----

----

----

| “Robert A. Archer” | “Jim A. Zadra” |
|--------------------------------|----------------------------|
| Chief Executive Officer        | Chief Financial Officer    |
| March 10, 2014                 | March 10, 2014             |

----

----

----

----

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
|--------|-----------------------------------------------|

|   | (Expressed in thousands of Canadian dollars) |
|--------|----------------------------------------------|

|   | As at December 31, 2013 and 2012 |
|--------|----------------------------------|

|                                                 |   | December 31, |    |   | December 31, |   |
|------------------------------------------------------|--------|--------------|---------|--------|--------------|--------|
|                                                 |   | 2013         |    |   | 2012         |   |
|                                                 |   |         |    |   |         |   |
| Assets                                               |   |         |    |   |         |   |
|                                                 |   |         |    |   |         |   |
| Current assets:                                      |   |         |    |   |         |   |
| Cash and cash equivalents                            |   | $            | 21,760  |   |         | $      | 20,735 |   |
| Short term investments (note 6)                      |   |         | 18      |   |         |   | 5,164 |   |
| Trade and other receivables (note 7)                 |   |         | 14,483  |   |         |   | 18,099 |   |
| Income taxes recoverable                             |   |         | 570     |   |         |   | 130 |   |
| Inventories (note 8)                                 |   |         | 7,212   |   |         |   | 6,927 |   |
| Prepaid expenses, deposits and advances              |   |         | 707     |   |         |   | 1,995 |   |
|                                                 |   |         | 44,750  |   |         |   | 53,050 |   |
| Non-current assets:                                  |   |         |    |   |         |   |   |   |
| Mineral properties, plant and equipment (notes 5, 9) |   |         | 51,276  |   |         |   | 55,451 |   |
| Exploration and evaluation assets (note 10)          |   |         | 3,181   |   |         |   | 7,270 |   |
| Intangible assets (note 11)                          |   |         | 665     |   |         |   | 705 |   |
| Deferred tax asset (note 24)                         |   |         | 247     |   |         |   | 253 |   |
|                                                 |   | $            | 100,119 |   |         | $      | 116,729 |   |
|                                                 |   |         |    |   |         |   |   |   |
| Liabilities and Shareholders’ Equity           |   |         |    |   |         |   |   |   |
|                                                 |   |         |    |   |         |   |   |   |
| Current liabilities:                                 |   |         |    |   |         |   |   |   |
| Trade and other payables (note 12)                   |   | $            | 6,527   |   |         | $      | 8,111 |   |
| Current tax liability (note 24)                      |   |         | -       |   |         |   | 400 |   |
|                                                 |   |         | 6,527   |   |         |   | 8,511 |   |
| Non-current liabilities:                             |   |         |    |   |         |   |   |   |
| Reclamation and remediation provision (note 13)      |   |         | 2,440   |   |         |   | 2,447 |   |
| Deferred tax liability (note 24)                     |   |         | 2,332   |   |         |   | 5,746 |   |
|                                                 |   |         | 11,299  |   |         |   | 16,704 |   |
|                                                 |   |         |    |   |         |   |   |   |
| Shareholders’ equity:                          |   |         |    |   |         |   |   |   |
| Share capital (note 14)                              |   |         | 123,022 |   |         |   | 122,444 |   |
| Reserves                                             |   |         | 8,532   |   |         |   | 7,586 |   |
| Deficit                                              |   |         | (42,734 | )      |         |   | (30,005 | ) |
|                                                 |   |         | 88,820  |   |         |   | 100,025 |   |
|                                                 |   | $            | 100,119 |   |         | $      | 116,729 |   |

| “Robert A. Archer”                                    | “Robert W. Garnett”                                      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Robert A. Archer, Director                                                                                                                                                                                                                  | Robert W. Garnett, Director                                                                                                                                                                                                                                   |

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
|--------|-------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except per share data) |
|--------|---------------------------------------------------------------------|

|   | For the years ended December 31, 2013 and 2012 |
|--------|------------------------------------------------|

|                                                                     |   | 2013   |    |   | 2012   |   |
|--------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                     |   |   |    |   |   |   |
| Revenue                                                                  |   | $      | 53,954  |   |   | $      | 61,139 |   |
| Cost of sales (note 16)                                                  |   |   |    |   |   |   |   |   |
| Production costs                                                         |   |   | 39,822  |   |   |   | 32,864 |   |
| Amortization and depletion                                               |   |   | 13,047  |   |   |   | 8,684 |   |
| Share-based payments                                                     |   |   | 445     |   |   |   | 385 |   |
|                                                                     |   |   | 53,314  |   |   |   | 41,933 |   |
|                                                                     |   |   |    |   |   |   |   |   |
| Gross profit                                                             |   |   | 640     |   |   |   | 19,206 |   |
|                                                                     |   |   |    |   |   |   |   |   |
| General and administrative expenses (note 17)                            |   |   |    |   |   |   |   |   |
| Administrative expenses                                                  |   |   | 7,156   |   |   |   | 8,808 |   |
| Amortization and depletion                                               |   |   | 300     |   |   |   | 206 |   |
| Share-based payments                                                     |   |   | 380     |   |   |   | 1,071 |   |
|                                                                     |   |   | 7,836   |   |   |   | 10,085 |   |
|                                                                     |   |   |    |   |   |   |   |   |
| Exploration and evaluation expenses (note 18)                            |   |   |    |   |   |   |   |   |
| Exploration and evaluation expenses                                      |   |   | 2,306   |   |   |   | 2,309 |   |
| Share-based payments                                                     |   |   | 86      |   |   |   | 73 |   |
|                                                                     |   |   | 2,392   |   |   |   | 2,382 |   |
|                                                                     |   |   |    |   |   |   |   |   |
| Impairment of mineral properties, plant and equipment (note 5)           |   |   | 12,042  |   |   |   | - |   |
|                                                                     |   |   |    |   |   |   |   |   |
| Income (loss) before the undernoted                                      |   |   | (21,630 | )      |   |   | 6,739 |   |
|                                                                     |   |   |    |   |   |   |   |   |
| Finance and other income (expense)                                       |   |   |    |   |   |   |   |   |
| Interest income                                                          |   |   | 335     |   |   |   | 442 |   |
| Finance costs (note 19)                                                  |   |   | (53     | )      |   |   | (34 | ) |
| Foreign exchange gain (note 15)                                          |   |   | 4,648   |   |   |   | 2,828 |   |
| Other income (expense) (note 20)                                         |   |   | 493     |   |   |   | (265 | ) |
|                                                                     |   |   | 5,423   |   |   |   | 2,971 |   |
|                                                                     |   |   |    |   |   |   |   |   |
| Income (loss) before income taxes                                        |   |   | (16,207 | )      |   |   | 9,710 |   |
|                                                                     |   |   |    |   |   |   |   |   |
| Income tax expense (recovery) (note 24)                                  |   |   |    |   |   |   |   |   |
| Current                                                                  |   |   | 183     |   |   |   | 592 |   |
| Deferred                                                                 |   |   | (3,661  | )      |   |   | 3,608 |   |
|                                                                     |   |   | (3,478  | )      |   |   | 4,200 |   |
| Net income (loss) for the year                                           |   | $      | (12,729 | )      |   | $      | 5,510 |   |
|                                                                     |   |   |    |   |   |   |   |   |
| Other comprehensive income (loss), net of tax                            |   |   |    |   |   |   |   |   |
| Items that are or may be reclassified subsequently to net income (loss): |   |   |    |   |   |   |   |   |
| Foreign currency translation                                             |   |   | 296     |   |   |   | 1 |   |
| Change in fair value of available-for-sale financial assets (net of tax) |   |   | (71     | )      |   |   | (8 | ) |
|                                                                     |   |   | 225     |   |   |   | (7 | ) |
| Total comprehensive income (loss) for the year                           |   | $      | (12,504 | )      |   | $      | 5,503 |   |
|                                                                     |   |   |    |   |   |   |   |   |
| Earnings (loss) per share (note 14(e))                                   |   |   |    |   |   |   |   |   |
| Basic                                                                    |   | $      | (0.09   | )      |   | $      | 0.04 |   |
| Diluted                                                                  |   | $      | (0.09   | )      |   | $      | 0.04 |   |

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY |
|--------|------------------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars) |
|--------|----------------------------------------------|

|   | For the years ended December 31, 2013 and 2012 |
|--------|------------------------------------------------|

|                                 |   | Share Capital                  |    |   | Reserves |   |    |                       |   |   |                         |   |
|--------------------------------------|--------|--------------------------------|---------|--------|----------|--------|---------|----------------------------|--------|--------|------------------------------|--------|
|                                 |   | Number of shares (000’s) |    |   | Amount   |   |    | Share options and warrants |   |   | Foreign currency translation |   |   | Fair value |   |   | Totalreserves |   |   | Income(deficit) |   |   | Total share-holders’ equity |   |
| Balance at January 1, 2012           |   |                           | 137,409 |   |     | $      | 121,536 |                       |   | $      | 10,749                       |   |   | $ | (4,148 | ) |   | $ | (136 | ) |   | $ | 6,465 |   |   | $ | (35,515 | ) |   | $ | 92,486 |   |
| Share options exercised (note 14(c)) |   |                           | 451     |   |     |   | 908     |                       |   |   | (401                         | )      |   |   | - |   |   |   | - |   |   |   | (401 | ) |   |   | - |   |   |   | 507 |   |
| Share-based payments                 |   |                           | -       |   |     |   | -       |                       |   |   | 1,529                        |   |   |   | - |   |   |   | - |   |   |   | 1,529 |   |   |   | - |   |   |   | 1,529 |   |
| Comprehensive income (loss)          |   |                           | -       |   |     |   | -       |                       |   |   | -                            |   |   |   | 1 |   |   |   | (8 | ) |   |   | (7 | ) |   |   | 5,510 |   |   |   | 5,503 |   |
| Balance at December 31, 2012         |   |                           | 137,860 |   |     | $      | 122,444 |                       |   | $      | 11,877                       |   |   | $ | (4,147 | ) |   | $ | (144 | ) |   | $ | 7,586 |   |   | $ | (30,005 | ) |   | $ | 100,025 |   |
|                                 |   |                           |    |   |     |   |    |                       |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2013           |   |                           | 137,860 |   |     | $      | 122,444 |                       |   | $      | 11,877                       |   |   | $ | (4,147 | ) |   | $ | (144 | ) |   | $ | 7,586 |   |   | $ | (30,005 | ) |   | $ | 100,025 |   |
| Share options exercised (note 14(c)) |   |                           | 560     |   |     |   | 578     |                       |   |   | (190                         | )      |   |   | - |   |   |   | - |   |   |   | (190 | ) |   |   | - |   |   |   | 388 |   |
| Share-based payments                 |   |                           | -       |   |     |   | -       |                       |   |   | 911                          |   |   |   | - |   |   |   | - |   |   |   | 911 |   |   |   | - |   |   |   | 911 |   |
| Comprehensive income (loss)          |   |                           | -       |   |     |   | -       |                       |   |   | -                            |   |   |   | 296 |   |   |   | (71 | ) |   |   | 225 |   |   |   | (12,729 | ) |   |   | (12,504 | ) |
| Balance at December 31, 2013         |   |                           | 138,420 |   |     | $      | 123,022 |                       |   | $      | 12,598                       |   |   | $ | (3,851 | ) |   | $ | (215 | ) |   | $ | 8,532 |   |   | $ | (42,734 | ) |   | $ | 88,820 |   |

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | CONSOLIDATED STATEMENTS OF CASH FLOWS |
|--------|---------------------------------------|

|   | (Expressed in thousands of Canadian dollars) |
|--------|----------------------------------------------|

|   | For the years ended December 31, 2013 and 2012 |
|--------|------------------------------------------------|

|                                                                          |   | 2013   |    |   | 2012   |   |
|-------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                          |   |   |    |   |   |   |
| Cash flows from operating activities                                     |   |   |    |   |   |   |
| Net income (loss) for the year                                                |   | $      | (12,729 | )      |   | $      | 5,510 |   |
| Items not involving cash:                                                     |   |   |    |   |   |   |   |   |
| Amortization and depletion                                                    |   |   | 13,347  |   |   |   | 8,890 |   |
| Impairment of mineral properties, plant and equipment (note 5)                |   |   | 12,042  |   |   |   | - |   |
| Unrealized foreign exchange gains                                             |   |   | (3,671  | )      |   |   | (2,860 | ) |
| Income tax (recovery) expense                                                 |   |   | (3,661  | )      |   |   | 4,200 |   |
| Share-based payments                                                          |   |   | 911     |   |   |   | 1,529 |   |
| (Gain) loss on disposition of capital assets                                  |   |   | (51     | )      |   |   | 17 |   |
| Other non-cash items                                                          |   |   | (282    | )      |   |   | (408 | ) |
|                                                                          |   |   | 5,906   |   |   |   | 16,878 |   |
|                                                                          |   |   |    |   |   |   |   |   |
| Interest received                                                             |   |   | 263     |   |   |   | 384 |   |
| Interest paid                                                                 |   |   | -       |   |   |   | (6 | ) |
| Income taxes paid                                                             |   |   | (674    | )      |   |   | (202 | ) |
| Net cash from operating activities before changes in non-cash working capital |   |   | 5,495   |   |   |   | 17,054 |   |
|                                                                          |   |   |    |   |   |   |   |   |
| Changes in non-cash working capital:                                          |   |   |    |   |   |   |   |   |
| Decrease (increase) in trade and other receivables                            |   |   | 3,689   |   |   |   | (3,963 | ) |
| Decrease (increase) in income taxes recoverable                               |   |   | (440    | )      |   |   | 244 |   |
| Decrease (increase) in inventories                                            |   |   | (22     | )      |   |   | (1,924 | ) |
| Decrease (increase) in prepaid expenses, deposits and advances                |   |   | 1,288   |   |   |   | (263 | ) |
| Increase (decrease) in trade and other payables                               |   |   | (1,666  | )      |   |   | 1,982 |   |
| Increase (decrease) in current tax liability                                  |   |   | 274     |   |   |   | 10 |   |
| Net cash from operating activities                                            |   |   | 8,618   |   |   |   | 13,140 |   |
|                                                                          |   |   |    |   |   |   |   |   |
| Cash flows from investing activities:                                         |   |   |    |   |   |   |   |   |
| Additions to intangible assets                                                |   |   | (256    | )      |   |   | (811 | ) |
| Additions to mineral properties, plant and equipment, and evaluation assets   |   |   | (13,524 | )      |   |   | (26,712 | ) |
| Proceeds from disposal of plant and equipment                                 |   |   | 62      |   |   |   | 86 |   |
| Proceeds/purchase of short term investments (note 6)                          |   |   | 5,085   |   |   |   | (85 | ) |
| Net cash used in investing activities                                         |   |   | (8,633  | )      |   |   | (27,522 | ) |
|                                                                          |   |   |    |   |   |   |   |   |
| Cash flows from financing activities:                                         |   |   |    |   |   |   |   |   |
| Repayment of capital lease obligations                                        |   |   | -       |   |   |   | (130 | ) |
| Proceeds from exercise of options (note 14(c))                                |   |   | 388     |   |   |   | 507 |   |
| Net cash from financing activities                                            |   |   | 388     |   |   |   | 377 |   |
|                                                                          |   |   |    |   |   |   |   |   |
| Effect of foreign currency translation on cash and cash equivalents           |   |   | 652     |   |   |   | 303 |   |
|                                                                          |   |   |    |   |   |   |   |   |
| Increase (decrease) in cash and cash equivalents                              |   |   | 1,025   |   |   |   | (13,702 | ) |
| Cash and cash equivalents, beginning of year                                  |   |   | 20,735  |   |   |   | 34,437 |   |
| Cash and cash equivalents, end of year                                        |   | $      | 21,760  |   |   | $      | 20,735 |   |

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data) For the years ended December 31, 2013 and 2012 |
|--------|---------------------------------------------------------------------------------------------------------------------|

| 1.   | Nature of operations |
|----------------|----------------------|

| 2.   | Basis of presentation |
|----------------|-----------------------|

| 3.   | Significant accounting policies |
|----------------|---------------------------------|

| (a)   | Basis of consolidation |
|-----------------|------------------------|

| (b)   | Basis of measurement |
|-----------------|----------------------|

|   | · | derivative financial instruments are measured at fair value; |
|--------|--------|--------------------------------------------------------------|

|   | · | financial instruments at fair value through profit or loss are measured at fair value; and |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | available-for-sale financial assets are measured at fair value. |
|--------|--------|-----------------------------------------------------------------|

| (c)   | Foreign currency translation |
|-----------------|------------------------------|

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 3.   | Significant accounting policies – continued |
|----------------|---------------------------------------------------|

|   | · | Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of the statement of financial position; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Income and expenses for each statement of comprehensive income are translated at average exchange rates, unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | All resulting exchange differences are recognized as a separate component of equity. |
|--------|--------|--------------------------------------------------------------------------------------|

| (d)   | Cash and cash equivalents |
|-----------------|---------------------------|

| (e)   | Short term investments |
|-----------------|------------------------|

| (f)   | Inventories |
|-----------------|-------------|

|   | · | Ore stockpiles and concentrate inventories which are valued at the lower of weighted average cost and net realizable value.  Costs include production costs and amortization and depletion directly attributable to the inventory production process.  Net realizable value is the expected selling price for the finished product less the costs to get the product into saleable form and to the selling location. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Materials and supplies inventory, which includes the cost of consumables used in operations such as fuel, grinding media, chemicals and spare parts, are stated at the lower of weighted average cost and replacement cost which approximates net realizable value.  Major spare parts and standby equipment are included in property, plant, and equipment when they are expected to be used during more than one period and if they can only be used in connection with an item of property, plant, and equipment. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Silver bullion, to be minted and sold as coins and bars, is recorded at lower of cost and net realizable value. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

| (g)   | Mineral properties, plant and equipment |
|-----------------|-----------------------------------------|

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 3.   | Significant accounting policies – continued |
|----------------|---------------------------------------------------|

|   |  Computer equipment     |  straight-line over the estimated useful life of 3 years |
|--------|------------------------------|---------------------------------------------------------------|
|   |  Furniture and fixtures |  straight-line over the estimated useful life of 5 years |
|   |  Office equipment       |  straight-line over the estimated useful life of 5 years |
|   |  Leasehold improvements |  straight-line over the term of the lease                |

| (h)   | Exploration and evaluation assets |
|-----------------|-----------------------------------|

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 3.  | Significant accounting policies – continued |
|----------|---------------------------------------------------|

| (i)   | Leased assets |
|-----------------|---------------|

| (j)   | Intangible assets |
|-----------------|-------------------|

| (k)   | Impairment of non-financial assets |
|-----------------|------------------------------------|

| (l)   | Share-based payments |
|-----------------|----------------------|

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 3.   | Significant accounting policies – continued |
|----------------|---------------------------------------------------|

| (m)   | Revenue recognition |
|-----------------|---------------------|

| (n)   | Reclamation and remediation provisions |
|-----------------|----------------------------------------|

| (o)   | Financial instruments |
|-----------------|-----------------------|

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 3.   | Significant accounting policies – continued |
|----------------|---------------------------------------------------|

|   | · | For available-for-sale financial assets, an impairment loss is established when there is a significant or prolonged decline in fair value of the investment or when there is objective evidence that the carrying amount of the investment may not be recovered.  The amount of the impairment loss is measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in the statement of comprehensive income.  Any amounts related to that asset are removed from losses accumulated in the fair value reserve recognized in shareholders’ equity and are included in the statement of comprehensive income.  Reversals in respect of available-for-sale financial assets are not reversed through the statement of comprehensive income.  Any increase in fair value subsequent to an impairment loss is recognized directly in other comprehensive income until the assets are disposed of. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | For loans and receivables, a provision for impairment is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables.  Significant financial difficulties of the debtor or delinquency in payments are considered indicators that a trade receivable is impaired.  The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the asset’s original effective interest rate.  The carrying amount of the asset is reduced through the use of provision account and the amount of the loss is recognized in the statement of comprehensive income within general and administrative expenses.  When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables.  Subsequent recoveries of amounts previously written off are credited against general and administrative expenses in the statement of comprehensive income. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (p)   | Income taxes |
|-----------------|--------------|

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 3. | Significant accounting policies – continued |
|----|---------------------------------------------------|

| (q)   | Earnings per share |
|-----------------|--------------------|

| (r)   | Segment reporting |
|-----------------|-------------------|

| (s)   | Accounting standards issued adopted on January 1, 2013 |
|-----------------|--------------------------------------------------------|

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 3.   | Significant accounting policies – continued |
|----------------|---------------------------------------------------|

| (t)   | Accounting standards issued but not yet adopted |
|-----------------|-------------------------------------------------|

| 4.   | Significant accounting estimates and judgments |
|----------------|------------------------------------------------|

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 4.   | Significant accounting estimates and judgments – continued |
|----------------|------------------------------------------------------------------|

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 5.   | Impairment of mineral properties, plant and equipment |
|----------------|-------------------------------------------------------|

|   | · | Management’s current outlook for long-term silver and gold prices compared to the outlook as at December 31, 2012; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

|   | · | Forecast production levels and cost per tonne milled based on fiscal year 2014 budget; |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | Anticipated capital expenditures over the current Life of Mine assessment; |
|--------|--------|----------------------------------------------------------------------------|

|   | · | Taxation charges as a result of the Mexican Tax Reform which was passed in December 2013; and |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | An assessment of productive capacity incorporating Measured and Indicated and Inferred resource tonnes based on the Company’s most recently filed NI 43-101 report. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Total estimated production of silver and gold over the mine life plus residual value including fair value associated with the inferred resources; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Average long term silver and gold prices of $22.88 and $1,368 per ounce, respectively; |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | Average silver and gold grades of 154 g/t and 1.91 g/t, respectively; |
|--------|--------|-----------------------------------------------------------------------|

|   | · | Operating costs estimated at an average of $95 per tonne milled; |
|--------|--------|------------------------------------------------------------------|

|   | · | Total development and sustaining capital cost estimated at approximately $10,900 over the life of the mine; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | Discount rate of 8% on M&I resources and 10% on Inferred resources. |
|--------|--------|-------------------------------------------------------------------------|

| Mineral properties                | $    3,580 |
|-----------------------------------|--------------------------------|
| Plant and equipment               | 2,204                          |
| Land and buildings                | 371                            |
| Furniture, fixtures and equipment | 204                            |
|                              | $    6,359 |

|                               | 5% Change                     | 10% Change                                |
|------------------------------------|-------------------------------|-------------------------------------------|
| Decrease in average metal price    | $   6,150      | $   12,300                 |
| Decrease in average metal grades   |     6,050 |      12,100      |
| Increase in average cost per tonne |     3,450 |       6,900 |
|                               |                          |                                      |
|                               | 1% Change                     | 2% Change                                 |
| Increase in discount rate applied  | $   1,050      | $   2,050                  |

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 5.   | Impairment of mineral properties, plant and equipment – continued |
|----------------|-------------------------------------------------------------------------|

|   | · | Total estimated production of silver, gold, lead and zinc over the mine life plus residual value including fair value associated with the inferred resources; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | Average long term silver and gold prices of $22.88 and $1,368 per ounce; and lead and zinc prices of $1.01 and $1.02 per tonne, respectively; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | Average silver, gold, lead and zinc grades of 422 g/t; 0.51 g/t; 3.1 %/t; and 1.9 %/t, respectively; |
|--------|--------|------------------------------------------------------------------------------------------------------|
|   | · | Operating costs estimated at an average of $190 per tonne milled; |
|--------|--------|-------------------------------------------------------------------|
|   | · | Total development and sustaining capital cost estimated at approximately $16,500 over the life of the mine; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|
|   | · | Discount rate of 8% on M&I resources and 10% on Inferred resources. |
|--------|--------|-------------------------------------------------------------------------|

|                   | Change in assumption                             |
|------------------------|--------------------------------------------------|
| Average metal price    |                                             | (7%) |
| Average metal grades   |                                             | (11%) |
| Average cost per tonne |                                             | 23% |
|                   |                                             |   |
|                   | Rate required to equateNPV to the carrying value |
| Discount rate          |                                             | 21% |

| 6.   | Short-term investments |
|----------------|------------------------|

|                               |   | December 31,2013 |   |   | December 31,2012 |   |
|------------------------------------|--------|------------------|--------|--------|------------------|--------|
| Guaranteed investment certificates |   | $                | -      |   |             | $      | 5,085 |   |
| Marketable securities              |   |             | 18     |   |             |   | 79 |   |
|                               |   | $                | 18     |   |             | $      | 5,164 |   |

| 7.   | Trade and other receivables |
|----------------|-----------------------------|

|                           |   | December 31,2013 |   |   | December 31,2012 |   |
|--------------------------------|--------|------------------|--------|--------|------------------|--------|
| Trade accounts receivable      |   | $                | 11,473 |   |             | $      | 12,311 |   |
| Value added tax receivable     |   |             | 2,895  |   |             |   | 5,803 |   |
| Other                          |   |             | 117    |   |             |   | 216 |   |
|                           |   |             | 14,485 |   |             |   | 18,330 |   |
| Allowance for doubtful amounts |   |             | (2     | )      |             |   | (231 | ) |
|                           |   | $                | 14,483 |   |             | $      | 18,099 |   |

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 8.   | Inventories |
|----------------|-------------|

|                   |   | December 31,2013 |   |   | December 31,2012 |   |
|------------------------|--------|------------------|--------|--------|------------------|--------|
| Concentrate            |   | $                | 3,398  |   |             | $      | 3,432 |   |
| Ore stockpile          |   |             | 774    |   |             |   | 417 |   |
| Materials and supplies |   |             | 2,919  |   |             |   | 2,858 |   |
| Silver bullion         |   |             | 121    |   |             |   | 220 |   |
|                   |   | $                | 7,212  |   |             | $      | 6,927 |   |

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 9.   | Mineral properties, plant and equipment |
|----------------|-----------------------------------------|

|                                             |   | Mineral properties |   |   | Plant and equipment |   |   | Land and buildings |   |   | Furniture, fixtures and equipment |   | Total  |   |
|--------------------------------------------------|--------|--------------------|--------|--------|---------------------|--------|--------|-------------------------|--------|--------|-----------------------------------|--------|--------|--------|
| Cost                                             |   |               |   |   |                |   |   |                    |   |   |                              |   |
| Balance, January 1, 2012                         |   | $                  | 27,346 |   |                | $      | 24,358 |                    |   | $      | 4,005                             |   |   | $      | 2,156 |   |   | $ | 57,865 |   |
| Additions                                        |   |               | 13,049 |   |                |   | 9,653  |                    |   |   | 13                                |   |   |   | 616 |   |   |   | 23,331 |   |
| Change in rehabilitation provision               |   |               | 340    |   |                |   | -      |                    |   |   | -                                 |   |   |   | - |   |   |   | 340 |   |
| Disposals                                        |   |               | -      |   |                |   | (131   | )                       |   |   | -                                 |   |   |   | - |   |   |   | (131 | ) |
| Foreign exchange                                 |   |               | 1,504  |   |                |   | 1,345  |                    |   |   | 212                               |   |   |   | 142 |   |   |   | 3,203 |   |
| Balance, December 31, 2012                       |   | $                  | 42,239 |   |                | $      | 35,225 |                    |   | $      | 4,230                             |   |   | $      | 2,914 |   |   | $ | 84,608 |   |
| Reclassification from exploration and evaluation |   |               | 5,683  |   |                |   | -      |                    |   |   | -                                 |   |   |   | - |   |   |   | 5,683 |   |
| Additions                                        |   |               | 9,134  |   |                |   | 2,810  |                    |   |   | 31                                |   |   |   | 453 |   |   |   | 12,428 |   |
| Change in rehabilitation provision               |   |               | (85    | )      |                |   | -      |                    |   |   | -                                 |   |   |   | - |   |   |   | (85 | ) |
| Impairment charges (note 5)                      |   |               | (9,263 | )      |                |   | (2,204 | )                       |   |   | (371                              | )      |   |   | (204 | ) |   |   | (12,042 | ) |
| Disposals                                        |   |               | -      |   |                |   | (73    | )                       |   |   | -                                 |   |   |   | - |   |   |   | (73 | ) |
| Foreign exchange                                 |   |               | 2,386  |   |                |   | 2,022  |                    |   |   | 269                               |   |   |   | 97 |   |   |   | 4,774 |   |
| Balance, December 31, 2013                       |   | $                  | 50,094 |   |                | $      | 37,780 |                    |   | $      | 4,159                             |   |   | $      | 3,260 |   |   | $ | 95,293 |   |
|                                             |   |               |   |   |                |   |   |                    |   |   |                              |   |   |   |   |   |   |   |   |   |
| Accumulated depreciation                         |   |               |   |   |                |   |   |                    |   |   |                              |   |   |   |   |   |   |   |   |   |
| Balance, January 1, 2012                         |   | $                  | 9,403  |   |                | $      | 7,785  |                    |   | $      | 1,487                             |   |   | $      | 1,112 |   |   | $ | 19,787 |   |
| Amortization and depletion                       |   |               | 4,047  |   |                |   | 3,855  |                    |   |   | 89                                |   |   |   | 459 |   |   |   | 8,450 |   |
| Disposals                                        |   |               | (13    | )      |                |   | (82    | )                       |   |   | -                                 |   |   |   | (33 | ) |   |   | (128 | ) |
| Foreign exchange                                 |   |               | 501    |   |                |   | 406    |                    |   |   | 80                                |   |   |   | 61 |   |   |   | 1,048 |   |
| Balance, December 31, 2012                       |   | $                  | 13,938 |   |                | $      | 11,964 |                    |   | $      | 1,656                             |   |   | $      | 1,599 |   |   | $ | 29,157 |   |
| Amortization and depletion                       |   |               | 7,239  |   |                |   | 5,432  |                    |   |   | 107                               |   |   |   | 518 |   |   |   | 13,296 |   |
| Disposals                                        |   |               | -      |   |                |   | (62    | )                       |   |   | -                                 |   |   |   | - |   |   |   | (62 | ) |
| Foreign exchange                                 |   |               | 784    |   |                |   | 676    |                    |   |   | 96                                |   |   |   | 70 |   |   |   | 1,626 |   |
| Balance, December 31, 2013                       |   | $                  | 21,961 |   |                | $      | 18,010 |                    |   | $      | 1,859                             |   |   | $      | 2,187 |   |   | $ | 44,017 |   |
|                                             |   |               |   |   |                |   |   |                    |   |   |                              |   |   |   |   |   |   |   |   |   |
| Net book value                                   |   |               |   |   |                |   |   |                    |   |   |                              |   |   |   |   |   |   |   |   |   |
| December 31, 2012                                |   | $                  | 28,301 |   |                | $      | 23,261 |                    |   | $      | 2,574                             |   |   | $      | 1,315 |   |   | $ | 55,451 |   |
| December 31, 2013                                |   | $                  | 28,133 |   |                | $      | 19,770 |                    |   | $      | 2,300                             |   |   | $      | 1,073 |   |   | $ | 51,276 |   |

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 10.   | Exploration and evaluation assets |
|-----------------|-----------------------------------|

|                                                        |   | San Ignacio Property |   |   | Santa Rosa Property |   |   | El Horcon Property |   |   | Total  |   |
|-------------------------------------------------------------|--------|----------------------|--------|--------|---------------------|--------|--------|--------------------|--------|--------|--------|--------|
| Cost                                                        |   |                 |   |   |                |   |   |               |   |   |   |   |
| Balance, January 1, 2012                                    |   | $                    | 2,533  |   |                | $      | 1,335  |               |   | $      | -      |   |   | $ | 3,868 |   |
| Additions                                                   |   |                 | 1,583  |   |                |   | -      |               |   |   | 1,579  |   |   |   | 3,162 |   |
| Foreign exchange                                            |   |                 | 147    |   |                |   | 71     |               |   |   | 22     |   |   |   | 240 |   |
| Balance, December 31, 2012                                  |   | $                    | 4,263  |   |                | $      | 1,406  |               |   | $      | 1,601  |   |   | $ | 7,270 |   |
| Additions                                                   |   |                 | 1,177  |   |                |   | -      |               |   |   | -      |   |   |   | 1,177 |   |
| Foreign exchange                                            |   |                 | 243    |   |                |   | 81     |               |   |   | 93     |   |   |   | 417 |   |
|                                                        |   |                 |   |   |                |   |   |               |   |   |   |   |   |   |   |   |
| Reclassification to mineral properties, plant and equipment |   |                 | (5,683 | )      |                |   | -      |               |   |   | -      |   |   |   | (5,683 | ) |
| Balance, December 31, 2013                                  |   | $                    | -      |   |                | $      | 1,487  |               |   | $      | 1,694  |   |   | $ | 3,181 |   |

| 11.   | Intangible assets |
|-----------------|-------------------|

|                        |   | 2013   |   |   | 2012   |   |
|-----------------------------|--------|--------|--------|--------|--------|--------|
| Cost                        |   |   |   |   |   |   |
| Balance, January 1          |   | $      | 1,789  |   |   | $      | 941 |   |
| Additions                   |   |   | 256    |   |   |   | 811 |   |
| Foreign exchange            |   |   | 71     |   |   |   | 37 |   |
| Balance, December 31        |   | $      | 2,116  |   |   | $      | 1,789 |   |
|                        |   |   |   |   |   |   |   |   |
| Accumulated depreciation    |   |   |   |   |   |   |   |   |
| Balance, January 1          |   | $      | 1,084  |   |   | $      | 233 |   |
| Amortization and depletion  |   |   | 316    |   |   |   | 838 |   |
| Foreign exchange            |   |   | 51     |   |   |   | 13 |   |
| Balance, December 31        |   |   | 1,451  |   |   |   | 1,084 |   |
| Net book value, December 31 |   | $      | 665    |   |   | $      | 705 |   |

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 12.   | Trade and other payables |
|-----------------|--------------------------|

|                       |   | December 31,2013 |   |   | December 31,2012 |   |
|----------------------------|--------|------------------|--------|--------|------------------|--------|
| Trade and account payables |   | $                | 2,243  |   |             | $      | 3,102 |   |
| Value added tax payable    |   |             | 1,988  |   |             |   | 1,632 |   |
| Accrued liabilities        |   |             | 1,671  |   |             |   | 2,977 |   |
| Other payables             |   |             | 625    |   |             |   | 400 |   |
|                       |   | $                | 6,527  |   |             | $      | 8,111 |   |

| 13.   | Reclamation and remediation provision |
|-----------------|---------------------------------------|

|                         |   | December 31,2013 |   |   | December 31,2012 |   |
|------------------------------|--------|------------------|--------|--------|------------------|--------|
| Balance, beginning of year   |   | $                | 2,447  |   |             | $      | 2,154 |   |
| Change in estimates          |   |             | (144   | )      |             |   | 340 |   |
| Accretion expense            |   |             | 53     |   |             |   | 28 |   |
| Foreign exchange loss (gain) |   |             | 84     |   |             |   | (75 | ) |
| Balance, end of year         |   | $                | 2,440  |   |             | $      | 2,447 |   |

|   | · | The total undiscounted estimated cash flows of Topia and Guanajuato mines in conjunction, before estimated inflation, required to settle the Company’s estimated obligations is US$2,378 (2012 – US$2,378). |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The expected timing of payments totaling US$2,815 (including estimated inflation) is estimated as follows: US$1,052 in 2017, US$69 in 2018, US$71 in 2019, US$30 in each of 2020 and 2021, US$1,063 in 2022, and a total of US$500 due after 2022. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A risk-free rate of 3.00% for Topia and 1.72% for Guanajuato (2012 – 2.04% and 0.88% respectively) has been used to discount the cash flows. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.   | Share capital |
|-----------------|---------------|

| (a)   | Authorized: Unlimited number of common shares without par value Unlimited number of Class A preferred shares without par value, issuable in series Unlimited number of Class B preferred shares without par value, issuable in series |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Issued and fully paid: Common shares: 138,419,715 (December 31, 2012 – 137,860,052) Preferred shares: nil (December 31, 2012 – nil) |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 14. | Share capital – continued |
|-----|---------------------------------|

| (c)   | Share options |
|-----------------|---------------|

|                            |   |                 |   | As at        |      |   |    |   |      |      |   |   |       |   |   | As at        |     |
|---------------------------------|--------|----------------------|--------|--------------|-----------|--------|---------|--------|-----------|-----------|--------|--------|------------|--------|--------|--------------|----------|
| Exercise                        |   |                 |   | December 31, |      |   |    |   |      |      |   |   |       |   |   | December 31, |     |
| Price                           |   | Expiry date          |   | 2012         |      |   | Granted |   |      | Forfeited |   |   | Exercised  |   |   | 2013         |     |
| $0.45                           |   | February 8, 2014     |   |         | 605,000   |   |    |   | -         |      |   |   | -          |   |   |         | (226,000 | ) |   |   | 379,000 |   |
| $0.70                           |   | September 3, 2014    |   |         | 300,000   |   |    |   | -         |      |   |   | -          |   |   |         | (25,000  | ) |   |   | 275,000 |   |
| $0.90                           |   | December 2, 2014     |   |         | 162,000   |   |    |   | -         |      |   |   | (34,000    | )      |   |         | (78,000  | ) |   |   | 50,000 |   |
| $0.90                           |   | July 11, 2015        |   |         | 108,000   |   |    |   | -         |      |   |   | -          |   |   |         | (34,000  | ) |   |   | 74,000 |   |
| $1.15                           |   | October 17, 2015     |   |         | 1,500     |   |    |   | -         |      |   |   | -          |   |   |         | -        |   |   |   | 1,500 |   |
| $1.90                           |   | November 21, 2015    |   |         | 90,000    |   |    |   | -         |      |   |   | (40,000    | )      |   |         | -        |   |   |   | 50,000 |   |
| $1.34                           |   | March 14, 2016       |   |         | -         |   |    |   | 465,000   |      |   |   | (150,000   | )      |   |         | -        |   |   |   | 315,000 |   |
| $0.96                           |   | May 9, 2016          |   |         | -         |   |    |   | 690,000   |      |   |   | (75,000    | )      |   |         | (116,666 | ) |   |   | 498,334 |   |
| $0.70                           |   | June 27, 2016        |   |         | -         |   |    |   | 1,845,000 |      |   |   | (66,668    | )      |   |         | (79,997  | ) |   |   | 1,698,335 |   |
| $0.92                           |   | August 11, 2016      |   |         | -         |   |    |   | 110,000   |      |   |   | -          |   |   |         | -        |   |   |   | 110,000 |   |
| $0.75                           |   | November 11, 2016    |   |         | -         |   |    |   | 235,000   |      |   |   | (65,000    | )      |   |         | -        |   |   |   | 170,000 |   |
| $2.40                           |   | December 5, 2016     |   |         | 2,235,000 |   |    |   | -         |      |   |   | (530,000   | )      |   |         | -        |   |   |   | 1,705,000 |   |
| $2.25                           |   |  March 15, 2017 |   |         | 170,000   |   |    |   | -         |      |   |   | -          |   |   |         | -        |   |   |   | 170,000 |   |
| $1.76                           |   | May 17, 2017         |   |         | 240,000   |   |    |   | -         |      |   |   | (30,000    | )      |   |         | -        |   |   |   | 210,000 |   |
| $1.71                           |   | August 17, 2017      |   |         | 1,521,100 |   |    |   | -         |      |   |   | (618,000   | )      |   |         | -        |   |   |   | 903,100 |   |
| $1.78                           |   | November 18, 2017    |   |         | 205,000   |   |    |   | -         |      |   |   | (70,000    | )      |   |         | -        |   |   |   | 135,000 |   |
|                            |   |                 |   |         | 5,637,600 |   |    |   | 3,345,000 |      |   |   | (1,678,668 | )      |   |         | (559,663 | ) |   |   | 6,744,269 |   |
| Weighted average exercise price |   | $                    | 1.78   |         |      | $      | 0.85    |   |      | $         | 1.78   |   |       | $      | 0.69   |         |     | $ | 1.41 |   |

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

|   | Share capital – continued |
|--------|---------------------------------|

|                            |   |                 |   | Balance      |      |      |    |   |      |      |   |   |      |     |   | Balance      |     |
|---------------------------------|--------|----------------------|--------|--------------|-----------|-----------|---------|--------|-----------|-----------|--------|--------|-----------|----------|--------|--------------|----------|
| Exercise                        |   |                 |   | December 31, |      |      |    |   |      |      |   |   |      |     |   | December 31, |     |
| Price                           |   | Expiry date          |   | 2011         |      |      | Granted |   |      | Forfeited |   |   | Exercised |     |   | 2012         |     |
| $0.45                           |   | February 8, 2014     |   |         | 805,000   |      |    |   | -         |      |   |   | -         |     |   |         | (200,000 | ) |   |   | 605,000 |   |
| $0.70                           |   | September 3, 2014    |   |         | 315,000   |      |    |   | -         |      |   |   | -         |     |   |         | (15,000  | ) |   |   | 300,000 |   |
| $0.90                           |   | December 2, 2014     |   |         | 162,000   |      |    |   | -         |      |   |   | -         |     |   |         | -        |   |   |   | 162,000 |   |
| $0.90                           |   | July 11, 2015        |   |         | 118,000   |      |    |   | -         |      |   |   | -         |     |   |         | (10,000  | ) |   |   | 108,000 |   |
| $1.15                           |   | October 17, 2015     |   |         | 51,500    |      |    |   | -         |      |   |   | -         |     |   |         | (50,000  | ) |   |   | 1,500 |   |
| $1.90                           |   | November 21, 2015    |   |         | 90,000    |      |    |   | -         |      |   |   | -         |     |   |         | -        |   |   |   | 90,000 |   |
| $2.40                           |   | December 5, 2016     |   |         | 2,705,000 |      |    |   | -         |      |   |   | (240,000  | )        |   |         | (230,000 | )(1) |   |   | 2,235,000 |   |
| $2.25                           |   |  March 15, 2017 |   |         | -         |      |    |   | 170,000   |      |   |   | -         |     |   |         | -        |   |   |   | 170,000 |   |
| $1.76                           |   | May 17, 2017         |   |         | -         |      |    |   | 315,000   |      |   |   | -         |     |   |         | (75,000  | )(2) |   |   | 240,000 |   |
| $1.71                           |   | August 17, 2017      |   |         | -         |      |    |   | 1,708,500 |      |   |   | (136,600  | )        |   |         | (50,800  | ) |   |   | 1,521,100 |   |
| $1.78                           |   | November 18, 2017    |   |         | -         |      |    |   | 277,000   |      |   |   | (72,000   | )        |   |         | -        |   |   |   | 205,000 |   |
|                            |   |                 |   |         |      | 4,246,500 |    |   |      | 2,470,500 |   |   |      | (448,600 | )      |         |     | (630,800 | ) |   |   | 5,637,600 |   |
| Weighted average exercise price |   | $                    | 1.78   |         |      | $         | 1.76    |   |      | $         | 2.09   |   |      | $        | 1.49   |         |     | $ | 1.78 |   |

| (1)   | Includes cashless exercise of 125,000 options. |
|-----------------|------------------------------------------------|

| (2)   | Includes cashless exercise of 75,000 options. |
|-----------------|-----------------------------------------------|

|            |   |   | Stock options outstanding |      |      | Stock options exercisable                           |   |
|-----------------|--------|--------|---------------------------|-----------|-----------|-----------------------------------------------------|--------|
| Exercise prices |   |   | Stock options outstanding |      |      | Weighted average remaining contractual life (years) |   |   | Stock options exercisable |   |   | Weighted average exercise price |   |
| $0.45 to $0.90  |   |   |                      | 2,646,335 |      |                                                |   | 1.19 |   |   |   | 1,369,657 |   |   | $ | 0.66 |   |
| $0.92 to $1.71  |   |   |                      | 1,827,934 |      |                                                |   | 2.52 |   |   |   | 1,013,593 |   |   | $ | 1.22 |   |
| $1.76 to $1.78  |   |   |                      | 345,000   |      |                                                |   | 3.63 |   |   |   | 299,998 |   |   | $ | 1.77 |   |
| $1.90 to $2.25  |   |   |                      | 220,000   |      |                                                |   | 2.55 |   |   |   | 220,000 |   |   | $ | 2.08 |   |
| $2.40           |   |   |                      | 1,705,000 |      |                                                |   | 2.93 |   |   |   | 1,705,000 |   |   | $ | 2.40 |   |
|            |   |   |                      |      | 6,744,269 |                                                |   |   | 2.66 |   |   |   | 4,608,248 |   |   | $ | 1.65 |   |

|                    |   |   | 2013  | 2012  |
|-------------------------|--------|--------|-------|-------|
| Risk-free interest rate |   |   | 1.21% | 1.19% |
| Expected life (years)   |   |   | 2.63  | 2.00  |
| Annualized volatility   |   |   | 69%   | 75%   |
| Forfeiture rate         |   |   | 16%   | 16%   |

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 14. | Share capital – continued |
|-----|---------------------------------|

| (d)   | Warrants: The continuity of warrants for the years ended December 31, 2013 and 2012 are as follows: |
|-----------------|----------------------------------------------------------------------------------------------------------|

| Series                       | Exercise price          | Expiry date    | Balance,December 31, 2012 | Issued | Exercised | Expired   | Balance,December 31, 2013 |
|------------------------------|-------------------------|----------------|---------------------------|--------|-----------|-----------|---------------------------|
| Underwriters’ warrants | $   4.20 | April 12, 2013 | 316,250                   | -      | -         | (316,250) | -                         |

| Series                       | Exercise price          | Expiry date    | Balance,December 31, 2011 | Issued | Exercised | Expired | Balance,December 31, 2012 |
|------------------------------|-------------------------|----------------|---------------------------|--------|-----------|---------|---------------------------|
| Underwriters’ warrants | $   4.20 | April 12, 2013 | 316,250                   | -      | -         | -       | 316,250                   |

| (e)   | Earnings per share and diluted earnings per share Earnings per share and diluted earnings per share are as follows: |
|-----------------|--------------------------------------------------------------------------------------------------------------------------|

|                      |   | 2013   |   |   | 2012   |   |
|---------------------------|--------|--------|--------|--------|--------|--------|
| Earnings (loss) per share |   |   |   |   |   |   |
| Basic                     |   | $      | (0.09  | )      |   | $      | 0.04 |   |
| Diluted                   |   | $      | (0.09  | )      |   | $      | 0.04 |   |

|                           |   | 2013 |    |   | 2012   |   |
|--------------------------------|--------|------|---------|--------|--------|--------|
| Net income (loss) for the year |   | $    | (12,729 | )      |   | $      | 5,510 |   |

|                                                  |   | 2013   |        |   | 2012   |   |
|-------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Shares outstanding, Beginning of period               |   |   | 137,860,052 |   |   |   | 137,408,912 |   |
| Effect of share options exercised                     |   |   | 291,075     |   |   |   | 244,601 |   |
| Basic weighted average number of shares outstanding   |   |   | 138,151,127 |   |   |   | 137,653,513 |   |
| Effect of dilutive share options                      |   |   | -           |   |   |   | 1,056,273 |   |
| Diluted weighted average number of shares outstanding |   |   | 138,151,127 |   |   |   | 138,709,786 |   |

| 15.   | Foreign exchange gain (loss) |
|-----------------|------------------------------|

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 16.   | Cost of sales by nature |
|-----------------|-------------------------|

|                                    |   | 2013   |   |   | 2012   |   |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|
| Contractors, services and other charges |   | $      | 15,697 |   |   | $      | 11,673 |   |
| Amortization and depletion              |   |   | 13,047 |   |   |   | 8,684 |   |
| Materials                               |   |   | 6,214  |   |   |   | 7,254 |   |
| Salaries, wages and benefits            |   |   | 9,818  |   |   |   | 7,135 |   |
| Other expenses                          |   |   | 5,693  |   |   |   | 4,785 |   |
| Power                                   |   |   | 2,400  |   |   |   | 2,017 |   |
| Share-based payments                    |   |   | 445    |   |   |   | 385 |   |
|                                    |   | $      | 53,314 |   |   | $      | 41,933 |   |

| 17.   | General and administrative expenses by nature |
|-----------------|-----------------------------------------------|

|                             |   | 2013   |   |   | 2012   |   |
|----------------------------------|--------|--------|--------|--------|--------|--------|
| Professional and consulting fees |   | $      | 1,604  |   |   | $      | 2,810 |   |
| Salaries, wages and benefits     |   |   | 2,942  |   |   |   | 2,538 |   |
| Administrative expenses          |   |   | 1,630  |   |   |   | 2,269 |   |
| Share-based payments             |   |   | 380    |   |   |   | 1,071 |   |
| Travel expenses                  |   |   | 380    |   |   |   | 659 |   |
| Rent expenses                    |   |   | 600    |   |   |   | 532 |   |
| Amortization and depletion       |   |   | 300    |   |   |   | 206 |   |
|                             |   | $      | 7,836  |   |   | $      | 10,085 |   |

| 18.   | Exploration and evaluation expenses by nature |
|-----------------|-----------------------------------------------|

|                             |   | 2013   |   |   | 2012   |   |
|----------------------------------|--------|--------|--------|--------|--------|--------|
| Salaries, wages and benefits     |   | $      | 1,174  |   |   | $      | 1,127 |   |
| Professional and consulting fees |   |   | 552    |   |   |   | 430 |   |
| Services                         |   |   | 128    |   |   |   | 345 |   |
| Other expenses                   |   |   | 272    |   |   |   | 240 |   |
| Travel expenses                  |   |   | 180    |   |   |   | 167 |   |
| Share-based payments             |   |   | 86     |   |   |   | 73 |   |
|                             |   | $      | 2,392  |   |   | $      | 2,382 |   |

| 19.   | Finance costs |
|-----------------|---------------|

|                                               |   | 2013   |   |   | 2012   |   |
|----------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Accretion on reclamation and remediation provision |   | $      | 53     |   |   | $      | 28 |   |
| Lease interest                                     |   |   | -      |   |   |   | 6 |   |
|                                               |   | $      | 53     |   |   | $      | 34 |   |

| 20.   | Other (expenses) income |
|-----------------|-------------------------|

|                                             |   | 2013   |   |   | 2012   |   |
|--------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Insurance claims settlement                      |   | $      | 394    |   |   | $      | - |   |
| Scrap material sales                             |   |   | 75     |   |   |   | - |   |
| Silver bullion sales / (write-down net of sales) |   |   | (65    | )      |   |   | 35 |   |
| Gain (loss) on sale of fixed assets              |   |   | 51     |   |   |   | (302 | ) |
| Other                                            |   |   | 38     |   |   |   | 2 |   |
|                                             |   | $      | 493    |   |   | $      | (265 | ) |

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 21.   | Capital management |
|-----------------|--------------------|

|   | · | ensure there are adequate capital resources to safeguard the Company’s ability to continue as a going concern; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

|   | · | maintain adequate levels of funding to support the acquisition, exploration and development of mineral properties, and the operation of producing mines; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | maintain investor, creditor and market confidence to sustain future development of the business; and |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | provide returns to shareholders and benefits for other stakeholders. |
|--------|--------|----------------------------------------------------------------------|

| 22.   | Fair value of financial instruments |
|-----------------|-------------------------------------|

|   | · | Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities; |
|--------|--------|-------------------------------------------------------------------------------------------------|

|   | · | Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 3 – Inputs that are not based on observable market data |
|--------|--------|---------------------------------------------------------------------|

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 22. | Fair value of financial instruments – continued |
|-----|-------------------------------------------------------|

|                                           |   | Held at fair value |   |   | Loans and receivables |   |   | Fair value through profit and loss |   |   | Other financial assets and liabilities |   |   | Total  |   |   | Fair value hierarchy |   |
|------------------------------------------------|--------|--------------------|--------|--------|-----------------------|--------|--------|------------------------------------|--------|--------|----------------------------------------|--------|--------|--------|--------|--------|----------------------|--------|
| Financial Assets                               |   |               |   |   |                  |   |   |                               |   |   |                                   |   |   |   |   |   |                 |   |
| Cash and cash equivalents                      |   | $                  | -      |   |                  | $      | 21,760 |                               |   | $      | -                                      |   |   | $      | -      |   |                 | $      | 21,760 |   |   |   | n/a |   |
| Short term investments - Marketable securities |   |               | 18     |   |                  |   | -      |                               |   |   | -                                      |   |   |   | -      |   |                 |   | 18 |   |   | Level 1 |   |
| Embedded derivative                            |   |               | -      |   |                  |   | -      |                               |   |   | (162                                   | )      |   |   | -      |   |                 |   | (162 | ) |   | Level 1 |   |
| Trade and other receivables                    |   |               | -      |   |                  |   | 14,645 |                               |   |   | -                                      |   |   |   | -      |   |                 |   | 14,645 |   |   |   | n/a |   |
|                                           |   |               | 18     |   |                  |   | 36,405 |                               |   |   | (162                                   | )      |   |   | -      |   |                 |   | 36,261 |   |   |   |   |   |
| Financial Liabilities                          |   |               |   |   |                  |   |   |                               |   |   |                                   |   |   |   |   |   |                 |   |   |   |   |   |   |   |
| Trade and other payables                       |   |               | -      |   |                  |   | -      |                               |   |   | -                                      |   |   |   | (6,527 | )      |                 |   | (6,527 | ) |   |   | n/a |   |
|                                           |   | $                  | 18     |   |                  | $      | 36,405 |                               |   | $      | (162                                   | )      |   | $      | (6,527 | )      |                 | $      | 29,734 |   |   |   |   |   |

| 23.   | Financial risk exposure and risk management |
|-----------------|---------------------------------------------|

| (a)   | Concentration risk |
|-----------------|--------------------|

| (b)   | Credit risk |
|-----------------|-------------|

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 23. | Financial risk exposure and risk management – continued |
|-----|---------------------------------------------------------------|

|                 |   | December 31,2013 |   |   | December 31,2012 |   |
|----------------------|--------|------------------|--------|--------|------------------|--------|
| Less than 30 days    |   | $                | 5,107  |   |             | $      | 8,167 |   |
| Within 31 to 60 days |   |             | 3,727  |   |             |   | 3,298 |   |
| Within 61 to 90 days |   |             | 2,235  |   |             |   | 520 |   |
| More than 90 days    |   |             | 404    |   |             |   | 326 |   |
|                 |   | $                | 11,473 |   |             | $      | 12,311 |   |

| (c)   | Liquidity risk: |
|-----------------|-----------------|

|              |   | December 31,2013 |   |   | December 31,2012 |   |
|-------------------|--------|------------------|--------|--------|------------------|--------|
| Less than 1 month |   | $                | 6,152  |   |             | $      | 8,111 |   |
| 1 to 3 months     |   |             | 375    |   |             |   | - |   |
| 3 to 6 months     |   |             | -      |   |             |   | - |   |
| Over 6 months     |   |             | -      |   |             |   | - |   |
|              |   | $                | 6,527  |   |             | $      | 8,111 |   |

| (d)   | Market risk: |
|-----------------|--------------|

| (i)   | Currency risk |
|-----------------|---------------|

|                     |   | December 31,2013 |    |   | December 31,2012 |   |
|--------------------------|--------|------------------|---------|--------|------------------|--------|
| MXN peso per CDN dollar  |   | $                | 12.3168 |   |             | $      | 13.0310 |   |
| US dollar per CDN dollar |   | $                | 0.9402  |   |             | $      | 1.0051 |   |

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 23.   | Financial risk exposure and risk management - continued |
|-----------------|---------------------------------------------------------|

|                                                                   |   | 10% decrease inthe U.S. dollar |   |   | 10% increase inthe U.S. dollar |   |
|------------------------------------------------------------------------|--------|--------------------------------|--------|--------|--------------------------------|--------|
| Decrease (increase) in net income for the year ended December 31, 2013 |   | $                              | 1,651  |   |                           | $      | (1,651 | ) |

|                                                                   |   | 10% decrease inthe Mexican peso |   |   | 10% increase inthe Mexican peso |   |
|------------------------------------------------------------------------|--------|---------------------------------|--------|--------|---------------------------------|--------|
| Decrease (increase) in net income for the year ended December 31, 2013 |   | $                               | 6,802  |   |                            | $      | (6,802 | ) |

|   | (iii) | Commodity price risk |
|--------|-------|----------------------|

|   | (iv) | Exchange risk The fair value of marketable securities is based on quoted market prices which the shares of the investments can be exchanged for. The exchange price of the shares may fluctuate significantly depending on various other market factors. To mitigate the risk, the Company’s approach is to maintain minimal investments in marketable securities. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 24.   | Income taxes |
|-----------------|--------------|

| (a)   | Income tax expense |
|-----------------|--------------------|

|                                   |   | 2013   |   |   | 2012   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|
| Current income tax expense             |   | $      | 183    |   |   | $      | 592 |   |
| Deferred income tax expense (recovery) |   |   | (3,661 | )      |   |   | 3,608 |   |
| Income tax expense (recovery)          |   | $      | (3,478 | )      |   | $      | 4,200 |   |

|                                                                |   | 2013   |    |   | 2012   |   |
|---------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Net income before tax                                               |   | $      | (16,207 | )      |   | $      | 9,710 |   |
| Canadian statutory income tax rate                                  |   |   | 25.75   | %      |   |   | 25.0 | % |
|                                                                |   |   |    |   |   |   |   |   |
| Income tax expense at the statutory income tax rate                 |   | $      | (4,173  | )      |   | $      | 2,428 |   |
| Difference in statutory tax rates in foreign jurisdictions          |   |   | (841    | )      |   |   | 480 |   |
| Effect of changes in future income tax rates                        |   |   | (400    | )      |   |   | 434 |   |
| Non-deductible expenses                                             |   |   | 1,128   |   |   |   | 1,143 |   |
| Benefit of tax attributes not previously recognized and other items |   |   | (1,406  | )      |   |   | (277 | ) |
| Change in prior years                                               |   |   | (330    | )      |   |   | - |   |
| Special mining duties                                               |   |   | 2,579   |   |   |   | - |   |
| Non-taxable items                                                   |   |   | (35     | )      |   |   | (8 | ) |
| Income tax expense (recovery)                                       |   | $      | (3,478  | )      |   | $      | 4,200 |   |

| (b)   | Deferred income tax assets and liabilities |
|-----------------|--------------------------------------------|

|                            |   | December 31, 2013 |   |   | December 31, 2012 |   |
|---------------------------------|--------|-------------------|--------|--------|-------------------|--------|
| Deferred income tax assets      |   |              | 247    |   |              | $      | 253 |   |
| Deferred income tax liabilities |   |              | (2,332 | )      |              |   | (5,746 | ) |
|                            |   |              | (2,085 | )      |              | $      | (5,493 | ) |

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 24.   | Income taxes – continued |
|-----------------|--------------------------------|

|                                       |   | December 31, 2013 |    |   | December 31, 2012 |   |
|--------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
| Tax losses carried forward                 |   |              | 8,498   |   |              | $      | 4,902 |   |
| Provision for mine closure and restoration |   |              | 860     |   |              |   | 702 |   |
| Property, plant and equipment              |   |              | (11,881 | )      |              |   | (11,405 | ) |
| Other deductible temporary differences     |   |              | 438     |   |              |   | 308 |   |
| Net deferred income tax liabilities        |   |              | (2,085  | )      |              | $      | (5,493 | ) |

|                                    |   | December 31,2013 |   |   | December 31,2012 |   |
|-----------------------------------------|--------|------------------|--------|--------|------------------|--------|
| Tax losses carried forward              |   | $                | 1,736  |   |             | $      | 2,549 |   |
| Property, plant and equipment           |   |             | 350    |   |             |   | 324 |   |
| Other deductible temporary differences  |   |             | 212    |   |             |   | 377 |   |
| Unrecognized deferred income tax assets |   | $                | 2,298  |   |             | $      | 3,250 |   |

| 25.   | Related party transactions |
|-----------------|----------------------------|

|                                                                                                |   | 2013   |   |   | 2012   |   |
|-----------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Consulting fees paid or accrued to companies controlled by directors of the Company                 |   | $      | 461    |   |   | $      | 1,045 |   |
| Director fees paid or accrued                                                                       |   |   | 205    |   |   |   | 233 |   |
| Consulting fees paid to a company with a common director of the Company                             |   |   | -      |   |   |   | 34 |   |
| Office and administration fees paid or accrued to a company controlled by a director of the Company |   |   | -      |   |   |   | 21 |   |
| Cost recovery received from a company with a common director of the Company                         |   |   | (175   | )      |   |   | (148 | ) |
|                                                                                                |   | $      | 491    |   |   | $      | 1,185 |   |

|                                                                                  |   | 2013   |   |   | 2012   |   |
|---------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Short-term benefits (includes salaries and benefits, consulting and management fees ) |   | $      | 2,345  |   |   | $      | 2,523 |   |
| Termination benefits                                                                  |   |   | 754    |   |   |   | 1,132 |   |
| Share-based payments                                                                  |   |   | 366    |   |   |   | 898 |   |
|                                                                                  |   | $      | 3,465  |   |   | $      | 4,553 |   |

----

|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 26.   | Commitments and contingencies |
|-----------------|-------------------------------|

| (a)   | Commitments As of December 31, 2013 the Company had the following commitments: |
|-----------------|-------------------------------------------------------------------------------------|

|                                         |   | Total  |   |   | 1 year |   |   | 2-3 years |   |   | 4-5 years |   |
|----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|--------|-----------|--------|
| Operating lease payments                     |   | $      | 915    |   |   | $      | 492    |      |   | $      | 397       |   |   | $ | 26 |   |
| Drilling services                       |   |   | 994    |   |   |   | 994    |      |   |   | -         |   |   |   | - |   |
| Equipment purchases with third party vendors |   |   | 688    |   |   |   | 688    |      |   |   | -         |   |   |   | - |   |
| Environmental program                        |   |   | 10,791 |   |   |   | 2,081  |      |   |   | 4,194     |   |   |   | 4,516 |   |
| Total commitments                            |   | $      | 13,388 |   |   | $      | 4,255  |      |   | $      | 4,591     |   |   | $ | 4,542 |   |

| (b)   | Contingencies As of December 31, 2013, the Company had not fully secured mineral property titles for approximately 5,000 of its 7,908 hectares related to the El Horcon Project. Certain of the Company’s title claims have been cancelled due to what the Company believes is an administrative error on the part of the government agency which manages mineral claims in Mexico. The Company is currently in the process of attempting to reinstate the claims. Neither the status of the claims or the process to reinstate the claims has affected the Company’s permitting and drilling programs. The Company expects to be successful in reinstating the claims and therefore has not recorded any provision against the carrying value of the El Horcon Project. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 27.   | Operating segments |
|-----------------|--------------------|

| 2013                                    |   | Mexico        |    |   | Canada |   |   |     |   |
|-----------------------------------------|--------|---------------|---------|--------|--------|--------|--------|----------|--------|
|                                    |   | Guanajuato(1) |    |   | Topia  |   |   | Other(2) |   |   | Corporate |   |   | Total |   |   | Corporate |   |   | Total |   |
| External mineral sales                  |   | $             | 38,020  |   |   | $      | 15,934 |     |   | $ | - |   |   | $ | - |   |   | $ | 53,954 |   |   | $ | - |   |   | $ | 53,954 |   |
| Amortization and depletion              |   |          | 10,360  |   |   |   | 2,688  |     |   |   | - |   |   |   | 163 |   |   |   | 13,211 |   |   |   | 136 |   |   |   | 13,347 |   |
| Share-based payments                    |   |          | 354     |   |   |   | 91     |     |   |   | - |   |   |   | - |   |   |   | 445 |   |   |   | 466 |   |   |   | 911 |   |
| Impairment charges                      |   |          | 12,042  |   |   |   | -      |     |   |   | - |   |   |   | - |   |   |   | 12,042 |   |   |   | - |   |   |   | 12,042 |   |
| Interest income                         |   |          | 1       |   |   |   | -      |     |   |   | - |   |   |   | 136 |   |   |   | 137 |   |   |   | 198 |   |   |   | 335 |   |
| Finance costs                           |   |          | 20      |   |   |   | 33     |     |   |   | - |   |   |   | - |   |   |   | 53 |   |   |   | - |   |   |   | 53 |   |
| Income (loss) before income taxes       |   |          | (11,649 | )      |   |   | 199    |     |   |   | (720 | ) |   |   | 3,940 |   |   |   | (8,230 | ) |   |   | (7,977 | ) |   |   | (16,207 | ) |
| Net income (loss) for the year          |   |          | (12,014 | )      |   |   | (45    | )        |   |   | (720 | ) |   |   | 8,027 |   |   |   | (4,752 | ) |   |   | (7,977 | ) |   |   | (12,729 | ) |
| Capital expenditures                    |   |          | 10,775  |   |   |   | 1,653  |     |   |   | 1,177 |   |   |   | - |   |   |   | 13,605 |   |   |   | - |   |   |   | 13,605 |   |
|                                    |   |          |    |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                            |   |          | 43,399  |   |   |   | 25,634 |     |   |   | 3,181 |   |   |   | 7,550 |   |   |   | 79,764 |   |   |   | 20,355 |   |   |   | 100,119 |   |
| Total liabilities                       |   |          | 4,994   |   |   |   | 2,941  |     |   |   | - |   |   |   | 2,387 |   |   |   | 10,322 |   |   |   | 977 |   |   |   | 11,299 |   |
| Mineral properties, plant and equipment |   |          | 31,541  |   |   |   | 19,499 |     |   |   | - |   |   |   | - |   |   |   | 51,040 |   |   |   | 236 |   |   |   | 51,276 |   |
| Exploration and evaluation assets       |   | $             | -       |   |   | $      | -      |     |   | $ | 3,181 |   |   | $ | - |   |   | $ | 3,181 |   |   | $ | - |   |   | $ | 3,181 |   |

| (1)   | Includes the Company’s San Ignacio assets as part of the Guanajuato complex following the reclassification from exploration and evaluation assets to mineral properties, plant and equipment as at December 31, 2013. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Includes the Company’s exploration and evaluation assets of Santa Rosa and El Horcon. |
|-----------------|---------------------------------------------------------------------------------------------|

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|   | GREAT PANTHER SILVER LIMITED |
|--------|------------------------------|

|   | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
|--------|------------------------------------------------|

|   | (Expressed in thousands of Canadian dollars, except share data)  For the years ended December 31, 2013 and 2012 |
|--------|----------------------------------------------------------------------------------------------------------------------|

| 27. | Operating segments – continued |
|-----|--------------------------------------|

| 2012                                    |   | Mexico     |   |   | Canada |   |   |     |   |
|-----------------------------------------|--------|------------|--------|--------|--------|--------|--------|----------|--------|
|                                    |   | Guanajuato |   |   | Topia  |   |   | Other(1) |   |   | Corporate |   |   | Total |   |   | Corporate |   |   | Total |   |
| External mineral sales                  |   | $          | 44,104 |   |   | $      | 17,035 |     |   | $ | - |   |   | $ | - |   |   | $ | 61,139 |   |   | $ | - |   |   | $ | 61,139 |   |
| Amortization and depletion              |   |       | 6,590  |   |   |   | 2,094  |     |   |   | - |   |   |   | - |   |   |   | 8,684 |   |   |   | 206 |   |   |   | 8,890 |   |
| Share-based payments                    |   |       | 339    |   |   |   | 46     |     |   |   | - |   |   |   | - |   |   |   | 385 |   |   |   | 1,144 |   |   |   | 1,529 |   |
| Interest income                         |   |       | -      |   |   |   | -      |     |   |   | - |   |   |   | 103 |   |   |   | 103 |   |   |   | 339 |   |   |   | 442 |   |
| Finance costs                           |   |       | 9      |   |   |   | 19     |     |   |   | - |   |   |   | 5 |   |   |   | 33 |   |   |   | 1 |   |   |   | 34 |   |
| Income (loss) before income taxes       |   |       | 11,445 |   |   |   | 2,270  |     |   |   | (457 | ) |   |   | 558 |   |   |   | 13,816 |   |   |   | (4,106 | ) |   |   | 9,710 |   |
| Net income (loss) for the year          |   |       | 11,208 |   |   |   | 2,169  |     |   |   | (457 | ) |   |   | (3,304 | ) |   |   | 9,616 |   |   |   | (4,106 | ) |   |   | 5,510 |   |
| Capital expenditures                    |   |       | 16,384 |   |   |   | 6,787  |     |   |   | 3,162 |   |   |   | - |   |   |   | 26,333 |   |   |   | 160 |   |   |   | 26,493 |   |
|                                    |   |       |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                            |   |       | 44,063 |   |   |   | 23,323 |     |   |   | 7,270 |   |   |   | 9,204 |   |   |   | 83,860 |   |   |   | 32,869 |   |   |   | 116,729 |   |
| Total liabilities                       |   |       | 6,457  |   |   |   | 1,981  |     |   |   | - |   |   |   | 6,642 |   |   |   | 15,080 |   |   |   | 1,624 |   |   |   | 16,704 |   |
| Mineral properties, plant and equipment |   |       | 35,817 |   |   |   | 19,456 |     |   |   | - |   |   |   | - |   |   |   | 55,273 |   |   |   | 178 |   |   |   | 55,451 |   |
| Exploration and evaluation assets       |   | $          | -      |   |   | $      | -      |     |   | $ | 7,270 |   |   | $ | - |   |   | $ | 7,270 |   |   | $ | - |   |   | $ | 7,270 |   |

| (1)   | Includes the Company’s exploration and evaluation assets of San Ignacio, Santa Rosa and El Horcon. |
|-----------------|----------------------------------------------------------------------------------------------------------|

|                         |   | 2013   |   |   | 2012   |   |
|------------------------------|--------|--------|--------|--------|--------|--------|
| Silver                       |   | $      | 36,176 |   |   | $      | 45,888 |   |
| Gold                         |   |   | 19,197 |   |   |   | 17,234 |   |
| Zinc                         |   |   | 2,482  |   |   |   | 2,109 |   |
| Lead                         |   |   | 2,311  |   |   |   | 1,772 |   |
| Ore processing revenues      |   |   | 686    |   |   |   | 701 |   |
| Smelter and refining charges |   |   | (6,898 | )      |   |   | (6,565 | ) |
|                         |   | $      | 53,954 |   |   | $      | 61,139 |   |

| Customer        | Segment    |   | 2013   |   |   | 2012   |   |
|-----------------|------------|--------|--------|--------|--------|--------|--------|
| Customer A      | Guanajuato |   | $      | 18,720 |   |   | $      | 13,826 |   |
| Customer B      | Guanajuato |   |   | 19,250 |   |   |   | - |   |
| Customer C      | Guanajuato |   |   | -      |   |   |   | 27,128 |   |
| Customer D      | Guanajuato |   |   | -      |   |   |   | 1,709 |   |
| Customer A      | Topia      |   |   | 15,204 |   |   |   | - |   |
| Customer B      | Topia      |   |   | -      |   |   |   | 16,245 |   |
| Other customers |       |   |   | 780    |   |   |   | 2,231 |   |
|            |       |   | $      | 53,954 |   |   | $      | 61,139 |   |

| 28.   | Subsequent events |
|-----------------|-------------------|

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