approximately 60 metres apart. The primary
access is the 1700 level, which is also where all the production exits the mine
using an electric rail haulage system. Active mining at elevations below this
horizon use mobile equipment to transport the ore to an internal winze system
(Pique Central - vertical shaft from 3900 to 1700 level, Pique Aguas Calientes 
inclined shaft from 3900 to 2100 level). A network of internal raises has been
developed to handle the ore and / or waste generated in the upper mine (above
1700 level). Loading chutes installed at the bottom of these raises are pulled
to load directly onto the rail cars for transport out of the mine.

At Yauliyacu, four mining methods are employed to extract the three ore body types
(Vetas, Cuerpos, Horizontes). These include modern mechanized mining methods
using trackless equipment wherever possible (cut and fill, sub-level open
stoping) and other more selective captive techniques using hand-held equipment
(shrinkage, narrow vein open stoping).

To
meet the production capacity and provide sufficient flexibility, the operation
strives to maintain in the order of 40 active stopes for production (18 Cuerpos,
22 Vetas). Development headings in ore are approximately 20 (10 Cuerpos, 10
Vetas).

Modern
mine planning utilizes both Datamine and AutoCad to support production and mine
development scheduling.

Mining Method

Depending
on the continuity, dip and width of a mining block, an appropriate mining method
is assigned that will optimally extract the ore.

Conventional
cut and fill mining techniques are utilized for its selectivity in poor to fair
ground conditions with a Rockmass Rating (RMR) > 45. In Vetas, the narrow
widths restrict the type of equipment to hand-held and small scale pneumatics.
As mining widths allow (Cuerpos), micro-scoops can be used to improve on stope
productivities. Ground support is limited to timber supports as there is
generally not enough room to install rock bolts. The minimum mining block dip is
50°, which limit the amount of dilution taken for 2.1 metre cut heights. Access
to each cut is generally from the footwall side.

Shrinkage stoping provides the advantage of selectivity, but is only applicable in fair to
good ground conditions (RMR > 60). Stopes are mined from bottom up taking
horizontal slices (1.5 metre cut height) while working off the broken blast
muck. Only the swell material can be recovered from each blast so a high level
of control must be exercised to keep the working elevation relatively even. A
series of boxholes are established on the bottom horizon to control the amount
of broken muck that can be pulled. The minimum mining block dip is 60° to ensure
gravity feed.

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Open stopes are established similarly to the shrinkage stopes with the exception that
the majority of the broken ore is recovered from each blast. Workers prepare to
take blasts while working on elevated wooden platforms wedged between
hangingwall and footwall. Ground conditions are necessarily good to ensure the
workers are safe while working at the face. Mining is accomplished with only
hand-held pneumatic equipment. Access is gained from manways / ventilation
routes established on either side of the stope. A series of Chinese hoppers
are developed on the bottom horizon to control the amount of broken muck that
can be pulled.

For Vetas or Cuerpos that are wide (greater than 2.0 metres) and continuous,
sub-level stoping is a method that provides high productivity but low
selectivity. Stopes are established with 30 metre sub-level spacing to enable
drilling both uphole and downhole vertical rings. Blasting of 64 millimetres
diameter holes on a 1 metre x 1 metre pattern yields a high powder factor. In
general, ground conditions are considered to be fair (RMR > 55), which result
in stable openings. Once the stope has been mined out, backfill is placed if
waste is conveniently available.

Process Plant

The Yauliyacu Mine has been in operation for over 100 years with historical Process
Plant production records tabulated since 1920. In 1974, the mine became part of
a State owned mining company called Centromin. Over the next decade, production
grew incrementally from 1,500 tonnes per day to 2,500 tonnes per day. At the end
of the 1990s, the Mine and Process Plant were expanded to achieve 3,600 tonnes
per day. Glencore purchased the Yauliyacu operation in 1996 from Centromin.

Tailings
are pumped approximately 6.0 kilometres from the process plant at 4,210 metres
above sea level to the Chinchan tailings pond area at an approximate elevation
of 4,465 metres above sea level. The plan for 2011 is to process 1.32 million
tonnes at 1.00% lead, 2.32% zinc, 0.21% copper and 78 grams per tonne silver
grades.

The
Process Plant is capable of producing separate zinc, lead and copper
concentrates. However, only two concentrates (zinc and bulk concentrates) have
been produced since the second quarter of 2003, as the bulk concentrate received favourable smelter terms from the Doe Run smelter in La Oroya. The closure of
the Doe Run smelter in 2009 has lead to a planned May 2011 re-commissioning a
section of the Process Plant to separate the bulk concentrate into copper and
lead concentrates.

Environment

The Yauliyacu Mine has no issues with compliance of water quality (pH, metal
content, suspended solids) at its discharge points.

Construction
of a new water treatment plant (reverse osmosis circuit) was completed in 2010
to treat discharges from mine (1700 level), plant and tailings facility. The
mines management team are anticipating lower tolerance levels and stricter
regulations that will likely be enforced in coming years.

Testing
has been conducted on surface water run-off around waste dumps for potential
acid rock drainage (ARD) problems. All results to date indicate there is no
evidence of ARD issues. In general, the host rock contains low quantities of
sulphides (i.e. pyrite) and high quantities of carbonates.

Since
the installation of the Troncal #4 ventilation raise, there are no longer any
issues with noise levels at the mine.

Tailings Facility Management Plan

The Chinchan TSF currently has a capacity of four years production (until 2014),
which includes an additional five 5 meter lift. Technical studies are on-going
for an additional 20 meter lift (total dam height of 100 meters) that is
expected to increase capacity to 14 more years.

As
an alternative, Yauliyacu has completed a scoping-level review of the Tablachaca
tailings impoundment. Initial findings indicate the Chinchan TSF expansion is the preferred
option. Another possibility that requires further study is to consider
restarting the paste tailing plant for disposal underground.

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By
2011, the TSF option will be selected so that detailed engineering can begin in
2012. Construction for either option is expected to be approximately 12 months.

Closure and Reclamation Plan

Progressive
and passive reclamation is on-going at the mine. Buildings identified in the
closure plan and portions of waste dumps (H2, H3 and Jirca areas) are being
reclaimed concurrently with mine operations.

In
2010, several raises were capped on surface.

Production Information

The
following table summarizes 2008 to 2011 silver production only from the Yauliyacu Mine:

Units
      2008
      2009
      2010
      2011Ore Processed
    (000's)
    1,320
    1,283
    1,312
    1,284Zinc Grade
    (%)
    2.31
    2.29
    2.28
    2.29Lead Grade
    (%)
    0.91
    1.00
    0.91
    0.90Copper Grade
    (%)
    0.26
    0.23
    0.22
    0.23Silver Grade
    (g/t)
    84.4
    89.0
    75.6
    72.5Zinc Recovery
    (%)
    89.3
    86.0
    85.6
    86.5Lead Recovery
    (%)
    87.8
    84.1
    84.0
    80.6Copper Recovery
    (%)
    69.9
    70.4
    66.5
    62.2Silver Recovery
    (%)
    88.9
    85.6
    85.1
    85.1Produced Zinc
    (Mlbs)
    59.98
    55.70
    56.50
    56.14Produced Lead
    (Mlbs)
    23.30
    23.77
    22.10
    20.82Produced Copper
    (Mlbs)
    5.38
    4.66
    4.20
    2.77Produced Silver
    (Mozs)
    3.18
    3.14
    2.71
    2.55


PEÑASQUITO MINE, MEXICO

The Peñasquito Mine is indirectly wholly-owned by Goldcorp. The Peñasquito Mine is
an open pit mining operation located in north-central Mexico with two separate
process facilities, an oxide ore facility and a plant to process sulfide ore.
The oxide ore is processed through a heap leach/Merrill-Crowe facility that went
into production in February 2008. The first gold pour for the oxide circuit was
on May 10, 2008. Line 1 of the sulfide plant started operating in September 2009
and first concentrate was shipped November 2009. The Peñasquito Mine achieved
commercial production in September 2010.

Guillermo Pareja, P.Geo., Manager Resource Evaluation, Goldcorp, Peter Nahan, AusIMM.,
Senior Evaluation Engineer, Goldcorp, and Maryse Belanger, P.Geo., Vice
President, Technical Services, Goldcorp, prepared a technical report in
accordance with NI 43-101 entitled Goldcorp Inc., Peñasquito Polymetallic
Project, Zacatecas State, Mexico NI 43-101 Technical Report dated March 21,
2011 (the Peñasquito Report). Guillermo Pareja, Maryse Belanger and Peter
Nahan are qualified persons under NI 43-101. The following description of the
Peñasquito Mine has been summarized, in part, from the Peñasquito Report and
readers should consult the Peñasquito Report to obtain further particulars
regarding the Peñasquito Mine. The Peñasquito Report is available for review on
the SEDAR website located at www.sedar.com under the Corporations profile.

All
scientific or technical information in this summary relating to any updates to
the Peñasquito Mine since the date of the Peñasquito Report, other than the
Mineral Reserve and Mineral Resource estimates, has been approved by the authors of the Peñasquito Report.

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As
stated in Goldcorps press release dated January 9, 2012, both 50,000
tonne-per-day SAG lines are routinely operating at capacity at Peñasquito.
During the month of December, throughput reached an average of 107,000 tonnes
per day and reached a new daily processing record of 140,000 tonnes on December
26. The supplemental ore feed system to supply pebble feed to the 30,000
tonne-per-day high pressure grinding roll (HPGR) circuit will be completed
shortly and hauling of additional material to the tailings dam walls is now
complete. Ramp-up to full 130,000 tonne-per-day design throughput remains on
track for the end of the first quarter of 2012. With mining progressing deeper
into the heart of the sulphide ore body, higher grades and throughput rates are
expected to drive a significant production increase in the year ahead.

Property Description and Location

Goldcorp
owns through its indirectly wholly-owned subsidiaries, 100 percent of the
Peñasquito Mine. The operating entity for the Peñasquito Mine is a Goldcorp
subsidiary, Minera Peñasquito, S.A. de C.V. Peñasquito is situated in the
western half of the Concepción del Oro district in the northeast corner of
Zacatecas State, Mexico, approximately 200 kilometres northeast of the city of
Zacatecas.

The Peñasquito Mine is comprised of 130 exploitation concessions covering a total
area of approximately 122,534 hectares, which contains the Peñasco and Brecha
Azul (Chile Colorado) deposits. Concessions were granted for durations of 50
years. The Peñasco and Brecha Azul deposits are primarily within the Alfa, Beta,
La Peña, Las Peñas and El Peñasquito concessions. Obligations which arise from
the mining concessions include performance of assessment work, payment of mining
taxes and compliance with environmental laws. Duty payments for the concessions
have been made as required. Minimum expenditures, pursuant to Mexican
regulations, may be substituted for sales of minerals from the mine for an
equivalent amount.

Goldcorp
holds additional tenure in the greater Peñasquito Mine area (within about 200 to
300 kilometres of the Peñasquito Mine infrastructure), which is under
application, is granted, or is part of joint ventures with third parties. Two of
these wholly-owned deposits, Camino Rojo and Nocha Buena, are under conceptual
evaluation as potential stand-alone heap leach operations due to the low
precious metal grades of these deposits and may benefit from potential
administrative synergies with the Peñasquito Mine mining operation. However, the
deposits will not be developed as satellite operations for the Peñasquito Mine,
and are not considered to be part of the Peñasquito Mine.

A
two percent net smelter return royalty is payable to Royal Gold on production
from both the Chile Colorado and Peñasco locations. In 2007, Silver Wheaton
Corp. (Silver Wheaton) acquired 25 percent of the silver produced over the
life-of mine for an upfront cash payment of $485 million and a per ounce cash
payment of the lesser of $3.90 and the prevailing market price (an inflationary
adjustment to the contract price commenced in 2011 and resulted in a price of
$3.93 per ounce versus the original agreement of $3.90 per ounce), for silver
delivered under the contract.

Environmental
liabilities were limited to those that would be expected to be associated with
an open pit mine that is in the early production phases, and includes the open
pit, roads and site infrastructure, and waste and tailings disposal facilities.
A closure and reclamation plan has been prepared, and closure costs are
currently estimated at $28,812,334. Goldcorp holds the appropriate permits under
local, state and federal laws to allow for mining operations.

Accessibility, Climate, Local Resources, Infrastructure
and Physiography

The
site is accessed via a turnoff from Highway 54 approximately 25 kilometres south
of Concepción Del Oro. Within the Peñasquito Mine, access is by foot trails and
tracks. The closest rail link is 100 kilometres to the west. There is an airport
on site and airports in the cities of Zacatecas and Monterrey.

Power
is currently supplied through the Mexican central grid from the Mexican Federal
Electricity Commission. On January 25, 2011, Minera Peñasquito, S.A. de C.V.
signed a power delivery agreement (the Power Agreement) with a subsidiary of
InterGen, pursuant to which InterGen will construct and operate a 200 to 250
megawatt gas-fired combined cycle power plant near San Luis de la Paz,
Guanajuato, Mexico, to deliver electricity to the Peñasquito Mine for a minimum
term of 20 years, subject to regulatory and environment approvals. The
construction of the power plant is expected to be completed in 2014 and the
Peñasquito Mine has been sourcing power from another InterGen source in the
interim. Process and potable water for the Peñasquito Mine is sourced from a
water field located six kilometres west of the Peñasquito Mine. Permits to pump
up to 35 million cubic metres of this water per year have been received. The
Peñasquito Mine recycles approximately 80 percent of the water it uses in the mining
process.

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There
is sufficient suitable land available within the Peñasquito Mine for tailings
disposal, mine waste disposal, and mining-related infrastructure such as the
open pit, process plant, workshops and offices. A skilled labour force is
available in the region where the Peñasquito Mine is located and in the
surrounding mining areas of Mexico. Accommodation comprises a 2,000-bed camp
with full dining, laundry and recreational facilities.

Mining
concessions give the holder the right to mine within the concession boundary,
sell the mining product, dispose of waste material generated by mining
activities within the lease boundary, and have access easements. Surface rights
in the vicinity of the Chile Colorado and Peñasco Azul open pits are held by
private individuals and three ejidos. Signatures indicating agreement have been
obtained for all three of the ejidos and nearly all the private owners. Goldcorp
currently is in negotiations to finalize surface rights to minor land positions
still held by some private owners. Relations with the ejidos through the process
have been positive. Goldcorp holds sufficient surface rights in the Peñasquito
Mine area to support the mining operations, including provisions for access and
power lines.

The
climate is generally dry with precipitation being limited for the most part to a
rainy season in the months of June and July. Annual precipitation for the area
is approximately 700 millimetres, most of which falls in the rainy season.
Temperatures range between 20 degrees Celsius and 30 degrees Celsius in the
summer and zero degrees Celsius to 15 degrees Celsius in the winter. Mining
operations can be conducted year-round. The Peñasquito Mine area can be affected
by tropical storms and hurricanes which can result in short-term high
precipitation events.

The Peñasquito Mine is situated in a wide valley bounded to the north by the Sierra
El Mascaron and the south by the Sierra Las Bocas. Except for one small outcrop,
the area is covered by up to 30 metres of alluvium. The terrain is generally
flat, rolling hills; vegetation is mostly scrub, with cactus and coarse grasses.
The prevailing elevation of the property is approximately 1,900 metres above sea
level.

History

The
earliest recorded work in the Peñasquito Mine consists of excavation of a
shallow shaft and completion of two drill holes in the 1950s.

Kennecott
Canada Explorations Inc. through its Mexican subsidiary, Minera Kennecott S.A.
de C.V. (Kennecott) acquired initial title to the Peñasquito Mine and
commenced exploration in 1994. Regional geochemical and geophysical surveys were
undertaken in the period 1994 to 1997. This work led to the early discovery of
two large mineralized diatreme breccia bodies, the Outcrop and Azul Breccias.
Kennecott completed 250 rotary air blast (RAB) drill holes (9,314 metres) to
systemically sample bedrock across the entire Peñasquito Mine area which
resulted in the discovery of the Chile Colorado silver-lead-zinc-gold zone. A
total of 72 reverse circulation and core drill holes (24,209 metres) were sited
to test mineralization at the Outcrop Breccia, Azul Breccia, and Chile Colorado
zones.

In
1998, Western Copper Holdings Ltd. (Western Copper) acquired a 100 percent
interest in the Peñasquito Mine from Kennecott. Western Copper completed a nine
hole (3,185 metres) core drilling program and 13.4 line kilometres of tensor
controlled source audio frequency magnetollurics geophysical survey work the
same year. Exploration efforts were focused on the Chile Colorado zone and the
Azul Breccia pipe targets.

Western
Copper optioned the property to Minera Hochschild S.A. (Hochschild) in 2000.
Hochschild completed 14 core holes (4,601 metres), 11 of which were sited into
the Chile Colorado anomaly, but subsequently returned the property to Western
Copper.

From
2002 to 2009, Western Copper completed an additional 874 core and reverse
circulation drill holes (496,752 metres) and undertook a scoping-level study, a
pre-feasibility study, and a feasibility study in 2003, 2004, and 2005
respectively. The feasibility study was updated in 2006. Under the assumptions
in the studies, the Peñasquito Mine returned positive economics. In 2003,
Western Copper underwent a name change to Western Silver Corporation (Western
Silver). Glamis acquired Western Silver in May 2006, and the combined company
was subsequently acquired by Goldcorp in November 2006.

During
2005, a drill rig was used to perform geotechnical field investigations to
support the design of the heap leach facility, waste rock piles, tailings
impoundment and process plant. Standard penetration tests were performed.

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Construction
in the Peñasquito Mine commenced in 2007. In October 2009, the first lead and
zinc concentrates were produced and concentrate shipment to smelters commenced
with first sales recorded in November 2009. Commercial production was achieved
in September 2010.

Geological Setting

Regional Geology

The
regional geology is dominated by Mesozoic sedimentary rocks intruded by Tertiary
stocks of intermediate composition (granodiorite and quartz monzonite). The
sedimentary rocks formed in the Mexico Geosyncline, a 2.5 -kilometre thick
series of marine sediments deposited during the Jurassic and Cretaceous Periods
consisting of a 2,000-metre thick sequence of carbonaceous and calcareous
turbidic siltstones and interbedded sandstones underlain by a 1,200 to
2,000-metre thick limestone sequence.

A
large granodiorite stock is interpreted to underlie the entire area and the
sediments are cut by numerous intrusive dykes, sills and stocks of intermediate
to felsic composition. The intrusions are interpreted to have been emplaced from
the late Eocene to mid-Oligocene.

Local Geology

The
Mesozoic sedimentary units of the Mazapil area were folded into east-west
arcuate folds, cut by northeast- and north-striking faults, and intruded by
Tertiary granodiorite, quartz monzonite, and quartzfeldspar porphyry. Tertiary
stocks and batholiths are exposed in the ranges, while the valleys are filled
with alluvium, generally a few tens of metres thick. Two diatreme breccia pipes,
believed to be related to quartzfeldspar porphyry stocks beneath the Peñasquito
Mine, explosively penetrated the Mesozoic sedimentary units, and probably
breached the surface. Eruption craters and ejecta aprons have since been eroded
away. The current bedrock surface at the Peñasquito Mine is estimated to be a
minimum of 50 metres below the original paleo surface when the diatremes were
formed. There may have been up to several hundred metres of erosion since the
time of mineralization. Alluvium thickness now averages 30 to 50 metres at the
Peñasquito Mine. There was one small outcrop exposure at the Peñasquito Mine, of
breccias near the center of the Peñasco diatreme, rising about 5 metres above
the valley surface. The two diatreme pipes, Peñasco and Brecha Azul, are the
principal hosts for goldsilverzinclead mineralization at the Peñasquito Mine.
The single outcrop near the center of the Peñasco pipe contained weak sulphide
mineralization along the south and west side of the outcrop, representing the
uppermost expression of much larger mineralized zones below.

Property Geology

Peñasco
and Brecha Azul are funnel-shaped breccia pipes, which flare upward, and are
filled with breccia clasts in a milled matrix of similar lithological
composition. The larger diatreme, Peñasco, has a diameter of 1,000 metres by 850
metres immediately beneath surface alluvial cover. The second, and smaller,
diatreme, Brecha Azul, is about 600 metres in diameter immediately below
alluvium. Polymetallic mineralization is hosted by the diatreme breccias column
and surrounding sandstone and siltstone units of the Caracol Formation. The
diatreme breccias are broadly classified into three units, determined by igneous
matrix and clast composition: sediment-clast breccia, milled mixed
sedimentary-intrusive matrix, and intrusive matrix breccias, from top to bottom
within the breccia column. Sedimentary rock clasts consist of Caracol siltstone
and sandstone; intrusion clasts are dominated by quartz-feldspar porphyry. A
variety of dikes cut the breccia column and immediately adjacent clastic wall
rocks. These dikes exhibit a range of textures from porphyry breccia, to
quartzfeldspar and quartz-eye porphyries, to porphyritic, to aphanitic micro
breccias.

Both
of the breccia pipes lie within a hydrothermal alteration shell consisting of a
central sericitepyritequartz (phyllic) alteration assemblage, surrounding
sericitepyritequartzcalcite assemblage, and peripheral
chloriteepidotepyrite (propylitic) alteration halo. A halo of generally lower
grade disseminated zincleadgoldsilver mineralization lies within the
sericitepyritequartzcalcite assemblage surrounding the two breccias.
Disseminated and lesser fracture-controlled electrum, sphalerite, galena, and
various silver sulphosalts are hosted by milled breccias within the diatremes
and by Cretaceous clastic units in the surrounding mineralized halo. Alteration,
mineral zoning, porphyry intrusion breccia, and dykes all suggest the deposits
represent distal mineralization some distance above an underlying
quartzfeldspar porphyry system. The Peñasco and Brecha Azul diatremes lie along
a northwest-trending system of fractures within the central axis of the broad
northwest oval of sericitepyritequartzcalcite alteration. The dominant
foliation direction observed in the outcrop of breccia at Peñasco is also
northwest-trending. Both are thought to reflect the orientation of the porphyry
intrusion underlying the known mineralization.

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Mantos-style
sulphide replacements of carbonate strata have been discovered beneath the
clastic-hosted disseminated sulphide zones adjacent and around the diatreme
pipes. They consist of semi-massive to massive sulphide replacements of
sub-horizontal limestone beds, as well as cross-cutting chimney-style, steeply
dipping, fracture and breccias zones filled with high concentrations of
sulphides. The sulphides are generally dominated by sphalerite and galena, with
variable concentrations, but also contain significant pyrite. Gangue minerals
are subordinate in these strata-replacement mantos and cross-cutting chimneys,
although calcite is usually present. Stratiform and chimney mantos are
characterized by their very high zinc, lead, and silver contents, with variable
copper and gold contributions. Mantos and skarn mineralization have also been
discovered lying beneath the planned open pits in limestone units adjacent and
around the diatremes and above the source of cross-cutting quartzfeldspar
porphyry dykes.

Exploration

Exploration
activities on the Peñasquito Mine have included geological mapping, reverse
circulation and core drilling, ground geophysical surveys, mineralization
characterization studies and metallurgical testing of samples. Petrographic
studies and density measurements on the different lithologies have also been
carried out.

From
2006 to 2010, Goldcorp completed 42 core and reverse circulation drill holes,
including metallurgical, geotechnical and condemnation drilling. An updated
feasibility study was completed and mine construction was commenced during this
period.

During
2010, an exploration drilling program was completed to test whether there was
sufficient mantos-hosted mineralization at depth adjacent to the Peñasquito
diatreme to support potential underground development. A total of 7,317 metres
was drilled in six mantos test holes. Mantos were detected at 900 metres below
surface and the exploration potential remains both at depth and laterally.
Within the greater Peñasquito Mine area, there is also potential for additional
deposit styles, including base metal skarns and porphyry-related disseminated
deposits. Exploration for these deposit styles is at a conceptual/early
exploration stage.

Exploration
at Peñasquito during 2011 was focused on geological mapping, diamond drilling,
and a reverse circulation and condemnation program totaling 80 drill holes. The
exploration program for the Mantos is in progress and the plan is to better
understand the extent and continuity of the Mantos and at-depth Skarn deposits.
A program of 8 drill holes has been developed with two in progress (GP-613-11
and GP-614-11) with a planned total of 8,680 metres. The new information
indicates that this area is at similar depth to the adjacent Mantos within the
Peñasco diatreme and the concept is to prove connection between these two areas.

In
the RAB exploration area, expansion of the Peñasco diatreme is being tested with
completion of 59 drill holes for a total of 2,496 metres in 2011. Objectives of
the program were to identify, with shallower drilling, new anomalies in the
bedrock. Three different anomalies were identified with the 2011 program. The
condemnation drilling program was initiated in late 2011 and is still currently
underway. The program is designed to provide condemnation in the area of the
IPCC (as defined below) waste dump to the north and west of the existing
tailings storage facility. A total of 13 drill holes were completed in 2011 for
5,226 metres (an average depth of 400 metres was planned) and this program will
continue into early 2012.

The
aeromagnetic survey defined an eight kilometres by four kilometres, north to
south-trending magnetic high centered approximately on the Outcrop (Peñasco)
Breccia. Magnetometer surveys suggested the presence of deep-seated
granodiorites, and indicated a relationship between mineralization and the
underlying intrusions. IP surveys were instrumental in locating sulphide
stockworks at the Chile Colorado zone, and the gravity survey helped identify
the Brecha Azul diatreme. In almost all instances, the geophysical surveys
indicated the presence of numerous anomalies scattered across the Peñasquito
Mine.

In
the opinion of the authors of the Peñasquito Report, the exploration programs
completed to date are appropriate to the style of the deposits and prospects
within the Peñasquito Mine and support the genetic and affinity interpretations.

Mineralization

Sulphide
mineralization occurs in the Chile Colorado deposit, in the Peñasco deposit
hosted in the outcrop breccia, in the Luna Azul and Northeast Azul deposits
hosted in the Azul Breccia, and at other smaller targets on the Peñasquito Mine.

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The Peñasco deposit is in the east half of the outcrop breccia directly above the
projected throat of the breccia pipe. It is ovoid in shape, at least 1,000
metres wide in an east direction and 900 metres long in a north direction and
has formed around a complex series of small quartz-porphyry stocks and dikes
with some felsites dikes. It is composed of disseminations and veinlets of
medium to coarse-grained sphaleritegalenaargentite, other unidentified silver
sulfosalts, minor tetrahedritepolybasite and common gangue of
calciterhodochrositequartzfluorite.

The
intrusive rocks themselves are also often mineralized. Mineralization also
extends upwards along the north and south contacts of the outcrop breccia. At
the south contract, it extends upwards in the mixed clast breccia adjacent to
the northwest faults that cut the breccia pipe. The most common mineral host is
the intrusive hydrothermal breccia. This breccia is the dominant rock below the
1,600 metre level. It also is widely distributed as a halo around the porphyry
stocks and dikes. The porphyry often appears to brecciate into the intrusive
hydrothermal breccia as it passes upwards. Mineralization is present in the
upper mixed clast breccia along the south contact, the quartzfeldspar porphyry
intrusive breccia and, to a lesser extent, the quartzporphyry dikes.

The
Chile Colorado silverzinclead mineralization normally occurs as both veining
and narrow fracture filling, hosted in weakly silicified sandstone, siltstone or
shale. The mineralization has been interpreted to represent stockworks,
localized by a north-south trending fracture zone, extending south from the Azul
diatreme. Sphalerite and galena associated with carbonate and pyrite occur
locally as massive veins. Pyrite, sphalerite and galena often occur as discrete
crystals and disseminations within sandstone and siltstone units surrounding the
diatremes. Late-stage carbonates and pyrite fracture fillings occur throughout
the Caracol sedimentary sequence distal to the primary mineralized zones at the
Peñasquito Mine.

In
the opinion of the authors of the Peñasquito Report, the mineralization style
and settling of the deposit is sufficiently well understood to support Mineral
Resource and Mineral Reserve estimation.

Drilling

Drilling
completed on the Peñasquito Mine for the period 1994 to 2010 is comprised of 958
drill holes totalling 524,748 metres. Drilling has focused on three principal
areas: the original Chile Colorado Zone, the Brecha Azul Zone (Azul Breccia,
Northeast Azul, and Luna Azul) and the Peñasco Zone (including El Sotol).

RC
drilling was conducted using down-hole hammers and tricone bits, both dry and
with water injection. Some RC drilling was performed as pre-collars for core
drill holes Sample recoveries were not routinely recorded for RC holes. Core
drilling typically recovered HQ size core (63.5 millimetres diameter) from
surface, then was reduced to NQ size core (47.6 millimetres) where ground
conditions warranted. Metallurgical holes were typically drilled using PQ size
core (85 millimetres).

Any
break in the core made during removal from the barrel was marked with a colour
line. When breakage of the core was required to fill the box, edged tools and
accurate measure of pieces to complete the channels was the common practice to
minimize core destruction. The end of every run was marked with a wooden tick
and the final depth of the run. Core was transferred to wooden core boxes,
marked with up and down signs on the edges of the boxes using indelible pen.
The drill hole number, box number and starting depth for the box was written
before its use, whilst end depth were recorded upon completion. All information
was marked with indelible pen on the front side of the box and also on the
cover.

All
core from the Goldcorp drill programs has been processed on site. Core boxes
were transported to the core shed by personnel from the company that was
managing the drill program, or the drilling supervisor.

Geotechnical Drilling

Core
holes were oriented at an angle of 60 degrees to the horizontal and were sited
to intersect the November 2005 design basis pit wall one-third of the ultimate
wall height above the base of the final pit level. Core hole diameters were
typically HQ3 (61 millimetres diameter) but were telescoped down to NQ3 (45
millimetres) if difficult drilling conditions were encountered. Core was
recovered in a triple tube core barrel assembly.

Core
orientation was accomplished using two independent methods: clay impression and
a mechanical down-hole system referred to as Corientor. Field point load tests
were completed for each core run to estimate the unconfined compressive strength
of the intact rock. Drill holes to WC-250 were also geotechnically logged.

Core recovery for the Peñasquito Mine drilling averages 96.9 percent.

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Geological Logging

Logging
of RC drill cuttings and core utilized standard logging procedures. Logs
recorded lithologies, breccia type, fracture frequency and orientation,
oxidation, sulphide mineralization type and intensity, and alteration type and
intensity. Core was photographed and video recorded from collar to toe, these
digital files are stored on hard disc. Geotechnical logging for pit design
purposes was typically completed at 3 metre intervals, and recorded on compact
discs. For site location purposes, geotechnical logging included sample
descriptions, SPT blow counts, sample numbers and visual classifications based
on the united soil classification system.

Collar Surveys

Collar
surveys have been performed by a qualified surveyor since 2002. All drill hole
collars are identified with a concrete monument, allowing all drill holes to be
identified at a later date. The monument is placed directly over the hole collar
on completion of each drill hole.

Downhole Surveys

Down-hole
surveys are completed by the drilling contractor using a single shot, through
the bit, survey instrument. Drill holes are surveyed on completion of each hole
as the drill rods are being pulled from the hole.

Deposit Drilling

Drill
hole spacing is generally on 50 metre sections in the main deposits spreading
out to 400 metres spaced sections in the condemnation zones. Drill spacing is
wider again in the areas outside the conceptual pit outlines used to constrain
Mineral Resources. Drilling covers an area of approximately eight kilometres
east to west by 4,500 metres north to south with the majority of drill holes
concentrated in an area 2.1 kilometres east to west by 2.8 kilometres north to
south.

Blasthole Drilling

Drilling
for all materials is on 15 metre benches drilled with 1.5 metres of sub-grade,
using seven blast hole drill rigs. The drill sections display typical drill hole
orientations for the deposits, show summary assay values using colour ranges for
assay intervals that include areas of non-mineralized and very low grade
mineralization, and outline areas where higher-grade intercepts can be
identified within lower-grade sections. The sections confirm that sampling is
representative of the gold, silver, and base metals grades in the deposits,
reflecting areas of higher and lower grades.

Sampling, Analysis and Security of Samples

Peñasquito
Mine project staff has been responsible for sample collection, core splitting,
run of mine assaying, preparation of samples, storage and security from
inception to date.

Reverse
circulation drill cuttings were sampled at intervals of two metres. The material
was split at the drill into several portions of 12 kilograms or less. A handful
of rock chips from each sample interval was collected and logged by experienced
onsite geologists. Data from the drill logs were entered digitally into files
for computer processing.

The
standard sample interval is two metres. Some samples are limited to geological
boundaries and are less than two metres in length. Logging was completed at the
drill site prior to splitting. Splitting of the core was supervised by the
geologist who logged the core in order to ensure sampling integrity. For
condemnation drill holes, core was assayed every two metres out of 20 unless
geologic inspection dictated otherwise.

A
senior Goldcorp geologist examined the core, defined the primary sample
contacts, and designated the axis along which to cut the core. Special attention
is taken in veined areas to ensure representative splits are made perpendicular
to, and not parallel to, veins.

Standard
reference material samples and blanks were inserted into the sample stream going
to the assay laboratory in a documented sequence. Cut samples were bagged and
numbered in polyethylene bags. Groups of 20 sample bags were placed in larger bags and labelled with the name and address of
the laboratory, and the number and series of samples that were contained within
the bag. A Peñasquito Mine truck transports the sacks to the ALS Chemex
laboratories in Guadalajara, Mexico, approximately once per week. ALS Chemex was
responsible for sample preparation throughout exploration and infill drilling
phases through its non-accredited sample preparation facilities in Guadalajara.
All samples were dispatched to the Vancouver, Canada laboratory facility for
analysis, which, at the time the early work was performed, was ISO-9000
accredited for analysis; the laboratory is currently ISO-17025 certified and is
independent of Goldcorp. The umpire (check) laboratory is Acme Laboratories in
Vancouver, which holds ISO-9000 accreditations for analysis. The run-of-mine
laboratory is not certified.

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Blast
holes are sampled as whole-hole samples by an experienced sampler. During 2008, Goldcorp staff completed a total of 1,229 specific gravity measurements on drill
core. An additional 127 bulk density measurements were also available from
Dawson Metallurgical Laboratories Inc. Utah. Specific gravity data were used to
assign average bulk specific gravity values by lithology.

In
the opinion of the authors of the Peñasquito Report, the sampling methods are
acceptable, meet industry-standard practice, and are adequate for Mineral
Resource and Mineral Reserve estimation and mine planning purposes. Sizes of the
sampled areas are representative of the distribution and orientation of the
mineralization and sampling is representative of the gold, silver, and base
metal grades in the deposits, representing areas of higher and lower grades.

A
number of independent data checks have been performed, in support of
feasibility-level studies, and in support of technical reports, producing
independent assessments of the database quality on the Peñasquito Mine. No
significant problems with the database, sampling protocols, flowsheets, check
analysis program, or data storage were noted. Goldcorp performed sufficient
verification of the data and database to support Mineral Resources and Mineral
Reserves being estimated.

Security of Samples

Blanks
and standard reference materials have been used in sampling programs by Goldcorp. The seven SRMs were prepared by Metcon Research, Tucson, AZ from
Peñasquito Mine mineralization. Blank samples comprise non-mineralized
limestones from the general Peñasquito Mine area.

Entry
of information into databases utilized a variety of techniques and procedures to
check the integrity of the data entered. The system with data electronically
entered (without a paper log step) is still being implemented. Assays were
received electronically from the laboratories and imported directly into the
database. Drill hole collar and down hole survey data were manually entered into
the database. Data are verified on entry to the database by means of in-built
program triggers within the mining software. Checks are performed on surveys,
collar co-ordinates, lithology data, and assay data.

Paper
records were kept for all assay and QA/QC data, geological logging and bulk
density information, down-hole and collar coordinate surveys. All paper records
were filed by drill hole for quick location and retrieval of any information
desired. Assays, down-hole surveys, and collar surveys were stored in the same
file as the geological logging information. In addition, sample preparation and
laboratory assay protocols from the laboratories were monitored and kept on
file.

Sample
security was not generally practiced at the Peñasquito Mine during the drilling
programs, due to the remote nature of the site. Sample security relied upon the
fact that the samples were always attended or locked at the sample dispatch
facility. Sample collection and transportation have always been undertaken by
Goldcorp or laboratory personnel using company vehicles. Drill samples were
picked up at site by ALS Chemex, prepared to a pulp in Guadalajara, Mexico, and
sent by ALS Chemex via air to the ALS Chemex analytical laboratory in Vancouver,
Canada. Chain of custody procedures consisted of filling out sample submittal
forms that were sent to the laboratory with sample shipments to make certain
that all samples were received by the laboratory. Assay pulps and crushed reject
material are returned by ALS Chemex to Goldcorps core shack in Mazapil for
storage. Drill core is stored in wooden core boxes on steel racks in the
buildings adjacent to the core logging and cutting facilities. The core boxes
are racked in numerical sequence by drill hole number and depth oarse rejects in
plastic bags are stored in cardboard boxes on steel racks in a separate locked
building. The coarse reject boxes are labelled and stored by sample number.

Typically,
drill programs included insertion of blank, duplicate and CRM samples. The QA/QC
program results do not indicate any problems with the analytical programs;
therefore the gold, silver, and base metal analyses from the core drilling are suitable for inclusion in Mineral Resource and
Mineral Reserve estimation.

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The authors of the Peñasquito Report are of the opinion that quality of the
gold, silver and base metal analytical data are sufficiently reliable to support
Mineral Resource and Mineral Reserve estimation and that sample preparation,
analyses and security are generally performed in accordance with exploration
best practices and industry standards.

Mineral Reserve and Mineral Resource Estimates

See
Description of the Business  Technical Information  Summary of Mineral
Reserves and Mineral Resources for the estimated Mineral Reserves and Mineral
Resources (silver only, 25%) for the Peñasquito Mine as of December 31, 2011.

Mining Operations

Mining Method and Metallurgical Process

The Peñasquito Mine consists of a leach facility that processes a nominal 25,000
tonnes per day of oxide ore and a sulphide plant that will process a nominal
130,000 tonnes per day of sulphide ore. Mine construction commenced in 2007. By
year-end 2011, mine production was at full capacity; however the plant was still
ramping up and lacking only sufficient pebble feed to the High Pressure Grinding
(HPGR) circuit, limiting throughput in the HPGR circuit. A project to provide
supplemental ore feed directly to the HPGR circuit was initiated in late 2011
and commissioning is scheduled for the end of the first quarter of 2012. In
October 2009, the first lead and zinc concentrates were produced and concentrate
shipment to smelters commenced with first sales recorded in November 2009.

Ore
placement on the heap leach pad began in February 2008. On April 8, 2008, ore
leaching was initiated and the first gold pour occurred on May 10, 2008. As of
December 31, 2011, a total of 50,601,060 dry metric tonnes of ore with an
average grade of 0.27 grams per tonne of gold and 24.2 grams per tonne of silver
were placed on the leach pad. A total of 55,826 ounces of gold and 1,891,027
ounces of silver were produced from the oxide facility in 2011. Recoveries
averaged 57.4 percent for gold and 22.8 percent for silver. The final pit will
have one contiguous outline at surface but will consist of two distinct pit
bottoms, one on the Peñasco zone and one on the Azul/Chile Colorado zone.
Currently only the Peñasco portion of the pit is in operation, using a
conventional truck-and-shovel fleet. Drill patterns range from nine metres by
nine metres in overburden to six metres by six metres in sulphide ore. The heap
leach ore drill pattern is being adjusted as needed to assure rock fragmentation
of about 127 to 152 millimetres for leaching.

Oxide Ore

Run-of-mine
oxide ore will be delivered to the heap leach pile from the mine by haul trucks.
Lime will be added to the oxide ore, prior to addition of the oxide ore to the
pad. Ore is placed in ten metre lifts, and leached with cyanide solution.
Pregnant leach solution is clarified, filtered, and de-aerated, then treated
with zinc dust to precipitate the precious metals. The precipitated metals are
subsequently pressure filtered, and the filter cake smelted to produce doré.

Sulphide Ore

Run-of-mine sulphide ore is delivered to the crusher dump pocket from the mine by 290 tonne
rear-dumphaul trucks. The crushing circuit is designed to process as much as
148,000 tonnes per day of run-of-mine sulphide ore to 80 percent passing 159
millimetres. The crushing facility consists of a gyratory crusher capable of
operating at 92 percent utilization on a 24-hour-per-day, 365-days-per-year
basis.

Construction
of the Waste Rock Overland Conveyor system, previously referred to as the In-Pit
Crushing and Conveyor (IPCC) system, is proceeding according to schedule
towards commissioning of the sizer and overland conveyor in the second half of
2012. The waste rock overland conveying system including the waste stacker is
expected to achieve full production rates in the first quarter of 2013.

During
2011, both 50,000 tonne-per-day capacity semi-autogenous grinding (SAG) lines
were operational and the HPGR operation was sporadic due to lack of pebble
generation (i.e. consistent feed). Sulphide plant throughput averaged 93,700
tonnes per day in the fourth quarter of 2011 with the month of December
averaging 107,000 tonnes per day. A project to provide for supplemental feed
directly to the HPGR was undertaken beginning in August 2011 with commissioning scheduled for the first quarter of 2012. Full
production at 130,000 tonnes per day is planned from April 1, 2012 onward. For
2011, a total of 30,999,245 dry metric tonnes of ore with an average grade of
0.37 grams per ton of gold, 26.20 grams per tonne of silver, 0.64 percent zinc
and 0.34 percent lead was processed through the sulphide plant facility, for a
total of 198,263 ounces of gold, 17,154,467 ounces of silver, 283,644,404 pounds
of zinc, and 154,738,945 pounds of lead produced (payable metal). Recoveries
averaged 60.5 percent for gold, 73.7 percent for silver, 75.9 percent for zinc,
and 70.1 percent for lead.

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Mine Life and Expected Payback Period

The
mine plan and financial analysis are based on a detailed production schedule.
The life-of-mine plan update in 2011 was based on $1,200 per ounce of gold and
operating parameters derived from the 2011 site budget plan and consisting of
production schedules, operating parameters and operating costs. Mine production
during 2011 was 155.4 million metric tonnes. The production rate for the period
2012 to 2017 is projected to average 525,000 tonnes per day. The mine will
supply sulphide ore to the plant at a rate of 47.5 million metric tonnes of
sulphide ore per year. The total material mined per year will peak at 220.0
million metric tonnes per year (603,000 tonnes per day). The production rate
increases will correspond to significant increases in the equipment quantities
of the mining fleet.

The Peñasco pit will provide the only sulphide mill feed through 2021 and will
continue to provide mill feed into 2033. Waste stripping will begin in Chile
Colorado in 2020 and sulphide ore will be mined during 2021 through 2033. The
sulphide mill feed will be from both pits from 2021 to 2032. The payback for the
initial capital investment in the Peñasquito Mine was 7.9 years from
commencement of the Peñasquito Mine in 2007, which means that under this
scenario the Peñasquito Mine will achieve payback by the fourth quarter of 2014.
Goldcorp prepared an economic analysis which confirmed that the economics based
on the Mineral Reserves over a 22-year mine life could repay life-of-mine
operating and capital costs.

Markets and Contracts for Sale

Goldcorp
currently has an operative refining agreement with Met Mex Peñoles for refining
of doré produced from the Peñasquito Mine. Goldcorps bullion is sold on the
spot market, by marketing experts retained in-house by Goldcorp. The terms
contained within the sales contracts are typical and consistent with standard
industry practice, and are similar to contracts for the supply of doré elsewhere
in the world. Part of the silver production is sold to Silver Wheaton.

The
markets for the lead and zinc concentrates from the Peñasquito Mine are
worldwide with smelters located in Mexico, North America, Asia and Europe.
Metals prices are quoted for lead and zinc on the London Metals Exchange and for
gold and silver by the London Bullion Market Association. The metal payable
terms and smelter treatment and refining charges for both lead and zinc
concentrate represent typical terms for the market. In addition to the forward
sales contract for silver production with Silver Wheaton, Goldcorp has entered
into sales and collar option agreements for the base metals volumes in relation
to Peñasquito Mine concentrate sales.

Taxes

The
income tax rate applicable to corporations in Mexico was increased from 28
percent to 30 percent as of January 1, 2010. The rate will be applied only
during 2010, 2011 and 2012. In 2013 the rate will be reduced to 29 percent, and
further reduced to 28 percent in 2014.

Environment

Environmental
laws require the filing and approval of an environmental impact statement for
all exploitation work, and for exploration work that does not fall within the
threshold of a standard issued by the Federal Government for mining exploration.
Reviews of environmental permitting, legal, title, taxation, socio-economic,
marketing and political factors and constraints for the Peñasquito Mine support
the declaration of Mineral Reserves.

Exploration and Development

Following
a full year of operations and the availability of new cost data, approximately
220 million tonnes of low grade gold material were moved from Proven and
Probable Mineral Reserves into the Measured and Indicated Mineral Resources
category, reflecting higher operating cost assumptions than were contemplated in
the original 2006 feasibility study.

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Exploration
potential remains under the current open pits, and may support underground
mining. Goldcorp is currently investigating an option of mining mineralization
outside the area of the current open pit design using bulk mining methods such
as block caving. This option is envisaged as a possible source of additional
mine life following the cessation of open pit mining in 2032. Goldcorp is also
investigating the potential for underground mining of the mantos mineralization
during the open pit mine life. This could utilize selective mining methods such
as longhole stoping or cut-and-fill. These studies are at an early, conceptual
stage, and no underground Mineral Resources or Mineral Reserves have been
declared.

Production Information

The
following table summarizes 2008 to 2011 silver production (100% basis) from the Peñasquito Mine:

Oxides
      Units
      2008
      2009
      2010
      2011Produced Payable Gold
    (oz)
    20,000
    83,200
    78,399
    55,800Produced Payable Silver
    (oz)
    1,356,000
    2,600,000
    3,006,262
    1,891,028SulphidesProduced Payable Gold
    (oz)
    
    
    89,800
    198,300Produced Payable Silver
    (oz)
    
    
    10,946,400
    17,146,500


PASCUA-LAMA PROJECT, BORDER OF CHILE AND ARGENTINA

At
the request of the Company, Christopher Elliott, FAusIMM, George Even, MAusIMM,
Dino Pilotto, P.Eng., Cameron Scott, P.Eng., and Bart Stryhas, PhD CPG, all of
SRK Consulting (SRK), and Edward McLean, FAusIMM, of Ausenco Services Pty.
Ltd., prepared a technical report in accordance with NI 43-101 entitled NI
43-101 Technical Report Pascua-Lama Project Region III, Chile/San Juan Province,
Argentina, dated September 9, 2009, amended October 28, 2009 (the Pascua Lama
Report).

The
following description of the Pascua-Lama Project has been summarized from the
Pascua-Lama Report and other project updates as per Barricks SEDAR filings. Readers should consult the Pascua-Lama Report to obtain
further particulars regarding the Pascua-Lama Project. The Pascua-Lama Report is
available on SEDAR at www.sedar.com under the Companys profile.

Project Description and Location

The Pascua-Lama Project straddles the Chilean-Argentine border in the Cordillera de
Los Andes. The Pascua portion of the deposit, which contains the majority of
the silver mineralization (approximately 65% of the mineralization), is situated
on the Chilean side of the border in Region III, approximately 150 kilometres
southeast of the town of Vallenar. The Lama portion of the property is located
within the Province of San Juan, Argentina, 300 kilometres northeast of the
provincial capital city of San Juan.

The Pascua-Lama property consists of various mineral and exploration concessions
granted by the Republic of Chile to Compania Minera Nevada SpA (CMN),
Barricks wholly-owned Chilean subsidiary and by the Republic of Argentina to
Barrick Exploraciones Argentina S.A. (BEASA), Barricks wholly-owned
Argentinean subsidiary.

The CMN mining properties in the Chile area are 108,036 hectares and the BEASA
mining properties in the Argentina area are 6,888 hectares.

In
both Chile and Argentina, Barrick, through its wholly-owned Argentinean
subsidiary, Barrick Exploraciones Argentina S.A., and its wholly-owned Chilean
subsidiary, Compañia Minera Nevada SpA, owns the mining property in the project
area. The mining rights have no expiry date, provided the applicable annual land
payments are made.

Pursuant
to federal legislation which implemented law 24.196 in May 1993, and Provincial
legislation adhering to the same, operating mines are required to pay to the
Provincial government a royalty of up to 3% (Boca Mina) for minerals extracted from Argentinean soil. In addition, Barrick
is obligated to pay a gross proceeds sliding scale royalty on gold produced from
the Pascua-Lama properties located in Chile ranging from 1.433% to 9.555% and a
1.91% net smelter royalty on copper produced from the properties. In addition, a
step-scale 5% or 7.5% gross proceeds royalty on gold produced and a sliding
scale net smelter royalty of 0.5% to 6% on all products other than gold and
silver is payable in respect of certain portions of the property located in
Argentina. The sliding scale and step-scale royalties on gold increase with
rising spot gold prices.

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Accessibility, Climate, Local Resources, Infrastructure
  and Physiography

The
principal access into the Pascua-Lama Project site from the Argentinean side is
via 363 kilometres of paved, gravel and dirt roads from the city of San Juan,
Argentina. At high altitude, annual road closures due to severe winter weather
are estimated to be about 44 days without the installation of control systems
and 24 days with control systems. During a normal winter, this may reduce to 14
days and six days, respectively.

In
Chile, Route C-495, also known as the Alto Del Carmen road, runs from Vallenar
to the Potrerillo River then continues through the Potrerillo valley to the Tres
Quebradas valley, for a total distance of 146 kilometres. The road is paved from
Vallenar to El Corral for a distance of approximately 100 kilometres with the
remainder being constructed with a gravel surface. This road passes through Alto
Del Carmen, San Felix, Las Breas and El Berraco. Other than minor snow clearing
delays, no winter closures are expected on this portion of the road.

The
area has high mountain semi-arid weather, typical of this region with dry and
temperate summers and cold and humid winters. The temperature extremes range
from minus 25 degrees Celsius in the winter to 25 degrees Celsius in the summer.

The
topography of the Pascua-Lama Project is steep and rugged, and is characterized
by high sierras and deep valleys with natural slopes of 20° to 40°. Elevations
on the property range from approximately 3,800 metres to 5,250 metres above sea
level. Superficial material consists of rock outcrops, talus, scree and
colluviums (primarily gravel, sand, silt and clay). Vegetation is sparse.

In
Chile, mining rights are dominant to the surface estate, and the Mining Code
grants the owner of the mineral estate liberal rights to use the surface subject
to payment of reasonable compensation to the surface owner. CMN owns all the
surface property in and around the Pascua-Lama Project, which was purchased for
locating mine facilities and to purchase water rights. Similarly, in Argentina,
the Mining Code provides the mining concession owner with broad rights to
establish easements for stockpiles, waste dumps, tailings, process facilities,
power lines, roads, pipelines, etc., subject to the payment of reasonable
compensation to the surface owner.

The Pascua-Lama Project will purchase power from a registered generator on the SIC
grid in Chile. Until permanent power is available at site, temporary
construction power will be provided by diesel generator. The temporary
construction generators will be suitable for use as emergency back-up generators
during operations in the event of a primary power failure. Permanent electrical
power for the project will be provided by a single circuit 220 kV 106 km line
from a main substation connected to the Chile main Central Interconnected grid
System (SIC) near Punta Colorada (Coquimbo Region) to a substation near the
Protocol Area Access Control point in Chile. From there, separate 220 kV lines
will be provided for power supply to the substations located at the process
plant in Argentina (47 km) and the mine facilities in Chile (23 km). The
construction of the primary power supply system is planned to be completed by
mid-2013.

The
first process line is scheduled to commence operation in 2013 with first metal
production expected by mid 2013. The estimated average demand for electrical
energy, during the early stages of operation, increases from 68 megawatts during
the fourth quarter of 2012 to 94 megawatts in the third quarter of 2014. Peak
demand during this period is estimated at 113 megawatts. By the fourth quarter
of 2015, the Pascua-Lama Project will essentially reach steady-state conditions,
with an average demand of 111 megawatts and a peak of 121 megawatts for a total
annual consumption of 960 gigawatt hours.

The
Chilean electricity supply system has recently experienced high prices and
restricted supply, however a program of expansion is expected to alleviate these
problems. The expansion program will consist of new generation developments
based on imported oil, coal and liquefied natural gas and will enable the Pascua-Lama Project to achieve its objectives of low cost and reliable/high
availability for the duration of the Pascua-Lama Project.

In
Chile, Barrick owns the surface land required for the facilities of the project
and has obtained sufficient water rights for the projects needs. In Argentina, Barrick has an
undivided 90% interest in Campos Las Taguas which is the surface property
affected by the mining facilities of the project. In 2008, the majority of
remaining key sectorial permits, including water rights and an easement with
respect to the 10% interest of Campos Las Taguas owned by third parties, were
granted by the government of the San Juan Province in Argentina.

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The
tailings storage facility is located east of the processing plant in the Rio Turbio valley, at an elevation of 3,900 metres above sea level. Reclaim water is
returned to the plant process water system.

The
Nevada Norte waste rock facility, located at the head of the Rio del Estrecho
valley, and immediately north of the Pascua-Lama pits, is designated as the
primary waste rock disposal area throughout the life of the mine. The primary
dump platform will be at 4,750 metres above sea level with the development of a
second level at 4,655 metres above sea level to be commenced in Year five. The
waste rock facility has a design capacity of 1,100 million tonnes and when
completed will be approximately 600 metres high.

Development

Approximately
55% of the previously announced pre-production capital of $4.7 -$5.0 billion has
been committed and first production is expected in mid-2013. The foregoing
estimates are based on gold, silver and oil price assumptions of $1,300 per
ounce, $25 per ounce and $100 per barrel, respectively and assuming a Chilean
peso exchange rate of 475:1. Barrick will continue to finance the project
through a combination of one or more of existing capital resources, operating
cash flows and additional financings. The project is being impacted by labor and
commodities cost pressures as a result of inflation, competition for skilled
labor, the impact of increased Argentinean customs restrictions on equipment
procurement and lower than expected labor productivity.

In
Chile, earthworks were about 95% complete at year-end 2011, and in Argentina,
earthworks construction was approximately 65% complete at year end.
Approximately 40% of the concrete has been poured at the processing facilities
in Argentina and about 15% of the structural steel has been erected to date.
Occupancy of the construction camps in Chile and Argentina continues to ramp up
with 6,500 beds available by the end of 2011. The camps are expected to reach
their full capacity of 10,000 beds in mid-2012. Average annual gold production
from Pascua-Lama is expected to be 800,000-850,000 ounces in the first full five
years of operation at negative total cash costs of $225-$275 per ounce based on
a silver price of $25 per ounce. For every $1 per ounce increase in the silver
price, total cash costs are expected decrease by about $35 per ounce over this
period.

History

To
date, no significant mining activity has taken place in the general vicinity of
the Pascua-Lama Project area. Following the discovery of the El Indio deposit 45
kilometres to the south in the mid-1970s, exploration efforts by St. Joe
Minerals (St. Joe) Compañia Minera San Jose (CMSA) and other companies to
locate similar high-grade gold vein systems intensified in the surrounding
region. This increased activity resulted in the 1977 discovery of anomalous
levels of gold mineralization in what was at that time identified as the Nevada
Sector (synonymous with the Pascua project area) by surface geochemical
sampling. Soon after the discovery that same year, CMSA acquired the Nevada
property and increased the level of geological, geochemical and geophysical
exploration activities.

On
the Argentine side, St. Joe conducted exploration in the Lama sector through its
subsidiary, Compañia Minera Aguilar S.A. (CMA). Early activity on the Lama
side of the deposit generally lagged behind work on the Pascua portion by
several years. Exploration work at Lama remained fairly low through the tenures
of Bond Gold International (Bond) of Australia (after its acquisition of St.
Joe) and LAC Minerals (LAC) of Canada, which subsequently acquired Bond.
Serious exploration in the Lama area did not take place until Barricks entry
into the area through its acquisition of LACin August 1994.

A
timeline of historical events for the Pascua-Lama Project are as follows:

- 1977  discovered by St. Joe and CMSA
- 1982  joint venture between CMSA, Anglo American (Anglo) and Compañia
  Minera Mantos Blancos
- 1984  Anglo withdrew from the joint venture
- 1987  Bond acquired St. Joe
- 1989  LAC acquired Bond and its holdings in Chile and Argentina
- 1994  Barrick acquired LAC

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- March 2009  updated feasibility study completed
- May 7, 2009  Barrick announced Protocol Tax Agreement between Argentina
  and Chile and subsequent board approval to commence development of the
  Pascua-Lama Project

Geological Setting

The Pascua-Lama deposit is situated at the crest of the high cordillera of Region
III, along the international border between Chile and Argentina and on the
northern edge of a major mineralized trend known as the El Indio belt. This
trend, along which a number of major precious metal deposits are located
(including the nearby Veladero mine), stretches 47 kilometres south of
Pascua-Lama to the world-renowned El Indio deposit and adjacent Tambo deposit
(both closed).

The
geology in the region is dominated by extrusive volcanic rocks that are locally
intruded by hypabyssal stocks of varying size and numerous dikes and sills.

Regional
structure in and around the gold deposits and prospects in the El Indio belt is
dominated by northerly-trending high angle reverse faults, normal faults and
fold belts oriented parallel to the major structural grain of this portion of
the Andean Cordillera. Pascua-Lama is positioned near the center of a northerly
trending graben that contains nearly the entire Tertiary volcanic sequence that
is distributed along the spine of the cordillera in Chile and Argentina. This
graben is bounded by two high angle reverse fault zones, the Baños del
Toro/Chollay located 10 kilometres west of the deposit and the El Indio zone
situated 16 kilometres to the east. The graben is cut at Pascua and El Indio by
strong, west-northwest fracture zones, which form loci for mineralization. Large
elliptical fracture zones are also present immediately to the east and/or
northeast of both El Indio/Tambo and the Pascua-Lama/Veladero deposit areas, and
these zones may have contributed to host rock permeability.

An
intrusive complex is the dominant host lithology for the deposit, and it
consists of an upper fine-grained, weakly porphyritic aplite overlying a
porphyritic granite/granite porphyry, that in turn overlies a coarse-grained
granite aplite. Locally, coarse-grained equigranular granite occurs at greater
depth. The structural framework of the Pascua-Lama deposit has been divided into
six principal sets, each of which is characterized by a range of common
azimuths.

Exploration

After Barricks acquisition of LAC in August 1994, CMNs exploration activities in the
Pascua and Lama sectors of the Nevada project increased significantly. Drilling
began to test the area along the west and south margins of Brecha Central.
Drilling accelerated in 1995-1996, testing the mineralization in and around
Brecha Central, Brecha Sur and Brecha Pedro. Just before the end of the field
season in April 1996, the portal for the Alex Tunnel was installed.

The
amount of diamond core drilling in the Pascua sector increased substantially
during the 1996-1997 field season for geotechnical purposes. While work again
focused on the Brecha Central, Brecha Sur and Brecha Pedro areas, some drilling
also extended west of Brecha Central to the border with Argentina. Work
intensified to define the resources in the Pascua sector in the fall of 1997 and
continued through 2000. Surface reverse circulation and diamond drilling
continued to push east towards the Lama sector and the border with Argentina.
The workings on the Alex Tunnel level were extended from the portal eastward in
a system of drifts and crosscuts for a distance of approximately four
kilometres, providing underground exposures of the various mineralized fracture
systems, breccia and intrusive bodies, and other mineralized lithologies
intersected by surface drilling. Channel sampling and geologic mapping of the
underground workings provided data and information for the updating of the
geologic interpretations and computer block models used for resource estimation.
Drifting in the Alex Tunnel resumed in late 1998 from the international border,
eventually breaking through on July 7, 1999.

In
the Lama sector, surface drilling during the 1997-1998 field season commenced in
the portion of the Lama deposit that was controlled by Barrick. Surface
exploration activity in the Lama sector remained high through the 1999-2000
field season, however, the following year, activity was reduced significantly.

The
break through of the Alex Tunnel in 1999 provided year-round underground access
and opened up a significant portion of the Pascua-Lama deposit for exploration
and delineation by underground diamond drilling. In addition to the drilling,
underground work included geologic mapping, channel sampling for mineralization
characterization, and also channel sampling and bulk sampling for metallurgical
testing.

In
the 2005-2006 field season, the drilling activities were initiated to define
some condemnation areas and characterize the rocks for geotechnical conditions in the
future mine infrastructure location.

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Mineralization

The
emplacement of mineralization, as well as development of the breccias which host
mineralization, at Pascua was controlled by high angle faults. Six high angle
fault sets have been identified, striking west-north-west, north-northeast,
north-south, north-west, north-east and east-west. The breccias that host much
of the gold-silver mineralization occur at the intersections of three or more
fault sets. Here, mineralization is found mainly in veinlets that are hosted by
fractures of the intersecting high angle fracture zone sets, although minor
mineralization also occurs in the selvage around veinlets. Low angle fractures
within the breccias often contain significant gold and copper with or without
silver mineralization, mineralization occurring within the matrix of breccia
bodies is important as well.

In
total, at least 14 major centres of mineralization and a number of smaller
centres have been recognized, of which Brecha Central is the most significant.
Other major centres (in order of decreasing importance) include Brecha Pedro and
Frontera, which are located approximately 410 metres and 350 metres to the
west-north-west and north-east, respectively, of Brecha Central, and Esperanza
Norte, Seis Esquinas, Brecha Rosada, Brecha Sur, Central Norte, Esperanza Sur,
Morro Oeste, Huerfano, Escondite, Penelope Este and Penelope Oeste.

The
silver mineralization grossly mimics the distribution of gold but over a much
broader lateral area. In any particular zone, silver typically occurs across
widths that are two to three times those of gold. Generally, silver also
occupies an elevation range that overprints the vertical extent of gold between
4,600 metres above sea level and 4,880 metres above sea level, with local zones
along structures extending upwards to 4,950 metres above sea level to 5,000
metres above sea level. The upper 150 metres of the silver zone tends to average
between 50 grams per tonne to 200 grams per tonne silver while grades in the
lower portion of the zone tend to average between 20 grams per tonne to 40 grams
per tonne.

Drilling

Much
of the upper 300 metres in the deposit has been drilled from the surface by
vertical diamond drilling and reverse circulation holes or clusters of angle
holes that fan outwards from individual drill sites. Over the life of the
Pascua-Lama Project, approximately 159,212 metres of diamond drilling and
approximately 333,415 metres of reverse circulation drilling has been completed.

The
majority of the drill holes are steeply inclined in a wide range of strike
directions orthogonal to the mineralized structures. Because of these geometric
relations, the drill hole sample lengths do not represent true thickness of the
mineralization. In general, the sampled length is greater than the actual length
of mineralization.

Sampling and Analysis

Reverse Circulation Drilling

The
first reverse circulation drilling on the Pascua-Lama Project was under the
direction of LAC and consisted of relatively small-diameter (108 millimetres)
holes. The sampling of reverse circulation drill cuttings for assay reportedly
followed generally accepted industry practices, where samples were taken every
1.0 metre during drilling, and collected and bagged at the drill rigs after
being reduced using either rotary splitters or conventional riffle splitters.
The reverse circulation drilling undertaken by Barrick since 1994 was sampled on
1.0 metre intervals. Sample homogenization and splitting took place in the
sample preparation area, not at the drill pad, in order to assure that samples
were well-mixed before splits were made.

Diamond Drilling

Diamond
drilling has been an integral part of the sampling of the Pascua-Lama deposit
since its discovery in the late 1970s. Up until 1988, only diamond drilling was
done, with surface holes recovering NW or NQ-diameter core, and underground
drilling from tunnels recovering smaller diameter core (AW, BW, or BQ). The use
of AW-diameter core (drilled only during the 1983-1984 field season by CMN) was
abandoned thereafter due to unacceptable core recoveries. Since 1988, most
diamond core holes drilled have been HQ or NQ when drilled from the surface and
NW or NQ when drilled from underground stations.

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Core
samples were collected on 1.0 metre down-hole lengths except where geologic
contacts or visual breaks in mineralization type were noted, in which case
sample lengths could be less than 1.0 metre or between 1.0 metre and 2.0 metres.
Initially, drill core was split longitudinally for assay using diamond saws.
After hole DDH-182 was drilled, conventional hydraulic or manual core splitters
were used in order to help avoid the possible loss of gold during the core
splitting process.

More
than 4,000 individual density determinations were done using the water immersion
method on wax-covered samples, the majority of which were taken from diamond
drill core. Density determinations that are based on the standard waxed
core/water immersion method and which were performed on material that does not
have a wide range of sulphide content form a solid basis for the assignment of
material density values in resource block modeling.

The
collection of samples from the reverse circulation and diamond drilling holes
were based on a sample interval of 1.0 metre measured along the drill hole
trace. This is considered an appropriate sample length for gold deposits such as
Pascua-Lama.

During LACs tenure, all primary analyses were done at the Canadian Institute of
Mining, Metallurgy & Petroleums (CIMM) Santiago laboratory facility,
using a combination of aqua regia digestion with MIBK organic back extraction
and atomic absorption finish, and conventional fire assay with gravimetric
finish. In some cases where initial aqua regia analysis indicated gold contents
in excess of 1.0 gram per tonne, follow-up fire assays were run.

On
the Lama side, because the exploration activities were run out of the Barrick
office in San Juan, Argentina by different personnel, samples were sent to the
laboratory operated by Bondar Clegg (BC) in Santiago for gold, silver and
copper determinations. The procedures used by BC for all analytical work are
described as follows:

- All initial gold determinations for all samples submitted were by fire
  assay, using a 50 gram charge and an atomic absorption spectroscopy (AAS)
  finish. For samples that assayed 5.0 grams per tonne of gold or greater, the
  samples were re-run by fire assay using a gravimetric finish. Samples falling
  in the greater than 3.0 grams per tonne of gold and less than 5.0 grams per
  tonne of gold range were re-run using the initial method; and
- Copper and initial silver analyses were by four-acid digestion followed by
  AAS finish. For silver analyses returning values greater than 50 grams per
  tonne, the analyses were repeated using fire assay with a gravimetric finish.

Sample
preparation and analyses for the Pascua side were managed out of La Serena,
Chile, while similar activities for the Lama portion of the deposit were
conducted out of San Juan, Argentina. On the Pascua side, sample preparation
initially was done by Geoanalitica in La Serena. The sample preparation
procedures used by St. Joe/CMSA and CMN prior to LACs acquisition of the
Pascua-Lama Project are unknown, although all St. Joe/CMSA samples reportedly
were prepared at St. Joes in-house laboratory facility in La Serena, Chile.
During LACs tenure as owner of CMN and the Pascua-Lama Project, sample
preparation was moved to the exploration camp at the project site.

The
quality assurance and quality control program (QA/QC) put in place after Barricks acquisition of the Pascua-Lama deposit included the submission of pulp
duplicates every 20th sample to CIMM in Santiago and BC in La Serena
for Lama samples; to Acme and BC for Pascua samples. Pascua coarse reject
duplicates were sent to Geoanalytica for analysis and Lama duplicate coarse
rejects were sent to CIMM in Santiago. The QA/QC control of the samples of the
2005-2006 drilling season was made under QA/QC Barrick corporate guidelines and
in keeping with Barricks independent consultants recommendations. In a batch
of 75 samples, nine control samples were inserted, divided between standards,
blanks and duplicates. The results were mostly accepted.

Based
on checks made by SRK on a portion of the QA/QC database, the results show that
the sampling, preparation and analysis of samples is being carried out in an
acceptable manner in keeping with recognized industry standards of practice.

Security of Samples

All
samples remain in the possession of CMN employees during transport from the
drill rigs and/or sample sites (surface trenches and underground workings) to
the on-site and third party preparation facilities. Transfer of pulps from the
sample preparation facilities to the CIMM laboratory in Santiago was by either
common carrier in sealed containers or by CMN, Geoanalytica or Acme employees.

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Mineral Reserve and Mineral Resource Estimates

See
Description of the Business  Technical Information  Summary of Mineral
Reserves and Mineral Resources for the estimated Mineral Reserves and Mineral
Resources (silver only, 25%) for the Pascua-Lama Project as of December 31,
2011.

Mining Operations

The Pascua-Lama Project has been designed as an open pit mine feeding two primary
crushers. The process facilities, located approximately 7.5 kilometres to the
southeast, are connected to the primary crushers via a tunnel and overland
conveyor.

Mine
service facilities (truck shop and fuel storage) are located adjacent to the
primary crushers. The primary waste rock facility is located at the head of the
Rio del Estrecho valley.

The
equipment was selected for a standard open pit mining operation with
conventional drill, blast, load and haul, considering bulk excavation of waste
using large rope shovels, and bulk-selective loading of ore using front end
loaders and hydraulic excavators. A mining fleet commencing with diesel powered
equipment has been selected, supplemented by lower cost electric shovels as the
pit is developed.

The
drilling equipment will consist of four electric units drilling 270 millimetre
diameter blastholes for Pascua and two units set up for 229 millimetre diameter
blastholes for Esperanza. Pre-split drilling will be applied in the final pit
walls and will be drilled with 165 millimetre diameter holes. Blasting design
assumes the use of heavy ammonium nitrate/fuel oil as the primary blasting agent
with emulsion used in areas requiring higher strength or water resistance.

The
preferred option is a fleet of electric rope shovels for the majority of loading
requirements supported by hydraulic excavators and front-end loaders for ore
loading and secondary requirements. There will be two 60 cubic metre electric
rope shovels assigned to waste loading, plus three 42 cubic metre diesel
hydraulic shovels and three 17 cubic metre front end loaders assigned to ore and
stock re-handling. Performance for a 60 cubic metre shovel in waste is estimated
at 70,000 tonnes per day while the 42 cubic metre shovels performance is
estimated at 65,000 tonnes per day. According to the current construction plan,
electrical power will be available at the mine only at the second quarter of the
pre-stripping, so this first stage of exploitation will only be handled with the
hydraulic shovels and front-end loaders. The electric supply has to consider
topographic and weather conditions (winds, snow), avoid exposed aerial lines in
problematic areas and will depend primarily on trailing cable.

The
truck fleet consists of 30 units, each with 290 tonne capacity. Calculation of
the number of trucks is based upon the detailed estimate of hauling distances
for every type of material per phase and period.

The
ancillary equipment includes bulldozers, wheel dozers, graders and water trucks.
The number of auxiliary units is a function of the number of units in the
primary loading and hauling fleet, as well as the total rock movement in the
pit.

Mine
planning will need to schedule ore loading operations in order to batch
refractory and non-refractory ore; in addition operational stockpiles need to be
scheduled with consideration given to variable ore exposure within active mine
benches. The stockpiles will be segregated into refractory and non-refractory
ore and a total of 130 million tonnes is planned to be sent to stockpile and
reclaimed during the mine life. This will necessitate operational stockpile
re-handling (up to 30% re-handling of ore feed). Stockpile planning needs to
consider this requirement in addition to that associated with winter mine
operations. Operational stockpile locations and sizes will be adjusted to the
requirements of short- and medium-term mine plans where possible will be located
close to the primary crusher. The ability to separate various ore types, as well
as the tracking of ore grades going to and coming out of stockpile, will need
careful consideration form the short-term mine planning group in order to
achieve the desired processing requirements.

Process Plant

The
plant is designed to operate 24 hours per day, 365 days per year and with an
operating availability of 90%, which reflects the impact of high altitude,
difficult weather conditions, complex treatment circuit and scheduling requirements of the two main ore types. Plant capacity is
45,000 tonnes per day, that is, 16.4 million tonnes per year.

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The
mine, treatment plant, infrastructure and associated facilities straddle the
Chile/Argentina border. The primary crusher installation is located in the Pascua area in Chile at an elevation of 4,750 metres above sea level and the
process plant is located in the Lama area in Argentina in the Rio Turbio valley,
at approximately 4,000 metres above sea level. These process areas are connected
by a single ore conveyor system, most of which is located in a tunnel connecting
the two sites.

Ores
are termed refractory when gold and silver, which are mostly associated with
the sulphide minerals, have a very poor metallurgical response to direct
cyanidation with respect to both low precious metal recovery and high cyanide
consumption. Ores that are termed non-refractory are amenable to direct
cyanidation, and high precious metal recoveries are obtained with low to
moderate cyanide consumption. An initial ranking system that produced eight ore
categories was further refined to a four-part description according to the
following criteria:

- Non-refractory: oxide ore (less than 3% S) which contains only small
  amounts of soluble minerals (less than 0.75% iron (sol) and less than 0.03%
  copper (sol)). Washing is not required to achieve acceptable metallurgical
  results but is beneficial to operating costs as it reduces cyanide consumption
  (removes soluble cyanide consuming components);
- Non-refractory wash: oxide ore (less than 3% S) which contains significant
  amounts of soluble minerals (greater than 0.75% iron (sol) and/or > 0.03%
  copper (sol)). Washing is required to remove the soluble components prior to
  cyanidation to achieve acceptable metallurgical results;
- Refractory sulphide enargite: sulphide ore (greater than 3% S) which
  contains significant enargite (copper - copper (sol) greater than 0.03%) and
  soluble sulphate minerals. This ore type requires washing and flotation of a
  copper/gold/silver concentrate and cyanidation of flotation tails to achieve
  acceptable metallurgical results; and
- Refractory sulphide pyrite: sulphide ore (greater than 3% S) in which
  pyrite is the major sulphide mineral and contains only small amounts of copper
  sulphide minerals (copper - copper (sol) less than 0.03%). A significant
  portion of the gold and silver are associated with pyrite and are locked up,
  or refractory to cyanidation. This ore type requires washing, flotation and
  cyanidation of flotation tails to achieve acceptable metallurgical results.
  The gold-silver-pyrite concentrate has low copper values.

Post-2006,
the process operating strategy and plant design considered that as all material
is ground and washed, only two ore classifications apply: non-refractory ore is
subject to direct leaching, and refractory ore is floated prior to leaching of
the flotation tails. The final products from these circuits are: silver-gold doré bullion from the non-refractory circuit, and silver-gold doré bullion and
copper-gold-silver concentrate from the refractory circuit.

Ore
is derived from open pit mining operations from the Pascua and Esperanza areas
of the deposit. Initial pit development from these areas delivers non-refractory
ore to the process plant for the first two full years of operation. Thereafter,
mining and ore delivery to the primary crusher and downstream treatment
facilities is in the ratio of 2:1 for non-refractory and refractory ores
respectively, in accordance with the mine plan and reserve model. The refractory
ore is first scheduled to be treated in year three of operations.

The
principal processing stages for this circuit are: primary crushing, autogenous/ball milling (wet grinding), counter current decant (CCD) washing,
pre-aeration and oxygen enhanced cyanide leaching, CCD thickening for pregnant
solution recovery, cyanide destruction, Merrill Crowe zinc precipitation,
mercury retorting, and smelting. Additional process stages for refractory ore
treatment are: roughing/cleaner/scavenger flotation with regrinding of rougher
concentrate, final copper concentrate thickening, filtering and bagging.

Both
the non-refractory and refractory ore types are ground and washed, with the
non-refractory ore subject to direct cyanidation only. The washed refractory ore
is subjected to flotation with float tails then proceeding to cyanidation. The
final products from the process, available for export, are silver-rich doré
bullion and a gold-silver rich (low grade) copper concentrate.

Based
on the investigations to date, the Pascua-Lama gold-silver-copper concentrate is
marketable as third party feed to a select few custom copper smelters. Barrick
will look to sell 100% of the anticipated concentrate production under long-term off-take agreements to ensure saleability of 100% of
the Pascua-Lama Projects high value complex material in all market conditions.
Agreements will include tonnage ranges covering all forecasted fluctuations in
annual concentrate production.

- 56 -

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Environment

The Pascua-Lama project environmental permit was submitted to both Chilean and
Argentine authorities in 2000. The Pascua-Lama project received Environmental
Impact Assessment (EIA) approval from appropriate authorities in Chile in May
2001 and, in December 2004, Barrick submitted a second EIA in respect of
modifications of the project. In 2005, three addenda were submitted in response
to questions and concerns raised by the communities and authorities. Barrick
received approval of the EIA from Chilean environmental regulatory authorities
in February 2006.

As
noted above, the Environmental Impact Statement (EIS) prepared for the portion
of the mine, mill and tailings storage facility for the project located in
Argentina was submitted in 2000 and updated in 2004 to incorporate the
cumulative impacts of the construction and development of the nearby Veladero
project. This updated EIS was submitted in November 2004. In December 2006,
Barrick received approval of the EIS from the San Juan, Argentina, provincial
environmental regulatory authority. Having obtained approval of the EIS, Barrick
will also need to obtain various sectoral permits for the construction and
operation of the project. In April 2009, Barrick submitted a first biannual
update of the EIS to the Province of San Juans environmental regulatory
authority, which was approved in December 2009. In May 2010, Barrick submitted a
second biannual update of the EIS to the Province of San Juans environmental
regulatory authority and in 2011 filed a third update. Additional project
related infrastructure and facilities were included and considered in these
updates. Barrick is currently awaiting approval of the EIS updates the related
sectorial permits are expected to be obtained in due course.

In
2007, the Huascoaltinos Agricultural Community filed a petition against the
State of Chile before the Inter-American Commission on Human Rights (IACHR)
claiming that certain of the Communitys rights under the American Convention of
Human Rights had been violated as a result of, amongst other things, the States
issuance of certain environmental approvals relating to the project. The case
has been briefed by the petitioner Community and the respondent State before the
IACHR. Barrick is not a party to the proceedings. Depending on the decision
reached by the IACHR, the IACHR could, amongst other things, potentially impose
precautionary measures on the State or recommend alterations to the conditions
under which the project was approved or reopen its environmental review. Any
such decision could limit or suspend Barricks ability to develop the project,
and could potentially affect Barricks ability to complete the project as it is
currently designed.

The
current design of the facilities was constrained by the requirement of the
Chilean environmental authorities to not adversely affect the glaciers in the
area. Argentina recently passed a federal glacier protection law that restricts
mining in areas on or near the nation's glaciers. Refer to Barrick
Transaction, page 5.

There
is an appropriate environmental management plan for the Pascua-Lama Project,
covering the management and monitoring of all the environmental components that
may be impacted by the Pascua-Lama Project. The reviewed information shows that
the water associated with the waste dump in the Pascua area will be
appropriately managed, in compliance with environmental and safety standards.

At
December 31, 2011, the recorded amount of estimated future reclamation and
closure costs that were recorded under IFRS as defined by IAS 37, and that have
been updated each reporting was $51 million.

DIVIDENDS

On
March 3, 2011, the Company announced that its Board of Directors had approved an
inaugural quarterly dividend of $0.03 per Common Share. The initial quarterly
dividend of $0.03 per share was paid to holders of record of the Common Shares
as of the close of business on March 21, 2011. A second quarterly dividend of
$0.03 per share was paid to holders of record of the Common Shares as of the
close of business on June 20, 2011. A third quarterly dividend of $0.03 per
share was paid to the holders of record of the Common Shares as of the close of
business on September 20, 2011. A fourth quarterly dividend of $0.09 per share
was paid to the holders of record of the Common Shares as of the close of
business on November 23, 2011. The total dividends paid during 2011 was $0.18
per Common Share.

In
November 2011, the Company announced that it had adopted a new dividend policy
that linked quarterly dividend payments to operating cash flows in the prior quarter,
such that the quarterly dividend per Common Share will be equal to 20% of the
cash generated by operating activities in the previous quarter divided by the
Companys outstanding Common Shares at the time the dividend is approved, all
rounded to the nearest cent. The declaration, timing, amount and payment of
dividends remains at the discretion of the Board of Directors and will depend on
the Companys cash requirements, future prospects and other factors deemed
relevant by the Board of Directors.

- 57 -

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DESCRIPTION OF CAPITAL STRUCTURE

Authorized Capital

The
authorized share capital of the Company consists of an unlimited number of
Common Shares and an unlimited number of preference shares (the Preference
Shares), issuable in series. As of March 22, 2012, 353,563,679 Common Shares and no
Preference Shares are issued and outstanding.

Common Shares

Holders
of Common Shares are entitled to receive notice of any meetings of shareholders
of the Company, to attend and to cast one vote per Common Share at all such
meetings. Holders of Common Shares do not have cumulative voting rights with
respect to the election of directors and, accordingly, holders of a majority of
the Common Shares entitled to vote in any election of directors may elect all
directors standing for election. Holders of Common Shares are entitled to
receive on a pro rata basis such dividends, if any, as and when declared by the
Companys Board of Directors at its discretion from funds legally available therefor and upon the liquidation, dissolution or winding up of the Company are
entitled to receive on a pro rata basis the net assets of the Company after
payment of debts and other liabilities, in each case subject to the rights,
privileges, restrictions and conditions attaching to any other series or class
of shares ranking senior in priority to or on a pro rata basis with the holders
of Common Shares with respect to dividends or liquidation. There are currently
no other series or class of shares which rank senior in priority to the Common
Shares. The Common Shares do not carry any pre-emptive, subscription, redemption
or conversion rights, nor do they contain any sinking or purchase fund
provisions.

Preference Shares

The
Preference Shares may, at any time or from time to time, be issued in one or
more series. The Companys Board of Directors shall fix before issue, the number
of, the consideration per share of, the designation of, and the provisions
attaching to the shares of each series. Except as required by law or as
otherwise determined by the Companys Board of Directors in respect of a series
of shares, the holder of a Preference Share shall not be entitled to vote at
meetings of shareholders. The Preference Shares of each series rank on a
priority with the Preference Shares of every other series and are entitled to
preference over the Common Shares and any other shares ranking subordinate to
the Preference Shares with respect to priority and payment of dividends and
distribution of assets in the event of liquidation, dissolution or winding-up of
the Company.

TRADING PRICE AND VOLUME

Common Shares

The
Common Shares are listed and posted for trading on the TSX and the NYSE under
the symbol SLW. The following table sets forth information relating to the
trading of the Common Shares on the TSX for the months indicated.

|              | High  | Low   |           
|------------- | ----- | ----- | ----------
|Month         | (C$)  | (C$)  | Volume    
|              |       |       |           
|January 2011  | 38.28 | 28.85 | 49,190,670
|February 2011 | 41.48 | 31.01 | 39,639,401
|March 2011    | 45.02 | 37.72 | 52,209,277
|April 2011    | 45.50 | 37.11 | 52,674,772
|May 2011      | 37.89 | 31.33 | 48,126,127
|June 2011     | 36.05 | 29.42 | 40,904,574

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|               | High  | Low   |           
|-------------- | ----- | ----- | ----------
|Month          | (C$)  | (C$)  | Volume    
|               |       |       |           
|July 2011      | 38.46 | 31.63 | 34,486,114
|August 2011    | 40.00 | 31.87 | 39,596,151
|September 2011 | 42.49 | 30.29 | 69,626,252
|October 2011   | 36.18 | 27.51 | 41,009,015
|November 2011  | 37.88 | 31.83 | 37,047,797
|December 2011  | 34.97 | 27.51 | 28,765,366

The price of the Common Shares as
quoted by the TSX at the close of business on December 30, 2011 was C$29.50 and
on March 22, 2012 was C$33.66.

U.S. Dollar Warrants

The U.S. dollar common share
purchase warrants (the U.S. Dollar Warrants) of the Company (each of which is
exercisable to acquire one Common Share at a price of $20.00 until September 5,
2013) are listed and posted for trading on the TSX under the symbol SLW.WT.U.
The following table sets forth information relating to the trading of the U.S.
Dollar Warrants on the TSX for the months indicated.

|               | High  | Low   |        
|-------------- | ----- | ----- | -------
|Month          | ($)   | ($)   | Volume 
|               |       |       |        
|January 2011   | 24.90 | 15.61 | 146,531
|February 2011  | 24.10 | 17.22 | 227,129
|March 2011     | 27.50 | 20.50 | 654,114
|April 2011     | 28.11 | 19.91 | 957,022
|May 2011       | 21.01 | 15.6  | 284,392
|June 2011      | 19.00 | 13.00 | 165,104
|July 2011      | 21.94 | 16.00 | 114,718
|August 2011    | 22.15 | 16.00 | 105,007
|September 2011 | 23.65 | 13.40 | 217,942
|October 2011   | 17.50 | 11.90 | 101,538
|November 2011  | 19.00 | 13.80 | 94,829 
|December 2011  | 16.01 | 10.75 | 76,466 

The
price of the U.S. Dollar Warrants as quoted by the TSX at the close of business
on December 30, 2011 was $11.76 and on March 22, 2012 was $15.02.

DIRECTORS AND OFFICERS

The
following table sets forth the name, province/state and country of residence, position(s) held with the Company and principal occupation of each person who is
a director and/or an executive officer of the Company as of the date of this
annual information form.

|Name,                                                       |                                                               |                     
|----------------------------------------------------------- | ------------------------------------------------------------- | --------------------
|Province/State and                                          |                                                               |                     
|Country of Residence                                        | Position(s) with the Company                                  | Principal Occupation
|                                                            |                                                               |                     
|Douglas M. Holtby (2)
      British Columbia,
      Canada  | Chairman of the Board and Director since April
      2006 (4) | Corporate Director  
|                                                            |                                                               |                     
|Lawrence I. Bell (3)
      British Columbia,
      Canada   | Director since April 2006 (4)                                 | Corporate Director  
|                                                            |                                                               |                     
|George L. Brack (1)(2)
      British Columbia,
      Canada | Director since November 2009 (4)                              | Corporate Director  

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|Name,                                                |                                                                                   |                                                                             
|---------------------------------------------------- | --------------------------------------------------------------------------------- | ----------------------------------------------------------------------------
|Province/State and                                   |                                                                                   |                                                                             
|Country of Residence                                 | Position(s) with the Company                                                      | Principal Occupation                                                        
|John A. Brough
      (1)(3)Ontario, Canada           | Director since October 2004
      (4)                                             | Corporate Director                                                          
|                                                     |                                                                                   |                                                                             
|R. Peter Gillin
      (1)(2)Ontario, Canada          | Director since October 2004
      (4)                                             | Corporate Director                                                          
|                                                     |                                                                                   |                                                                             
|Eduardo Luna Mexico City,
      Mexico               | Director since December 2004
      (4)                                            | Corporate Director                                                          
|                                                     |                                                                                   |                                                                             
|Wade D. Nesmith
      (3)British Columbia, Canada    | Director since October 2004
      (4)                                             | Corporate Director                                                          
|                                                     |                                                                                   |                                                                             
|Randy V. J. Smallwood
      British Columbia, Canada | President, Chief Executive
      Officer and Director Director since May 2011 (4) | President and Chief Executive
      Officer of Silver Wheaton               
|                                                     |                                                                                   |                                                                             
|Gary D. Brown British
      Columbia, Canada         | Senior Vice President and Chief
      Financial Officer                           | Senior Vice President and Chief
      Financial Officer of Silver Wheaton   
|                                                     |                                                                                   |                                                                             
|Curt D. Bernardi British
      Columbia, Canada      | Senior Vice President, Legal
      and Corporate Secretary                        | Senior Vice President, Legal
      and Corporate Secretary of Silver Wheaton
|                                                     |                                                                                   |                                                                             
|Brad J. Kopp British
      Columbia, Canada          | Senior Vice President, Investor
      Relations                                   | Senior Vice President, Investor
      Relations of Silver Wheaton           

|(1) | Member of the Audit Committee.                                                                                                                                                               
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Member of the Human Resources Committee.                                                                                                                                                     
|(3) | Member of the Governance and Nominating
  Committee.                                                                                                                                         
|(4) | Directors are elected at each annual meeting of Silver
      Wheatons shareholders and serve as such until the next annual meeting or
      until their successors are elected or appointed.

The
principal occupations, businesses or employments of each of the Companys
directors and executive officers within the past five years are disclosed in the
brief biographies set forth below.

Douglas
M. Holtby  Chairman of the Board and Director.Mr. Holtby is currently
the Vice Chairman of the Board and Lead Director of Goldcorp and President and
Chief Executive Officer of three private investment companies, Arbutus Road
Investments Inc., Majick Capital Inc. and Holtby Capital Corporation. From June
1989 to June 1996, Mr. Holtby was President, Chief Executive Officer and a
director of WIC Western International Communications Ltd., from 1989 to 1996, he
was Chairman of Canadian Satellite Communications Inc., from 1998 to 1999, he
was a Trustee of ROB.TV and CKVU, from 1974 to 1989, he was President of
Allarcom Limited and, from 1982 to 1989, he was President of Allarcom Pay
Television Limited. Mr. Holtby is a Fellow Chartered Accountant, and a graduate
of the Institute of Corporate Directors - Director Education Program at the
University of Toronto, Rotman School of Management.

Lawrence
I. Bell  Director. Mr. Bell served as the non-executive Chairman of
British Columbia Hydro and Power Authority until December 2007. From August 2001
to November 2003, Mr. Bell was Chairman and Chief Executive Officer of British
Columbia Hydro and Power Authority and, from 1987 to 1991, he was Chairman and
Chief Executive Officer of British Columbia Hydro and Power Authority. He is
also a director of Capstone Mining Corp., International Forest Products Limited,
Matrix Asset Management Inc. and Goldcorp and is former Chairman of the
University of British Columbia Board of Directors and former Chairman of Canada
Line (Rapid Transit) Project. Prior to these positions, Mr. Bell was Chairman
and President of the Westar Group and Chief Executive Officer of Vancouver City
Savings Credit Union. In the provinces public sector, Mr. Bell has served as
Deputy Minister of Finance and Secretary to the Treasury Board. He holds a
Bachelor of Arts degree and an Honours Ph.D. from the University of British
Columbia. He also holds a Masters of Arts degree from San José State University
and is a Fellow of the Institute of Corporate Directors.

George
L. Brack  Director. Mr. Bracks 26-year career in the mining industry
has focused on investment banking and corporate development, specifically
identifying, evaluating and executing strategic mergers and acquisitions, and the provision of equity financing. Until January 2009, Mr.
Brack acted as the Managing Director and Industry Head, Mining Group, of Scotia
Capital. Prior to joining Scotia Capital in 2006, Mr. Brack spent seven years as
President of Macquarie North America Ltd., an investment banking firm
specializing in merger and acquisition advice. Previous to that, Mr. Brack was
Vice President, Corporate Development at Placer Dome Inc., was Vice President of
the investment banking group at CIBC Wood Gundy, and worked in Rio Algoms
Corporate Development department. Mr. Brack holds an MBA from York University, a
BASc in Geological Engineering from the University of Toronto and the CFA
designation.

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John
A. Brough  Director. Mr. Brough had been President of both Torwest,
Inc. and Wittington Properties Limited, real estate development companies, from
1998 to December 31, 2007, upon his retirement. Prior thereto, from 1996 to
1998, Mr. Brough was Executive Vice President and Chief Financial Officer of
iSTAR Internet, Inc. Prior thereto, from 1974 to 1996, he held a number of
positions with Markborough Properties, Inc., his final position being Senior
Vice President and Chief Financial Officer which position he held from 1986 to
1996. Mr. Brough is an executive with over 30 years of experience in the real
estate industry. He is currently a director and Chairman of the Audit and Risk
Committee of Kinross Gold Corporation, a director and Chairman of the Audit
Committee and Lead Director of First National Financial Corporation, a director
and Chairman of the Governance, Compensation and Nominating Committee of
TransGlobe Apartment REIT, and a director and Chairman of the Audit Committee of
Canadian Real Estate Investment Trust. He holds a Bachelor of Arts degree
(Economics) from the University of Toronto and is a Chartered Accountant. He is
also a graduate of the Institute of Corporate Directors  Director Education
Program at the University of Toronto, Rotman School of Management. Mr. Brough is
a member of the Institute of Corporate Directors and the Canadian Institute of
Chartered Accountants.

R.
Peter Gillin  Director. Mr. Gillin was Chairman and Chief Executive
Officer of Tahera Diamond Corporation, a diamond exploration, development and
production company, from October 2003 to September 2008 and Chief Restructuring
Officer until December 2008. Since 2004, Mr. Gillin has been a member of the
Independent Review Committee of TD Asset Management Inc. and, since December
2005, a director of Trillium Health Care Products Inc. (a private company). Mr.
Gillin was appointed a director of Sherritt International Corporation January 1,
2010 and Dundee Precious Metals Inc. in December 2009. From April 2008 to March
2009, Mr. Gillin was a director of HudBay Minerals Inc. From November 2002 to
May 2003, Mr. Gillin was President and Chief Executive Officer of Zemex
Corporation, an industrial minerals producer, and had been a director of that
company since 1999. From 1996 to 2002, Mr. Gillin was Vice Chairman and a
director of N.M. Rothschild & Sons Canada Limited, an investment bank, and,
from 2001 to 2002, was Acting Chief Executive Officer. He holds a HBA degree
from the Richard Ivey School of Business at the University of Western Ontario
and is a Chartered Financial Analyst. He is also a graduate of the Institute of
Corporate Directors  Director Education Program at the University of Toronto,
Rotman School of Management and has earned the designation of ICD.D. from the
Institute of Corporate Directors.

Eduardo
Luna  Director. Mr. Luna is currently Director, President and CEO of
Rochester Resources Ltd., Advisor and Director of Primero Mining Corp. and
advisor of Mercator Minerals Ltd. Mr. Luna was Chairman of the Company from
October 2004 to May 2009 (and was Interim Chief Executive Officer of the Company
from October 2004 to April 2006), Executive Vice President of Wheaton River from
June 2002 to April 2005, Executive Vice President of Goldcorp from March 2005 to
September 2007 and President of Luismin, S.A. de C.V. from 1991 to 2007. He
holds a degree in Advanced Management from Harvard University, an MBA from
Instituto Tecnologico de Estudios Superiores de Monterrey and a Bachelor of
Science in Mining Engineering from Universidad de Guanajuato. He held various
executive positions with Minera Autlan for seven years and with Industrias
Peñoles for five years. He is the former President of the Mexican Mining Chamber
and the former President of the Silver Institute. He serves as Chairman of the
Advisory Board of the Faculty of Mines at the University of Guanajuato and as a
board member of the Mineral Resources Council in Mexico.

Wade
D. Nesmith  Director.Mr. Nesmith is currently Chairman of Primero
Mining Corp. and from 2004 to 2009 was associate counsel with Lang Michener LLP,
a law firm where he previously practiced as a partner from 1993 to 1998. He is
also Chairman of Selwyn Resources Ltd. Mr. Nesmith has served on the boards of,
among others, Geovic Mining Corp., Polymer Group, Inc., Broadpoint Securites,
Inc., and Westport Innovations, where he was also a senior officer of the
Company. He also served as the Executive Director (then Superintendent of
Brokers) for the Province of British Columbia. Mr. Nesmith received his LLB from
Osgoode Hall Law School in 1977.

Randy
V. J. Smallwood  President, Chief Executive Officer and Director.Mr.
Smallwood holds a geological engineering degree from the University of British
Columbia, and is one of the founding members of Silver Wheaton. In 2007, he
joined Silver Wheaton full time as Executive Vice President of Corporate
Development, primarily focusing on growing the Company through the evaluation
and acquisition of silver stream opportunities. In January 2010 he was appointed President, and in April 2011 he was appointed Silver
Wheaton's Chief Executive Officer. Mr. Smallwood originally started as an
exploration geologist with Wheaton River Minerals Ltd., and in 2001 was promoted
to Director of Project Development, his role through its 2005 merger with
Goldcorp. Before joining the original Wheaton River group in 1993, Mr. Smallwood
also worked with Homestake Mining Company, Teck Corp. and Westmin Resources. Mr.
Smallwood was an instrumental part of the team that built Wheaton River /
Goldcorp into one of the largest, and more importantly most profitable gold
companies in the world, and he is now focused on continuing to add to the
impressive growth profile of Silver Wheaton.

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Gary
D. Brown  Senior Vice President and Chief Financial Officer.Mr. Brown
is currently the Senior Vice President and Chief Financial Officer of Silver
Wheaton having joined the Company in June 2008. Prior to Silver Wheaton, he was
the Chief Financial Officer of TIR Systems Ltd. from September 2005 to July
2007. He has also held senior finance roles with CAE Inc., Westcoast Energy
Inc., and Creo Inc. Mr. Brown brings almost 20 years of experience as a finance
professional and holds professional designations as a Chartered Accountant and a
Chartered Financial Analyst as well as having earned a Masters Degree in
Accounting from the University of Waterloo.

Curt
D. Bernardi  Senior Vice President, Legal and Corporate Secretary.Mr.
Bernardi has been practicing law since his call to the British Columbia bar in
1994. He worked for the law firm of Blake, Cassels & Graydon in the areas of
corporate finance, mergers and acquisitions and general corporate law until
leaving to join Westcoast Energy in 1998. Following the acquisition of Westcoast
Energy by Duke Energy in 2002, Mr. Bernardi continued to work for Duke Energy
Gas Transmission as in-house legal counsel, working primarily on
reorganizations, mergers and acquisitions, joint ventures and general
corporate/commercial work. In 2005, Mr. Bernardi joined Union Gas as their
Director, Legal Affairs and was responsible for legal matters affecting Union
Gas. He obtained his Bachelor of Commerce from the University of British
Columbia and his Bachelor of Law from the University of Toronto.

Brad
J. Kopp  Senior Vice President, Investor Relations.Mr. Kopp is
currently the Senior Vice President, Investor Relations of Silver Wheaton having
joined the Company in 2008. Prior to joining Silver Wheaton, he was Manager of
Corporate Development at Sherwood Copper Corp. Prior to this, Mr. Kopp worked
for over nine years in the brokerage industry. His roles included Trading
Manager of the BC and Yukon region of BMO Investorline Inc. and Assistant Branch
Manager at Research Capital Corp. He is a member of both the Market Technicians
Association and the Board of the Silver Institute. Mr. Kopp earned his Bachelor
of Commerce with Great Distinction from the University of Saskatchewan, and in
2001 successfully completed the Chartered Market Technicians (CMT) Program.

As
at December 31, 2011, the directors and executive officers of Silver Wheaton, as
a group, beneficially owned, directly and indirectly, or exercised control or
direction over 431,064 Common Shares, representing less than one percent of the
total number of Common Shares outstanding before giving effect to the exercise
of options or warrants to purchase Common Shares held by such directors and
executive officers. The statement as to the number of Common Shares beneficially
owned, directly or indirectly, or over which control or direction is exercised
by the directors and executive officers of Silver Wheaton as a group is based
upon information furnished by the directors and executive officers.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

To the knowledge of the Company, no director or executive
officer of the Company is, or within ten years prior to the date hereof has
been, a director, chief executive officer or chief financial officer of any
company (including the Company) that, (i) was subject to a cease trade order, an
order similar to a cease trade order or an order that denied the relevant
company access to any exemption under securities legislation, that was in effect
for a period of more than 30 consecutive days, that was issued while the
director or executive officer was acting in the capacity as director, chief
executive officer or chief financial officer; or (ii) was subject to a cease
trade order, an order similar to a cease trade order or an order that denied the
relevant company access to any exemption under securities legislation, that was
in effect for a period of more than 30 consecutive days, that was issued after
the director or executive officer ceased to be a director, chief executive
officer or chief financial officer and which resulted from an event that
occurred while that person was acting in the capacity as director, chief
executive officer or chief financial officer, other than: (a) Mr. Brough who is
a director of a mining company that was subject to a management cease trade
order against the directors and officers of the mining company from April 2005
to February 2006 in connection with such companys failure to file audited
financial statements for the year ended December 31, 2004. The missed filings
resulted from questions raised by the United States Securities and Exchange
Commission (the SEC) about certain accounting practices related to the
accounting for goodwill. When the SEC accepted the mining companys proposed
treatment, the mining company made its filings, and the cease trade orders were
revoked; and (b) Mr. Gillin who was a director of, and Chairman and Chief
Executive Officer of Tahera Diamond Corporation (Tahera) from October 2003 to December 2008, a
company that filed for protection under the Companies' Creditors Arrangement Act
(Canada) ("CCAA") with the Ontario Superior Court of Justice on January 16,
2008. As a consequence of its financial difficulties, Tahera failed to file
financial statements for the year ended December 31, 2007 and subsequent
financial periods. As a result, Tahera was delisted from the Toronto Stock
Exchange in November 2009 and issuer cease trade orders were issued in 2010 by
the securities regulatory authorities of Ontario, Quebec, Alberta and British
Columbia, which orders have not been revoked. Tahera subsequently sold its tax
assets to Ag Growth International and certain properties, including the Jericho
diamond mine, to Shear Minerals Ltd., and the monitoring process under CCAA
concluded by order of the Superior Court of Justice in September, 2010.

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To the knowledge of the Company, no director or executive
officer of the Company, or a shareholder holding a sufficient number of
securities of the Company to affect materially control of the Company, is, or
within ten years prior to the date hereof has been, a director or executive
officer of any company (including the Company) that, while that person was
acting in that capacity, or within a year of that person ceasing to act in that
capacity, became bankrupt, made a proposal under any legislation relating to
bankruptcy or insolvency or was subject to or instituted any proceedings,
arrangement or compromise with creditors or had a receiver, receiver manager or
trustee appointed to hold its assets, other than: (a) Mr. Nesmith who was a
director of an automotive company which applied for Chapter 11 bankruptcy
protection in December 2004 and emerged from Chapter 11 bankruptcy protection in
March 2005; and (b) Mr. Gillin who was a director of, and Chairman and Chief
Executive Officer of Tahera from October 2003 to December 2008, a company that
filed for protection under the Companies' Creditors Arrangement Act (Canada)
("CCAA") with the Ontario Superior Court of Justice on January 16, 2008. Tahera
subsequently sold its tax assets to Ag Growth International and certain
properties, including the Jericho diamond mine, to Shear Minerals Ltd., and the
monitoring process under CCAA concluded by order of the Superior Court of
Justice in September, 2010.

To
the knowledge of the Company, no director or executive officer of the Company,
or a shareholder holding a sufficient number of securities of the Company to
affect materially control of the Company, has, within ten years prior to the
date hereof, become bankrupt, made a proposal under any legislation relating to
bankruptcy or insolvency, or become subject to or instituted any proceedings,
arrangement or compromise with creditors, or had a receiver, receiver manager or
trustee appointed to hold the assets of the director, executive officer or
shareholder.

To
the knowledge of the Company, no director or executive officer of the Company,
or a shareholder holding a sufficient number of securities of the Company to
affect materially the control of the Company, has been subject to (i) any
penalties or sanctions imposed by a court relating to securities legislation or
by a securities regulatory authority or has entered into a settlement agreement
with a securities regulatory authority; or (ii) any other penalties or sanctions
imposed by a court or regulatory body that would likely be considered important
to a reasonable investor in making an investment decision.

Conflicts of Interest

To
the best of Silver Wheatons knowledge, and other than as disclosed in this
annual information form, there are no known existing or potential material
conflicts of interest between Silver Wheaton and any director or officer of
Silver Wheaton, except that certain of the directors and officers serve as
directors and officers of other public companies and therefore it is possible
that a conflict may arise between their duties as a director or officer of
Silver Wheaton and their duties as a director or officer of such other
companies. Certain of the directors and officers of the Company also serve as
directors and/or officers of other companies involved in natural resource
exploration, development and mining operations and consequently there exists the
possibility for such directors and officers to be in a position of conflict. Any
decision made by any of such directors and officers will be made in accordance
with their duties and obligations to deal fairly and in good faith with a view
to the best interests of the Company and its shareholders. In addition, each of
the directors is required to declare and refrain from attending the portion of
the meeting dedicated to discussing any matter in which such directors may have
a conflict of interest or voting on such matter in accordance with the
procedures set forth in the Business Corporations Act(Ontario) and other
applicable laws. See Interest of Management and Others in Material
Transactions.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Other
than as described below and elsewhere in this annual information form, since
January 1, 2009, no director, executive officer or 10% shareholder of the
Company or any associate or affiliate of any such person or company, has or had
any material interest, direct or indirect, in any transaction that has
materially affected or will materially affect the Company or any of its
subsidiaries, except as follows:

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| | (1) | Each of Messrs. Bell and Holtby are directors of Goldcorp
      Inc. (Goldcorp), which is the owner of the Peñasquito mine and the Los
      Filos mine, and was the owner of the San Dimas mine until August 6,
      2010;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (2) | Mr. Nesmith is a director of Primero and holds a
      significant equity position in Primero, which is the owner of the San
      Dimas mine, and until March 15, 2012, Mr. Nesmith was the Executive
      Chairman of Primero;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (3) | Mr. Luna is a director of Primero and holds a significant
      equity position in Primero, which is the owner of the San Dimas mine, and
      until November 30, 2011, Mr. Luna was the Executive Vice President and
      President, Mexico; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (4) | On August 6, 2010, Goldcorp completed the sale of the San
      Dimas mine to Primero. In conjunction with the sale, the Company amended
      its silver purchase agreement relating to the mine. The term of the silver
      purchase agreement, as it relates to San Dimas, has been extended to the
      life of mine. During the first four years following closing of the
      transaction, Primero will deliver to Silver Wheaton a per annum amount
      equal to the first 3.5 million ounces of payable silver produced at San
      Dimas and 50% of any excess, plus Silver Wheaton will receive an
      additional 1.5 million ounces of silver per annum to be delivered by
      Goldcorp. Beginning in the fifth year after closing, Primero will deliver
      to the Company a per annum amount equal to the first 6 million ounces of
      payable silver produced at San Dimas and 50% of any excess. Goldcorp will
      continue to guarantee the delivery by Primero of all silver produced and
      owing to the Company until 2029. Primero has provided Silver Wheaton with
      a right of first refusal on any metal stream or similar transaction it
      enters into.

TRANSFER AGENT AND REGISTRAR

The
transfer agent and registrar for the Common Shares is CIBC Mellon Trust Company
(CIBC Mellon) at its principal offices in Vancouver, British Columbia and
Toronto, Ontario.

The
warrant agent for the U.S. Dollar Warrants is CIBC Mellon at its principal
offices in Vancouver, British Columbia and Toronto, Ontario.

MATERIAL CONTRACTS

The
only material contracts entered into by the Company within the year ended
December 31, 2011 or before such time that are still in effect, other than in
the ordinary course of business, are as follows:

|1. | The San Dimas Silver Purchase Agreement referred to under
      the heading General Development of the Business  Three Year History 
      San Dimas Transaction in this annual information form;      
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                            
|2. | The Yauliyacu Silver Purchase Agreement referred to under
      the heading Description of the Business  Principal Product  Yauliyacu
      Mine in this annual information form;                      
|   |                                                                                                                                                                                                            
|3. | The Peñasquito Silver Purchase Agreement referred to
      under the heading Description of the Business  Principal Product 
      Peñasquito Mine in this annual information form;                    
|   |                                                                                                                                                                                                            
|4. | The Pascua-Lama Silver Purchase Agreement referred to
      under the heading General Development of the Business  Three Year
      History  Barrick Transaction in this annual information form;
  and
|   |                                                                                                                                                                                                            
|5. | The $600 million credit facility dated as of July 20,
      2007, as amended, between the Company and the lenders.                                                                                         
|   |                                                                                                                                                                                                            
|   | Each of such contracts is available on SEDAR at
      www.sedar.comunder the Companys profile.                                                                                                            

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INTERESTS OF EXPERTS

The
following table sets out the individuals who are the qualified persons as
defined by NI 43-101 in connection with the Mineral Reserve and Mineral Resource
estimates for the Companys mineral projects on a property material to the
Company set out opposite their name(s) and contained in this annual information
form:

|Mineral
      Property |  | Qualified Person(s)                                                                                                                                                                                          
|---------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                       |  |                                                                                                                                                                                                              
|San Dimas Mines        |  | Velasquez Spring, P.Eng. (Senior
      Geologist, Watts, Griffis and McOuat Limited)                                                                                                                         
|                       |  |                                                                                                                                                                                                              
|Yauliyacu Mine         |  | Samuel Mah, M.A.Sc., P.Eng.
      (Director of Engineering, Silver Wheaton) (Mineral Reserves) Neil Burns,
      M.Sc., P.Geo. (Vice President, Technical Services, Silver Wheaton)
      (Mineral Resources)
|                       |  |                                                                                                                                                                                                              
|Peñasquito Mine        |  | Maryse Belanger P.Geo. (Vice
      President, Technical Services, Goldcorp Inc.)                                                                                                                             
|                       |  |                                                                                                                                                                                                              
|Pascua-Lama Project    |  | Dino Pilotto, P.Eng. (Principal
      Mining Consultant, SRK Consulting (Canada) Inc.) (Mineral Reserves)                                                                                                    
|                       |  | Bart A. Stryhas, Ph.D., CPG
      (Principal Resource Geologist, SRK Consulting (U.S.) Inc.) (Mineral
      Resources)                                                                                       

The
following are the technical reports prepared in accordance with NI 43-101 from
which certain technical information relating to the Companys mineral projects
on a property material to the Company contained in this annual information form
has been derived:

|1. | San Dimas Mines  Velasquez Spring, P.Eng., Senior
      Geologist and Gordon Watts, P.Eng., Senior Associate Mineral Economist,
      both of Watts, Griffis and McQuat Limited prepared a technical report in
      accordance with NI 43-101 entitled Technical Report on the Tayoltita,
      Santa Rita and San Antonio Mines, Durango Mexico for Silver Wheaton Corp.
      dated March 14, 2011.                                                                                                          
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2. | Yauliyacu Mine  Neil Burns, M.Sc., P.Geo., Vice
      President, Technical Services of the Company, and Samuel Mah, M.A.Sc.,
      P.Eng., Director of Engineering of the Company, prepared a technical
      report in accordance with NI 43-101 entitled 2010 Resource and Reserve
      Update, Yauliyacu Mine, Peru dated March 30, 2011.                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|3. | Peñasquito Mine  Guillermo Pareja, Ph.D, P.Geo., Peter
      B. Nahan, AusIMM., and Maryse Belanger, P.Geo., all of Goldcorp Inc.
      prepared a technical report in accordance with NI 43-101 entitled
      Peñasquito Polymetallic Operation, Zacatecas State, Mexico NI 43-101
      Technical Report dated effective December 31, 2010.                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4. | Pascua-Lama Project  Christopher Elliott, FAusIMM,
      George Even, MAusIMM, Dino Pilotto, P.Eng., Cameron Scott, P.Eng., and
      Bart Stryhas, P.Geo., all of SRK Consulting, and Edward McLean, FAusIMM,
      of Ausenco Services Pty. Ltd., prepared a technical report in accordance
      with NI 43-101 entitled Amended NI 43-101 Technical Report, Pascua-Lama
      Project, Region III, Chile/San Juan Province, Argentina dated effective
      September 9, 2009, and amended October 28, 2009.

Each
of such reports are available on SEDAR at www.sedar.com under the Companys
profile and a summary of such reports is contained in this annual information
form under Description of the Business  San Dimas Mines, Mexico,  Yauliyacu
Mine, Peru,  Peñasquito Mine, Mexico,  Pascua-Lama Project, Border of Chile
and Argentina, respectively.

The
aforementioned firms or persons held either less than 1% or no securities of the
Company or of any associate or affiliate of the Company when they prepared the
reports, the mineral reserve estimates or the mineral resource estimates
referred to above, or following the preparation of such reports or estimates and
did not receive any direct or indirect interest in any securities of the Company
or of any associate or affiliate of the Company in connection with the
preparation of such reports or estimates. None of the aforementioned persons are
currently expected to be elected, appointed or employed as a director, officer
or employee of the Company or of any associate or affiliate of the Company,
other than Neil Burns and Sam Mah who are employees of the Company.

Deloitte
& Touche LLP is the auditor of the Company and is independent of the Company
within the meaning of the Rules of Professional Conduct of the Institute of
Chartered Accountants of British Columbia.

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AUDIT COMMITTEE

The
Companys Audit Committee is responsible for monitoring the Companys systems
and procedures for financial reporting and internal control, reviewing certain
public disclosure documents and monitoring the performance and independence of
the Companys external auditors. The committee is also responsible for reviewing
the Companys annual audited financial statements, unaudited quarterly financial
statements and managements discussion and analysis of financial results of
operations for both annual and interim financial statements and review of
related operations prior to their approval by the full Board of Directors of the
Company. The committee also has oversight responsibility for significant
business, political, financial and control risks that the Company is exposed to,
including a review of managements assessment of the likelihood and severity of
those risks and any mitigation steps taken.

The
Audit Committees charter sets out its responsibilities and duties,
qualifications for membership, procedures for committee member removal and
appointment and reporting to the Companys Board of Directors. A copy of the
charter is attached hereto as Schedule A.

The
current members of the Companys Audit Committee are John A. Brough (Chairman),
George L. Brack and R. Peter Gillin. Each of Messrs. Brough, Brack and Gillin
are independent and financially literate within the meaning of National
Instrument 52-110 Audit Committees (NI 52-110). In addition to being
independent directors as described above, all members of the Companys Audit
Committee must meet an additional independence test under NI 52-110 in that
their directors fees are the only compensation they, or their firms, receive
from the Company and that they are not affiliated with the Company.

The
Audit Committee met five times in 2011. Each of Messrs. Brough, Gillin and Brack
were present at all five meetings.

Relevant Education and Experience

See
Directors and Officers for a description of the education and experience of
each Audit Committee member that is relevant to the performance of his
responsibilities as an Audit Committee member.

Pre-Approval Policies and Procedures

The
Audit Committees charter sets out responsibilities regarding the provision of
non-audit services by the Companys external auditors. This policy encourages
consideration of whether the provision of services other than audit services is
compatible with maintaining the auditors independence and requires Audit
Committee pre-approval of permitted audit and audit-related services.

External Auditor Service Fees

Deloitte
& Touche LLP, Independent Registered Chartered Accountants, were the
auditors of the Company in 2011. Fees payable to Deloitte & Touche LLP in
respect of services in 2010 and 2011 are detailed below:

($)
    2010 (1)
    2011 (1)Audit Fees (2)
    655,566
    782,734Audit-Related Fees
    -
    2,730Tax Fees (3)
    57,160
    26,187All Other Fees
    18,196
    70,773TOTAL
    730,922
    882,424


| | (1) | Fees are paid in Canadian dollars and converted to United
      States dollars for reporting purposes in this table at the exchange rate
      of C$1.00 = US$0.9833 for the financial year ended December 31, 2011 and
      at the exchange rate of C$1.00 = US$1.0054 for the financial year ended
      December 31, 2010.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Audit fees were paid for professional services rendered
      by the auditors for the audit of the Companys annual financial statements
      or services provided in connection with statutory and regulatory filings
      or engagements.                                                                                 
| | (3) | Tax fees were paid for international tax planning, advice
      and compliance.                                                                                                                                                                                                                                               

- 66 -

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ADDITIONAL INFORMATION

Additional
information relating to the Company can be found on SEDAR at www.sedar.com and
on EDGAR at www.sec.gov. Additional information, including directors and
officers remuneration and indebtedness, principal holders of the Companys
securities and securities authorized for issuance under equity compensation
plans will be contained in the management information circular of the Company to
be prepared in connection with the Companys annual meeting of shareholders
scheduled to be held on May 23, 2012 which will be available on SEDAR at
www.sedar.com and EDGAR at www.sec.gov. Additional financial information is
provided in the Companys audited consolidated financial statements and
managements discussion and analysis for the year ended December 31, 2011.

- 67 -

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SCHEDULE A

SILVER WHEATON CORP. AUDIT COMMITTEE CHARTER

|I.  | PURPOSE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The Audit Committee is a committee of the Board of
      Directors (the Board) of Silver Wheaton Corp. (Silver Wheaton or the
      Company). The primary function of the Audit Committee is to assist the
      Board in fulfilling its financial reporting and controls responsibilities
      to the shareholders of the Company and the investment community. The
      external auditors will report directly to the Audit Committee. The Audit
      Committees primary duties and responsibilities are:
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | C.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | D.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | E.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | F.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | G.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|II. | COMPOSITION AND MEETINGS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | C.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

---

| | D. | All members shall, to the satisfaction of the Board of
      Directors, be financially literate as defined in Schedule A, and at
      least one member shall have accounting or related financial management
      expertise to qualify as a financial expert as defined in Schedule
    A.                                                                                                                                                                                                                                                                          
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | E. | If a Committee member simultaneously serves on the audit
      committees of more than three public companies, the Committee shall seek
      the Boards determination as to whether such simultaneous service would
      impair the ability of such member to effectively serve on the Companys
      audit committee and ensure that such determination is disclosed.                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | F. | The Committee shall meet at least four times annually, or
      more frequently as circumstances require. The Committee shall meet within
      45 days following the end of each of the first three financial quarters to
      review and discuss the unaudited financial results for the preceding
      quarter and the related MD&A and shall meet within 90 days following
      the end of the fiscal year end to review and discuss the audited financial
      results for the year and related MD&A prior to their
  publishing.                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | G. | The Committee may ask members of management or others to
      attend meetings and provide pertinent information as necessary. For
      purposes of performing their audit related duties, members of the
      Committee shall have full access to all corporate information and shall be
      permitted to discuss such information and any other matters relating to
      the financial position of the Company with senior employees, officers and
      independent auditors of the Company.                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | H. | As part of its job to foster open communication, the
      Committee should meet at least quarterly with management and the
      independent auditor in in-camera sessions, and as determined in the
      discretion of the Committee with the head of internal Audit, to discuss
      any matters that the Committee or each of these groups believe should be
      discussed privately. In addition, the Committee or at least its Chair
      should meet with the independent auditor and management quarterly to
      review the Companys financial statements.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | I. | Each of the Chairman of the Committee, members of the
      Committee, Chairman of the Board, independent auditors, Chief Executive
      Officer, Chief Financial Officer or Secretary shall be entitled to request
      that the Chairman of the Audit Committee call a meeting which shall be
      held within 48 hours of receipt of such
request.                                                                                                                                                                                                                  

|III. | RESPONSIBILITIES AND DUTIES                                                
|---- | ---------------------------------------------------------------------------
|     |                                                                            
|     | To fulfill its responsibilities and duties the Audit
      Committee shall:
|     |                                                                            
|     | A.                                                                         
|     |                                                                            
|     | B.                                                                         
|     |                                                                            
|     | C.                                                                         
|     |                                                                            
|     | D.                                                                         
|     |                                                                            
|     |                                                                            

---

| | ii)  | Review analyses prepared by management and/or the
      independent auditor setting forth significant financial reporting issues
      and judgments made in connection with the preparation of the financial
      statements, including analyses of the effects of alternative GAAP methods
      on the financial statements.                                                                                                                                       
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | iii) | Review the effect of regulatory and accounting
      initiatives, as well as off balance sheet structures, on the financial
      statements of the Company.                                                                                                                                                                                                                                                                                                           
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | iv)  | Review policies and procedures with respect to directors
      and officers expense accounts and management perquisites and benefits,
      including their use of corporate assets and expenditures related to
      executive travel and entertainment, and review the results of the
      procedures performed in these areas by the independent auditor, based on
      terms of reference agreed upon by the independent auditor and the Audit
      Committee.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | v)   | Review expenses of the Board Chair and CEO
    annually.                                                                                                                                                                                                                                                                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | vi)  | Ensure that adequate procedures are in place for the
      review of the Companys public disclosure of financial information
      extracted or derived from the issuers financial statements, as well as
      review any financial information and earnings guidance provided to
      analysts and rating agencies, and periodically assess the adequacy of
      those procedures.                                                                               

| | E. | Independent Auditor
| | -- | -------------------
| |    |                    
| |    | i)                 
| |    |                    
| |    | ii)                
| |    |                    
| |    | iii)               
| |    |                    
| |    | iv)                
| |    |                    
| |    |                    
| |    |                    
| |    |                    
| |    |                    
| |    |                    
| |    |                    
| |    | v)                 

---

| | vi)   | Review the relationship of non-audit fees to audit fees
      paid to the independent Auditor to ensure that auditor independence is
      maintained.                                                                                                                                                                                                                                                                                                                                                           
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | vii)  | Ensure that both the audit and non-audit fees are
      disclosed to shareholders by category.                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | viii) | Review the performance of the independent auditor and
      approve any proposed discharge and replacement of the independent auditor
      when circumstances warrant. Consider with management and the independent
      auditor the rationale for employing accounting/auditing firms other than
      the principal independent auditor.                                                                                                                                                                     
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ix)   | At least annually, consult with the independent auditor
      out of the presence of management about significant risks or exposures,
      internal controls and other steps that management has taken to control
      such risks, and the fullness and accuracy of the organizations financial
      statements. Particular emphasis should be given to the adequacy of
      internal controls to expose any payments, transactions, or procedures that
      might be deemed illegal or otherwise improper.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | x)    | Arrange for the independent auditor to be available to
      the Audit Committee and the full Board as needed. Ensure that the auditors
      report directly to the Audit Committee and are made accountable to the
      Board and the Audit Committee, as representatives of the shareholders to
      whom the auditors are ultimately responsible.                                                                                                                                                          
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | xi)   | Oversee the work of the independent auditors engaged for
      the purpose of preparing or issuing an audit report or performing other
      audit, review or attest services.                                                                                                                                                                                                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | xii)  | Ensure that the independent auditors are prohibited from
      providing the following non-audit services and determining which other
      non-audit services the independent auditors are prohibited from
      providing:                                                                                                                                                                                                                                                                                     
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       | e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       | f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       | g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       | h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | xiii) | Approve any permissible non-audit engagements of the
      independent auditors, in accordance with applicable
  legislation.                                                                                                                                                                                                                                                                                                                                                                                    

| | F. | Internal Auditors
| | -- | -----------------

---

| | i)   | Review the effectiveness and independence of the internal
      auditor function;                                                                   
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                     
| | ii)  | Review and approve the scope of the proposed internal
      audit plan and ensure it addresses key areas of risk;                                   
| |      |                                                                                                                                                     
| | iii) | Periodically review:                                                                                                                                
| |      |                                                                                                                                                     
| |      | a)                                                                                                                                                  
| |      |                                                                                                                                                     
| |      | b)                                                                                                                                                  
| |      |                                                                                                                                                     
| |      | c)                                                                                                                                                  
| |      |                                                                                                                                                     
| | iv)  | Ensure the internal audits significant findings and
      recommendations are received, discussed and appropriately acted upon by
      management.

| | G. | Financial Reporting Processes
| | -- | -----------------------------
| |    |                              
| |    | i)                           
| |    |                              
| |    | ii)                          
| |    |                              
| |    | iii)                         
| |    |                              
| |    | iv)                          
| |    |                              
| | H. | Process Improvement          
| |    |                              
| |    | i)                           
| |    |                              
| |    | ii)                          
| |    |                              
| |    | iii)                         

---

| | iv)   | Review the scope and plans of the independent auditor's
      audit and reviews prior to the audit and reviews being conducted. The
      Committee may authorize the independent auditor to perform supplemental
      reviews or audits as the Committee may deem desirable.                                                                                                                                                                                                           
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | v)    | Following completion of the annual audit and quarterly
      reviews, review separately with each of management and the independent
      auditor any significant changes to planned procedures, any difficulties
      encountered during the course of the audit and reviews, including any
      restrictions on the scope of work or access to required information and
      the cooperation that the independent auditor received during the course of
      the audit and reviews.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | vi)   | Review any significant disagreements among management and
      the independent auditor in connection with the preparation of the
      financial statements.                                                                                                                                                                                                                                                                                                                            
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | vii)  | Where there are significant unsettled issues the
      Committee shall ensure that there is an agreed course of action for the
      resolution of such matters.                                                                                                                                                                                                                                                                                                                         
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | viii) | Review with the independent auditor and management
      significant findings during the year and the extent to which changes or
      improvements in financial or accounting practices, as approved by the
      Audit Committee, have been implemented. This review should be conducted at
      an appropriate time subsequent to implementation of changes or
      improvements, as decided by the Committee.                                                                      
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ix)   | Review activities, organizational structure, and
      qualifications of the CFO and the staff in the financial reporting area
      and see to it that matters related to succession planning within the
      Company are raised for consideration at the full
Board.                                                                                                                                                                                                                  

| | I. | Ethical and Legal Compliance
| | -- | ----------------------------
| |    |                             
| |    | i)                          
| |    |                             
| |    | ii)                         
| |    |                             
| |    | iii)                        
| |    |                             
| |    | iv)                         
| |    |                             
| | J. | Risk Management             
| |    |                             
| |    | i)                          
| |    |                             
| |    | ii)                         
| |    |                             
| |    | iii)                        

---

| | K. | General
| | -- | -------
| |    |        
| |    | i)     
| |    |        
| |    | ii)    
| |    |        
| |    | iii)   
| |    |        
| |    | iv)    
| |    |        
| |    | v)     
| |    |        
| |    | vi)    

|IV. | ACCOUNTABILITY
|--- | --------------
|    |               
|    | A.            
|    |               
|    | B.            
|    |               
|    | C.            

---

APPENDIX ONE TO SCHEDULE ASILVER WHEATON CORP.
AUDIT COMMITTEE CHARTER

Affiliated Person under SEC Rules

An affiliated person, in accordance with the rules of the
United States Securities and Exchange Commission adopted pursuant to the
Sarbanes-Oxley Act, means a person who directly or indirectly controls
the Company, or a director, executive officer, partner, member, principal or
designee of an entity that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Company.

Financial Literacy Under Multilateral Instrument 52-110

Financially literate, in accordance with MI 52-110, means
that the director has the ability to read and understand a set of financial
statements that present a breadth and level of complexity of accounting issues
that are generally comparable to the breadth and complexity of the issues that
can reasonably be expected to be raised by the Companys financial statements.

Financial Expert Under SEC Regulation S-K

A person will qualify as financial expert if he or she
possesses the following attributes:

|a) | an understanding of financial statements and generally
      accepted accounting principles;                                                                                                                                                                                                                                                                                                                               
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                            
|b) | the ability to assess the general application of such
      principles in connection with the accounting for estimates, accruals and
      reserves;                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                            
|c) | experience preparing, auditing, analyzing or evaluating
      financial statements that present a breadth and level of complexity of
      accounting issues that are generally comparable to the breadth and
      complexity of issues that can reasonably be expected to be raised by the
      Companys financial statements, or experience actively supervising one or
      more persons engaged in such activities;
|   |                                                                                                                                                                                                                                                                                                                                                                                                                            
|d) | an understanding of internal controls and procedures for
      financial reporting; and                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                            
|e) | an understanding of audit committee
  functions.                                                                                                                                                                                                                                                                                                                                                                           

A person shall have acquired such attributes through:

|a) | education and experience as a principal financial
      officer, principal accounting officer, controller, public accountant or
      auditor or experience in one or more positions that involve the
      performance of similar functions;
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                              
|b) | experience actively supervising a principal financial
      officer, principal accounting officer, controller, public accountant,
      auditor or person performing similar functions;                                                      
|   |                                                                                                                                                                                                                                              
|c) | experience overseeing or assessing the performance of
      companies or public accountants with respect to the preparation, auditing
      or evaluation of financial statements; or                                                        
|   |                                                                                                                                                                                                                                              
|d) | other relevant experience.                                                                                                                                                                                                                   

---

Item
      
      CSA*
      NYSE**Ensure that the CEOs Terms of Reference include responsibility to
      make annual and interim written affirmations regarding the Audit
      Committee, and ensure that such written affirmations are submitted as
      required.
    
      
    √Disclose the text of the Audit Committees charter.
    
    √Disclose names of committee members and state whether or not each is
      (i) independent and (ii) financially literate. Describe each members
      education and experience relevant to responsibilities.
    
    √Disclosure whether, at any time since the commencement of most
      recently completed financial year, the Company has relied on any possible
      exemptions for Audit Committees.
    
    √If, at any time since the commencement of the issuers most recently
      completed financial year, a recommendation of the audit committee to
      nominate or compensate an external auditor was not adopted by the board of
      directors, state that fact and why.
    
    √Disclose by category how much the auditor is paid for consulting and
      other services.
    
    √Disclose any specific policies or procedures adopted by the
      Audit Committee for pre-approval of non-audit services by the external
      auditor.
    
    √Prepare and disclose any Audit Committee reports required
      by applicable regulators.
    
    √


---

APPENDIX ONE TO SCHEDULE ASILVER WHEATON CORP.
AUDIT COMMITTEE CHARTER

Affiliated Person under SEC Rules

An affiliated person, in accordance with the rules of the
United States Securities and Exchange Commission adopted pursuant to the
Sarbanes-Oxley Act, means a person who directly or indirectly controls
the Company, or a director, executive officer, partner, member, principal or
designee of an entity that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Company.

Financial Literacy Under National Instrument 52-110

Financially literate, in accordance with NI 52-110, means
that the director has the ability to read and understand a set of financial
statements that present a breadth and level of complexity of accounting issues
that are generally comparable to the breadth and complexity of the issues that
can reasonably be expected to be raised by the Companys financial statements.

Financial Expert Under SEC Regulation S-K

A person will qualify as financial expert if he or she
possesses the following attributes:

|f) | an understanding of financial statements and generally
      accepted accounting principles;                                                                                                                                                                                                                                                                                                                               
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|g) | the ability to assess the general application of such
      principles in connection with the accounting for estimates, accruals and
      reserves;                                                                                                                                                                                                                                                                       
|h) | experience preparing, auditing, analyzing or evaluating
      financial statements that present a breadth and level of complexity of
      accounting issues that are generally comparable to the breadth and
      complexity of issues that can reasonably be expected to be raised by the
      Companys financial statements, or experience actively supervising one or
      more persons engaged in such activities;
|i) | an understanding of internal controls and procedures for
      financial reporting; and                                                                                                                                                                                                                                                                                                                                    
|j) | an understanding of audit committee
  functions.                                                                                                                                                                                                                                                                                                                                                                           

A person shall have acquired such attributes through:

|e) | education and experience as a principal financial
      officer, principal accounting officer, controller, public accountant or
      auditor or experience in one or more positions that involve the
      performance of similar functions;
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|f) | experience actively supervising a principal financial
      officer, principal accounting officer, controller, public accountant,
      auditor or person performing similar functions;                                                      
|g) | experience overseeing or assessing the performance of
      companies or public accountants with respect to the preparation, auditing
      or evaluation of financial statements; or                                                        
|h) | other relevant experience.                                                                                                                                                                                                                   

- A2 -

---