---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 20-F/A(Amendment No. 1)

[   ] REGISTRATION STATEMENT PURSUANT TO SECTION 12
(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2011

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15
(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number 001-35043

GREAT PANTHER SILVER
LIMITED(Formerly Great Panther Resources Limited)

___________________ (Exact name of Registrant as specified
in its charter)

Not Applicable(Translation of
Registrant's Name into English)

British Columbia, Canada(Jurisdiction
of incorporation or organization)

2100-1177 West Hastings StreetVancouver,
British Columbia, Canada V6E 2K3(Address of principal
executive offices)

Securities registered or to be registered pursuant to Section
12(b) of the Act:

|Common Shares Without Par Value | NYSE Amex Equities                       
|------------------------------- | -----------------------------------------
|Title of Class                  | Name of Each Exchange on Which Registered

Securities registered or to be registered pursuant to Section
12(g) of the Act.

Not Applicable.

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- 2 -

Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act.

Not Applicable

Indicate the number of outstanding shares of each of the
Registrant's classes of capital or common stock as of the close of the period
covered by the annual report.

There were 137,408,912 common shares, without par value,
issued and outstanding as of December 31, 2011.

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. [  
] YES     [X] NO

If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934. [   ]
YES     [X] NO

Note  Checking the box above will not relieve any registrant
required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] YES   
 [   ] NO

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
YES [   ]     NO [   ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of accelerated filer and large accelerated filer in Rule 12b-2 of
the Exchange Act. (Check one):

|Large accelerated filer [   ] | Accelerated filer [X] | Non-accelerated filer [   ]
|----------------------------- | --------------------- | ---------------------------

Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:

US GAAP [   ]
    International Financial
      Reporting Standards as issued
    Other [   ]by the International Accounting
      Standards Board [X]


If Other has been checked in response to the previous section,
indicate by check mark which financial statement item the registrant has elected
to follow. [   ] Item 17     [  
] Item 18

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- 3 -

If this is an annual report, indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[   ] YES     [X] NO

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court. [   ]
YES     [   ] NO

EXPLANATORY NOTE

This Amendment No. 1 (the Amendment No. 1) to the Annual
Report on Form 20-F for the fiscal year ended December 31, 2011 originally filed
with the Securities and Exchange Commission (the SEC) on March 14, 2012 (2011
Form 20-F) is being filed in response to certain comments on the 2011 Form 20-F
from the SEC. Item 18 has been amended to include an audit opinion that refers
to and opines on International Financial Reporting Standards as issued by the
International Accounting Standards Board.

Except as provided above, no other changes have been made to
the 2011 Form 20-F or the Companys audited financial statements as included in
the 2011 Form 20-F. Amendment No. 1 does not reflect events occurring after the
filing of the 2011 Form 20-F. Pursuant to Rule 12b-15 under the Securities
Exchange Act of 1934, as amended, the complete texts of Items 18 and 19 are
repeated in this Amendment No. 1.

This Amendment No. 1 consists solely of the preceding cover
page, this explanatory note, Items 18 and 19, the signature page, and restated
exhibits 12.1, 12.2, 13.1 and 13.2.

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- 4 -

PART III

ITEM 18        
Financial Statements

Financial Statements Filed as Part of the Annual Report:

|- | Report of Independent Registered Public Accounting Firm
  dated March 9, 2012.                                     
|- | -------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                    
|- | Consolidated statements of financial position as at
      December 31, 2011, December 31, 2010 and January 1, 2010.
|  |                                                                                                                    
|- | Consolidated statements of comprehensive income for the
      years ended December 31, 2011 and 2010.              
|  |                                                                                                                    
|- | Consolidated statements of changes in shareholders
      equity for the years ended December 31, 2011 and 2010.   
|  |                                                                                                                    
|- | Consolidated statements of cash flows for the years ended
      December 31, 2011 and 2010.                        
|  |                                                                                                                    
|- | Notes to consolidated financial statements                                                                         

ITEM 19        
Exhibits

The following exhibits are being filed as part of this annual report, or are
incorporated by reference where indicated:

|1.   | Articles of Incorporation and By-laws:                                                                                                                                                                                                                                                                                                      
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1  | Continuation Application under the Business
    Corporation Act (British Columbia) (incorporated by reference from our
    Registration Statement on Form 20-F, filed on August 10, 2004).                                                                                                                                                  
|1.2  | Certificate of Continuation dated July 9, 2004
      (incorporated by reference from our Registration Statement on Form 20-F,
      filed on August 10, 2004).                                                                                                                                                                              
|1..3 | Notice of Articles (incorporated by reference
    from our Registration Statement on Form 20-F, filed on August 10, 2004).                                                                                                                                                                                                                  
|1.4  | Bylaws (incorporated by reference from our Registration
      Statement on Form 20-F, filed on August 10, 2004).                                                                                                                                                                                                                            
|1.5  | Certificate of Name Change to Great Panther
    Silver Limited.                                                                                                                                                                                                                                                                             
|2.   | Instruments Defining Rights of Security Holders                                                                                                                                                                                                                                                                                             
|2.1  | Shareholder Rights Plan (incorporated by
    reference from our Registration Statement on Form 20-F, filed on August 10,
    2004, amended March 7, 2008).                                                                                                                                                                                  
|4.   | Material Contracts                                                                                                                                                                                                                                                                                                                          
|4.1  | Share Purchase Agreement dated December 9, 2003
    with Robert A. Archer and Ing. Francisco Ramos Sanchez (incorporated by
    reference from our Registration Statement on Form 20-F, filed on August 10,
    2004).                                                                                                                      
|4.2  | Option Agreement dated February 11, 2004 between our
  subsidiary, Minera Mexicana el Rosario, S.A. de C.V. and Eduardo Rodriguez
  Chavez, acting in representation of Alfredo Rodriguez Chavez (incorporated by
  reference from our Registration Statement on Form 20-F, filed on August 10,
  2004).                                    
|4.3  | Agreement dated February 18, 2004 between our subsidiary, Minera Mexicana el
  Rosario, S.A. de C.V. and Cia. Minera des Canelas y Topia, S.A. de C.V., MET-MEX
  Penoles, S.A. de C.V. and Minera Mexicana la Cienega, S.A. de C.V.
  (incorporated by reference from our Registration Statement on Form 20-F, filed
  on August 10, 2004).
|4.4  | Agreement dated February 28, 2004 between our subsidiary, Minera Mexicana el
  Rosario, S.A. de C.V. and Carolos Teodoro Ortiz Rodriquez, Abelardo Garza
  Hernanadez and Minera San Miguel de los Tarros, S.A. de C.V. (incorporated by
  reference from our Registration Statement on Form 20-F, filed on August 10,
  2004).             
|4.5  | Letter of Intent dated January 19, 2005 with Minera Acero del Fuego, S.A. de
  C.V. (Virimoa Project) (incorporated by reference from our Registration
  Statement on Form 20-F, filed on July 15, 2005).                                                                                                                                   
|4.6  | Letter of Intent dated January 4, 2005 between our Company and Compania Minera
  de Canelas y Topia, S.A. de C.V.                                                                                                                                                                                                                           
|4.7  | Purchase Agreement dated June 30, 2005 between our Company and Compania Minera
  de Canelas y Topia, S.A. de C.V.                                                                                                                                                                                                                           
|4.8  | Purchase Agreement dated October 25, 2005 between our Company and the Sociedad
  Coopertiva Minero Metalurgics Santa Fe de Guanajuato.                                                                                                                                                                                                      
|4.9  | Letter of Intent dated April 26, 2006 between our Company and Minera Apollo
  S.A. de C.V.                                                                                                                                                                                                                                                  
|4.10 | Letter of Intent dated December 7, 2006 between our Company and Altair
  Ventures Incorporated.                                                                                                                                                                                                                                             
|4.11 | Option Agreement dated February 2, 2007 between our Company and Altair
  Ventures Incorporated (incorporated by reference from our Registration
  Statement on Form 20-F, filed on April 3, 2008).                                                                                                                                          
|4.12 | Shareholder Rights Plan Agreement dated March 7, 2008 between the Company and
  Computershare Investor Services Inc. (incorporated by reference from our
  Registration Statement on Form 20-F, filed on April 3, 2008).                                                                                                                    
|4.13 | Option Termination and Debt Settlement Agreement with Altair on the San
  Antonio property dated February 1, 2010 (incorporated by reference from our
  Registration Statement on Form 20-F, filed on March 24, 2010).                                                                                                                      
|4.14 | Acquisition Agreement dated July 12, 2011 between our Company and Compania
  Minera Blanca Alicia, S.A. de C.V. (incorporated by reference from our annual
  report on Form 20-F for the year ended December 31, 2011, filed on March 14,
  2012)                                                                                           
|8.   | Subsidiaries                                                                                                                                                                                                                                                                                                                                
|8.1  | Minera Mexicana el Rosario, S.A. de C.V. (incorporated by reference from our
  Registration Statement on Form 20-F, filed on August 10, 2004).                                                                                                                                                                                              
|8.2  | New Age Investments Inc. (incorporated by reference from our Registration
  Statement on Form 20-F, filed on August 10, 2004).                                                                                                                                                                                                              
|8.3  | Metalicos de Durango, S.A. de C.V.                                                                                                                                                                                                                                                                                                          
|8.4  | Minera de Villa Seca, S.A. de C.V.                                                                                                                                                                                                                                                                                                          
|8.5  | Great Panther Silver Peru S.A.C.                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                             

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- 5 -

|11.   | Code of Ethics                                                                                                                                                              
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|11.1  | Code of Ethics (incorporated by reference from our Registration Statement on
  Form 20-F, filed on July 15, 2005, updated August 2007, September 2008 and
  September 2010).
|12.   | 302 Certification                                                                                                                                                           
|12.1* | Section 302 Certification under Sarbanes-Oxley Act of 2002 for Robert A.
  Archer.                                                                                          
|12.2* | Section 302 Certification under Sarbanes-Oxley Act of 2002 for Martin B.
  Carsky.                                                                                          
|13.   | 906 Certification                                                                                                                                                           
|13.1* | Section 906 Certification under Sarbanes-Oxley Act of 2002 for Robert A.
  Archer.                                                                                          
|13.2* | Section 906 Certification under Sarbanes-Oxley Act of 2002 for Martin B.
  Carsky.                                                                                          
|15.   | Additional Exhibits                                                                                                                                                         
|15.1  | Summary Report on the San Antonio Gold Prospect dated November 2003
  (incorporated by reference from our Registration Statement on Form 20-F, filed
  on August 10, 2004). 
|15.2  | Summary Report on the Topia Project dated November 20, 2003 (incorporated by
  reference from our Registration Statement on Form 20-F, filed on August 10,
  2004).         
|15.3  | Map of Topia Property (incorporated by reference from our Registration
  Statement on Form 20-F/A, filed on February 6, 2009).                                              
|15.4  | Map of Guanajuato Property (incorporated by reference from our Registration
  Statement on Form 20-F/A, filed on February 6, 2009).                                         
|15.5  | Map of Mapimi Property (incorporated by reference from our Registration
  Statement on Form 20-F/A, filed on February 6, 2009).                                             
|      |                                                                                                                                                                             
|*     | Filed herewith.                                                                                                                                                             

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- 6 -

SIGNATURES

The registrant hereby certifies that it meets all of the
requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on its behalf.

GREAT PANTHER SILVER LIMITED(Registrant)

|/s/ Robert A.
      Archer                 | 
|------------------------------------------ | 
|Robert A. Archer                           | 
|President and Chief Executive Officer      | 
|(Principal Executive Officer)              | 
|                                           | 
|                                           | 
|/s/ Martin B.
      Carsky                 | 
|Martin B. Carsky                           | 
|Chief Financial Officer                    | 
|(Principal Financial Officer and Principal | 
|Accounting Officer)                        | 
|                                           | 
|Date: March 29, 2012                       | 

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GREAT PANTHER SILVER LIMITED

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED
   DECEMBER 31, 2011 and 2010

Expressed in Canadian Dollars

---



GREAT PANTHER SILVER LIMITED

MANAGEMENTS STATEMENT OF RESPONSIBILITY FOR
  FINANCIAL REPORTING

The management of Great Panther Silver Limited is responsible
  for the presentation and preparation of the accompanying consolidated financial
  statements of Great Panther Silver Limited and all related financial information
  contained in this Annual Report, including Managements Discussion and Analysis.

The consolidated financial statements have been prepared in
  accordance with International Financial Reporting Standards. They include
  certain amounts that are based on estimates and judgments of management.
  Financial information presented elsewhere in the Annual Report is consistent
  with that contained in the consolidated financial statements.

Management is responsible for establishing and maintaining
  adequate internal control over financial reporting. Under the supervision and
  with the participation of the Companys Chief Executive Officer and Chief
  Financial Officer, management has a process in place to evaluate internal
  control over financial reporting based on the criteria established by the
  Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. We, as Chief Executive Officer and
  Chief Financial Officer, will certify our annual filings with the CSA and SEC as
  required in Canada by National Instrument 52-109 and in the United States as
  required by the Securities Exchange Act of 1934.

The Companys Audit Committee is appointed by the Board of
  Directors annually and is comprised of three independent directors. The Audit
  Committee meets quarterly to review the Companys consolidated financial
  statements and Managements Discussion and Analysis, and on an annual basis, the
  independent auditors report. The Audit Committee recommends to the Board of
  Directors the external auditors to be appointed by the shareholders at each
  annual meeting and reviews the independence and effectiveness of their work. The
  independent auditors have unrestricted access to the Company, the Audit
  Committee, and the Board of Directors.

MANAGEMENTS REPORT ON INTERNAL CONTROL OVER
  FINANCIAL REPORTING

Management is responsible for establishing and maintaining
  adequate internal control over financial reporting, as such term is defined in
  Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934 (the
  Exchange Act).

Under the supervision and with the participation of our
  Company's Chief Executive Officer and Chief Financial Officer, management
  conducted an evaluation of the effectiveness of our internal control over
  financial reporting, as of December 31, 2011, based on the framework set forth
  in Internal Control-Integrated Frameworkissued by the Committee of
  Sponsoring Organizations of the Treadway Commission (COSO). Based on this
  evaluation, management concluded that our internal control over financial
  reporting was effective as of December 31, 2011.

KPMG LLP, an independent registered public accounting firm, has
  audited the effectiveness of our internal control over financial reporting as of
  December 31, 2011, as stated in their report which appears herein.

|"Robert A. Archer"      | "Martin B. Carsky"     
|----------------------- | -----------------------
|Chief Executive Officer | Chief Financial Officer
|                        |                        
|March 9, 2012           | March 9, 2012          

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KPMG LLP
    Telephone
    (604) 691-3000Chartered Accountants
    Fax
    (604) 691-3031PO Box 10426 777 Dunsmuir Street
    Internet
    www.kpmg.caVancouver BC V7Y 1K3Canada


INDEPENDENT AUDITORS REPORT OF REGISTERED
PUBLIC
ACCOUNTING FIRM

To Shareholders & Board of Directors of Great Panther
Silver Limited

We have audited the accompanying consolidated financial
statements of Great Panther Silver Limited, which comprise the consolidated
statements of financial position as at December 31, 2011, December 31, 2010 and
January 1, 2010, the consolidated statements of comprehensive income, changes in
equity and cash flows for the years ended December 31, 2011 and December 31,
2010, and notes, comprising a summary of significant accounting policies and
other explanatory information.

Management's Responsibility for the consolidatedFinancial Statements

Management is responsible for the preparation and fair
presentation of these consolidatedfinancial statements in accordance
with International Financial Reporting Standards as issued by the International
Accounting Standards Board, and for such internal control as management
determines is necessary to enable the preparation of consolidatedfinancial statements that are free from material misstatement, whether due
to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. We conducted our audits
in accordance with Canadian generally accepted auditing standards and the
standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on our judgment, including the
assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, we
consider internal control relevant to the entity's preparation and fair
presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating
the overall presentation of the consolidated financial statements.

| | KPMG LLP is a Canadian limited
liability partnership and a member firm of the KPMG
    network of independent member firms affiliated with KPMG International
Cooperative
    (KPMG International), a Swiss entity.
    KPMG Canada provides services to KPMG LLP. | 
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

---

We believe that the audit evidence we have obtained in our
audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidatedfinancial statements
present fairly, in all material respects, the financial position of Great
Panther Silver Limited as at December 31, 2011, December 31, 2010 and January 1,
2010 and its consolidatedresults of operations and its consolidatedcash flows for the years ended December 31, 2011 and December 31, 2010, in
accordance with International Financial Reporting Standards as issued by the
International Accounting Standards Board.

Other Matter

We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), Great Panther
Limited's internal control over financial reporting as of December 31, 2011,
based on the criteria established in Internal Control  Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO), and our report dated March 9, 2012expressed an unmodified
opinion on the effectiveness of Great Panther Silvers internal control over
financial reporting.

Chartered Accountants

March 9, 2012 Vancouver, Canada

2

---

KPMG LLP
      Telephone
      (604) 691-3000Chartered Accountants
      Fax
      (604) 691-3031PO Box 10426 777 Dunsmuir Street
      Internet
      www.kpmg.caVancouver BC V7Y 1K3Canada


REPORT OF INDEPENDENT REGISTERED PUBLIC
  ACCOUNTING FIRM

To the Shareholders and Board of Directors Great Panther Silver
  Limited

We have audited Great Panther Silver Limiteds ("the Company")
  internal control over financial reporting as of December 31, 2011 based on the
  criteria established in Internal ControlIntegrated Framework issued by the
  Committee of Sponsoring Organizations of the Treadway Commission (COSO). The
  Company's management is responsible for maintaining effective internal control
  over financial reporting and for its assessment of the effectiveness of internal
  control over financial reporting. Our responsibility is to express an opinion
  the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform the audit to obtain reasonable assurance about
  whether effective internal control over financial reporting was maintained in
  all material respects. Our audit included obtaining an understanding of internal
  control over financial reporting, assessing the risk that a material weakness
  exists, and testing and evaluating the design and operating effectiveness of
  internal control based on the assessed risk. Our audit also included performing
  such other procedures as we considered necessary in the circumstances. We
  believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a
  process designed to provide reasonable assurance regarding the reliability of
  financial reporting and the preparation of financial statements for external
  purposes in accordance with generally accepted accounting principles. A
  company's internal control over financial reporting includes those policies and
  procedures that (1) pertain to the maintenance of records that, in reasonable
  detail, accurately and fairly reflect the transactions and dispositions of the
  assets of the company; (2) provide reasonable assurance that transactions are
  recorded as necessary to permit preparation of financial statements in
  accordance with generally accepted accounting principles, and that receipts and
  expenditures of the company are being made only in accordance with
  authorizations of management and directors of the company; and (3) provide
  reasonable assurance regarding prevention or timely detection of unauthorized
  acquisition, use, or disposition of the company's assets that could have a
  material effect on the financial statements.

Because of its inherent limitations, internal control over
  financial reporting may not prevent or detect misstatements. Also, projections
  of any evaluation of effectiveness to future periods are subject to the risk
  that controls may become inadequate because of changes in conditions, or that
  the degree of compliance with the policies or procedures may deteriorate.

KPMG LLP is a Canadian
  limited liability partnership and a member firm of the KPMGnetwork of independent member firms affiliated with KPMG International
    Cooperative(KPMG International), a Swiss
    entity.KPMG Canada provides services to KPMG LLP.

---

In our opinion, the Company maintained, in all material
  respects, effective internal control over financial reporting as of December 31,
  2011, based on the criteria established in Internal ControlIntegrated Framework
  issued by the Committee of Sponsoring Organizations of the Treadway Commission
  (COSO).

We also have audited, in accordance with the standards of the
  Public Company Accounting Oversight Board (United States), the consolidated
  statements of financial position as at December 31, 2011, December 31, 2010
  and January 1, 2010, and the consolidated statements of comprehensive income,
  changes in equity and cash flows for the years ended December 31, 2011 and December
  31, 2010, and our report dated March 9, 2012 expressed an unqualified opinion
  on those consolidated financial statements.

Chartered Accountants

March 9, 2012 
  Vancouver, Canada

2

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|GREAT PANTHER SILVER LIMITED                 
|---------------------------------------------
|CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|(Expressed in thousands of Canadian dollars) 
|                                             
|December 31, 2011
      and 2010             

|                                                       |   | December 31, |   |   | December 31, |   |   | January 1, |  
|------------------------------------------------------ | - | ------------ | - | - | ------------ | - | - | ---------- | -
|                                                       |   | 2011         |   |   | 2010         |   |   | 2010       |  
|                                                       |   |              |   |   | (note 22     | ) |   | (note 22   | )
|Assets                                                 |   |              |   |   |              |   |   |            |  
|                                                       |   |              |   |   |              |   |   |            |  
|Current assets:                                        |   |              |   |   |              |   |   |            |  
|Cash and cash equivalents                              | $ | 39,437       |   | $ | 13,967       |   | $ | 13,312     |  
|Restricted cash (note
      15)                        |   | -            |   |   | 151          |   |   | -          |  
|Marketable securities                                  |   | 80           |   |   | 200          |   |   | 23         |  
|Trade and other
      receivables (note 4)             |   | 14,076       |   |   | 9,635        |   |   | 5,539      |  
|Income taxes recoverable                               |   | 374          |   |   | 239          |   |   | 342        |  
|Inventories (note 5)                                   |   | 4,591        |   |   | 2,615        |   |   | 1,438      |  
|Prepaid expenses, deposits and advances                |   | 1,732        |   |   | 1,240        |   |   | 1,585      |  
|                                                       |   | 60,290       |   |   | 28,047       |   |   | 22,239     |  
|Non-current assets:                                    |   |              |   |   |              |   |   |            |  
|Mineral
      properties, plant and equipment (note 6) |   | 41,946       |   |   | 27,130       |   |   | 19,212     |  
|Intangible assets (note 7)                             |   | 708          |   |   | 274          |   |   | 102        |  
|                                                       |   | 42,654       |   |   | 27,404       |   |   | 19,314     |  
|                                                       | $ | 102,944      |   | $ | 55,451       |   | $ | 41,553     |  
|                                                       |   |              |   |   |              |   |   |            |  
|Liabilities and Shareholders Equity                   |   |              |   |   |              |   |   |            |  
|                                                       |   |              |   |   |              |   |   |            |  
|Current liabilities:                                   |   |              |   |   |              |   |   |            |  
|Trade and other
      payables (note 8)                | $ | 6,350        |   | $ | 4,758        |   | $ | 2,631      |  
|Finance lease obligations                              |   | 130          |   |   | 369          |   |   | 801        |  
|Promissory notes
      (note 9a)                       |   | -            |   |   | 373          |   |   | 122        |  
|Convertible loan notes (note 9b)                       |   | -            |   |   | 3,716        |   |   | -          |  
|Current tax liability (note 18)                        |   | -            |   |   | 19           |   |   | 27         |  
|                                                       |   | 6,480        |   |   | 9,235        |   |   | 3,581      |  
|Non-current liabilities:                               |   |              |   |   |              |   |   |            |  
|Finance lease obligations                              |   | -            |   |   | 128          |   |   | 63         |  
|Promissory notes
      (note 9a)                       |   | -            |   |   | 77           |   |   | 118        |  
|Convertible loan notes (note 9b)                       |   | -            |   |   | -            |   |   | 3,103      |  
|Reclamation and
      remediation provision (note 10)  |   | 2,154        |   |   | 1,955        |   |   | 2,086      |  
|Deferred tax liability (note 18)                       |   | 1,824        |   |   | -            |   |   | 2,162      |  
|                                                       |   | 3,978        |   |   | 2,160        |   |   | 7,532      |  
|Shareholders equity:                                  |   |              |   |   |              |   |   |            |  
|Share capital
      (note 11)                          |   | 121,536      |   |   | 83,470       |   |   | 75,910     |  
|Reserves                                               |   | 6,465        |   |   | 7,607        |   |   | 12,211     |  
|Deficit                                                |   | (35,515      | ) |   | (47,021      | ) |   | (57,681    | )
|                                                       |   | 92,486       |   |   | 44,056       |   |   | 30,440     |  
|                                                       | $ | 102,944      |   | $ | 55,451       |   | $ | 41,553     |  

Nature of operations (note 1). 
  Commitments and
  contingencies (note 20). 
  See accompanying notes to the consolidated
  financial statements.

Approved by the Board of Directors

|Robert A. Archer         |  | Robert W. Garnett        
|-------------------------- |  | ---------------------------
|Robert A. Archer, Director |  | Robert W. Garnett, Director

1

---

|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, 2011 and 2010                     

|                                                                  |   | 2011        |   |   | 2010        |  
|----------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                                  |   |             |   |   | (note 22    | )
|                                                                  |   |             |   |   |             |  
|Revenue                                                           | $ | 57,818      |   | $ | 42,206      |  
|Cost of sales:                                                    |   |             |   |   |             |  
|Production costs                                                  |   | 25,475      |   |   | 21,161      |  
|Amortization and depletion                                        |   | 4,465       |   |   | 4,117       |  
|Share-based payments                                              |   | 962         |   |   | 481         |  
|                                                                  |   | 30,902      |   |   | 25,759      |  
|                                                                  |   |             |   |   |             |  
|Gross profit                                                      |   | 26,916      |   |   | 16,447      |  
|                                                                  |   |             |   |   |             |  
|General and administrative expenses (note 12)                     |   | 9,106       |   |   | 6,369       |  
|                                                                  |   |             |   |   |             |  
|Finance and other income (expense):                               |   |             |   |   |             |  
|Interest income                                                   |   | 435         |   |   | 115         |  
|Finance costs (note 13)                                           |   | (324        | ) |   | (1,154      | )
|Foreign exchange
      loss (note 17)                             |   | (4,572      | ) |   | (299        | )
|Other income (expense)                                            |   | 142         |   |   | (163        | )
|                                                                  |   | (4,319      | ) |   | (1,501      | )
|                                                                  |   |             |   |   |             |  
|Income before income taxes                                        |   | 13,491      |   |   | 8,577       |  
|                                                                  |   |             |   |   |             |  
|Income tax recovery (expense) (note 18):                          |   |             |   |   |             |  
|Current                                                           |   | (108        | ) |   | (113        | )
|Deferred                                                          |   | (1,877      | ) |   | 2,196       |  
|                                                                  |   | (1,985      | ) |   | 2,083       |  
|Net income for the year                                           | $ | 11,506      |   | $ | 10,660      |  
|                                                                  |   |             |   |   |             |  
|Other comprehensive loss                                          |   |             |   |   |             |  
|Foreign currency translation                                      |   | (352        | ) |   | (3,796      | )
|Change in fair value of
      available-for-sale financial assets |   | (103        | ) |   | (10         | )
|                                                                  |   | (455        | ) |   | (3,806      | )
|Total comprehensive income for the year                           | $ | 11,051      |   | $ | 6,854       |  
|                                                                  |   |             |   |   |             |  
|Earnings per share                                                |   |             |   |   |             |  
|Basic                                                             | $ | 0.09        |   | $ | 0.09        |  
|Diluted                                                           | $ | 0.08        |   | $ | 0.09        |  
|                                                                  |   |             |   |   |             |  
|Weighted average number of common shares
      (note 11f)         |   |             |   |   |             |  
|Basic                                                             |   | 131,072,380 |   |   | 114,422,226 |  
|Diluted                                                           |   | 135,401,113 |   |   | 118,932,620 |  
|                                                                  |   |             |   |   |             |  

See accompanying notes to the consolidated financial
  statements.

2

---

|GREAT PANTHER SILVER LIMITED                              
|----------------------------------------------------------
|CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
|(Expressed in thousands of Canadian dollars)              
|                                                          
|For the years
      ended December 31, 2011 and 2010      

|                                                                   |  | Share
      Capital |   |   | Reserves |   |   |          |   |   |                 |  
|------------------------------------------------------------------ |  | ------------------- | - | - | -------- | - | - | -------- | - | - | --------------- | -
|                                                                   |  | Number              |   |   |          |   |   | Share    |   |   |                 |  
|                                                                   |  | of                  |   |   |          |   |   | option   |   |   | Foreign         |  
|                                                                   |  | shares              |   |   |          |   |   | and      |   |   | currency        |  
|                                                                   |  | (000s              | ) |   | Amount   |   |   | warrants |   |   | **translation** |  
|Balance at January 1, 2010                                         |  | 111,240             |   | $ | 75,910   |   | $ | 10,268   |   | $ | -               |  
|Warrants exercised (note 11e)                                      |  | 4,155               |   |   | 4,721    |   |   | (190     | ) |   | -               |  
|Share options exercised 
        
      (note 11d)                 |  | 4,519               |   |   | 2,871    |   |   | (1,477   | ) |   | -               |  
|Share issuance cost                                                |  | -                   |   |   | (32      | ) |   | -        |   |   | -               |  
|Share-based payments                                               |  | -                   |   |   | -        |   |   | 869      |   |   | -               |  
|Comprehensive income                                               |  | -                   |   |   | -        |   |   | -        |   |   | (3,796          | )
|Balance at December 31, 2010                                       |  | 119,914             |   | $ | 83,470   |   | $ | 9,470    |   | $ | (3,796          | )
|                                                                   |  |                     |   |   |          |   |   |          |   |   |                 |  
|Balance at January 1, 2011                                         |  | 119,914             |   | $ | 83,470   |   | $ | 9,470    |   | $ | (3,796          | )
|Warrants exercised (note 11e)                                      |  | 6,856               |   |   | 6,409    |   |   | (239     | ) |   | -               |  
|Share options exercised 
        
      (note 11d)                 |  | 3,089               |   |   | 3,670    |   |   | (1,362   | ) |   | -               |  
|Extinguishment of convertible loan
          notes
      (note 9b) |  | 1,800               |   |   | 5,859    |   |   | -        |   |   | -               |  
|Short form prospectus financing 
        
      (note 11c)         |  | 5,750               |   |   | 22,128   |   |   | 384      |   |   | -               |  
|Share-based payments                                               |  | -                   |   |   | -        |   |   | 2,496    |   |   | -               |  
|Comprehensive income                                               |  | -                   |   |   | -        |   |   | -        |   |   | (352            | )
|Balance at December 31, 2011                                       |  | 137,409             |   | $ | 121,536  |   | $ | 10,749   |   | $ | (4,148          | )

See accompanying notes to the consolidated financial
  statements.

3

---

|GREAT PANTHER SILVER LIMITED                        
|----------------------------------------------------
|CONSOLIDATED STATEMENTS OF CASH FLOWS               
|(Expressed in thousands of Canadian dollars)        
|                                                    
|For the years
      ended December 31, 2011 and 2010

|                                                                         |   | 2011    |   |   | 2010     |  
|------------------------------------------------------------------------ | - | ------- | - | - | -------- | -
|                                                                         |   |         |   |   | (note 22 | )
|Cash flows from operating activities                                     |   |         |   |   |          |  
|Net income for the year                                                  | $ | 11,506  |   | $ | 10,660   |  
|                                                                         |   |         |   |   |          |  
|Items not involving cash:                                                |   |         |   |   |          |  
|Amortization and depletion
      expense                                 |   | 4,561   |   |   | 4,169    |  
|Unrealized
      foreign exchange (gains) losses (note 17)               |   | 3,849   |   |   | 8        |  
|Deferred income taxes                                                    |   | 1,877   |   |   | (2,196   | )
|Accretion on
      reclamation and remediation provision (note 10)       |   | 47      |   |   | 41       |  
|Share-based payments (note 12)                                           |   | 2,210   |   |   | 869      |  
|Interest
      accretion on convertible loan notes (note 13)             |   | 239     |   |   | 939      |  
|Loss (gain) on disposal of
      mineral properties, plant and equipment |   | (112    | ) |   | 138      |  
|Shares received for mineral property
      and capital expenditures      |   | -       |   |   | (23      | )
|                                                                         |   | 24,177  |   |   | 14,605   |  
|                                                                         |   |         |   |   |          |  
|Changes in non-cash working capital:                                     |   |         |   |   |          |  
|Trade and other
      receivables                                        |   | (4,441  | ) |   | (4,263   | )
|Income taxes recoverable                                                 |   | (135    | ) |   | 103      |  
|Inventories                                                              |   | (1,821  | ) |   | (905     | )
|Prepaid expenses, deposits and
      advances                            |   | (599    | ) |   | 339      |  
|Trade and other
      payables                                           |   | 1,937   |   |   | 1,382    |  
|Current tax liability                                                    |   | (19     | ) |   | (8       | )
|Net cash from operating activities                                       |   | 19,099  |   |   | 11,253   |  
|                                                                         |   |         |   |   |          |  
|Cash flows from investing activities:                                    |   |         |   |   |          |  
|Intangible assets                                                        |   | (627    | ) |   | (224     | )
|Mineral
      properties, plant and equipment                            |   | (23,459 | ) |   | (14,899  | )
|Proceeds from disposal of
      capital assets                           |   | 149     |   |   | 37       |  
|Restricted cash                                                          |   | 151     |   |   | (151     | )
|Net cash used in investing activities                                    |   | (23,786 | ) |   | (15,237  | )
|                                                                         |   |         |   |   |          |  
|Cash flows from financing activities:                                    |   |         |   |   |          |  
|Repayment of
      capital lease obligations                             |   | (367    | ) |   | (938     | )
|Repayment of promissory notes
      (note 9a)                            |   | (450    | ) |   | (292     | )
|Repayment of
      convertible loan notes (note 9b)                      |   | (62     | ) |   | -        |  
|Proceeds from exercise of
      options (note 11d)                       |   | 2,309   |   |   | 2,871    |  
|Proceeds from
      exercise of warrants (note 11e)                      |   | 6,170   |   |   | 3,054    |  
|Issuance of shares for cash, net of issue costs                          |   | 22,512  |   |   | (32      | )
|Net cash from financing activities                                       |   | 30,112  |   |   | 4,663    |  
|                                                                         |   |         |   |   |          |  
|Effect of foreign currency translation on cash                           |   | 45      |   |   | (24      | )
|                                                                         |   |         |   |   |          |  
|Increase in cash and cash equivalents                                    | $ | 25,470  |   | $ | 655      |  
|Cash and cash
      equivalents, beginning of year                       |   | 13,967  |   |   | 13,312   |  
|Cash and cash equivalents, end of year                                   | $ | 39,437  |   | $ | 13,967   |  
|                                                                         |   |         |   |   |          |  
|Supplemental cash flow information                                       |   |         |   |   |          |  
|                                                                         |   |         |   |   |          |  
|                                                                         |   | 2011    |   |   | 2010     |  
|Interest received                                                        | $ | 378     |   | $ | 116      |  
|Interest paid                                                            | $ | 171     |   | $ | 436      |  
|Income taxes paid                                                        | $ | 267     |   | $ | 112      |  

See accompanying notes to the consolidated financial
  statements.

4

---

|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, 2011 and 2010                 

|1. | Nature of operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Great Panther Silver Limited (the Company) was
      continued under the Business Corporations Act (Yukon) on March 22, 1996
      and continued under the Business Corporations Act (British Columbia) on
      July 9, 2004. On October 2, 2003, the Company changed its name from Great
      Panther Inc. to Great Panther Resources Limited and the common shares were
      consolidated whereby ten common shares were exchanged for one new common
      share. On December 17, 2009, the Companys shareholders approved changing
      the Company's name from Great Panther Resources Limited to Great Panther
      Silver Limited which became effective as of January 1, 2010. No change to
      the Company's capital structure was involved and the common shares of the
      Company trade on the Toronto Stock Exchange under the symbol GPR. On
      February 8, 2011, the Companys shares were listed on NYSE Amex stock
      exchange in the United States under the trading symbol GPL. The address
      of the Companys registered office is Suite 2100, 1177 West Hastings
      Street, Vancouver, British Columbia, Canada, V6E 2K3.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company is in the business of acquisition,
      development, exploration, and operation of mineral properties and mines in
      Mexico. Among the properties in which the Company has interests, the Topia
      and Guanajuato mines are in production. In addition, the Company has a
      development stage property, San Ignacio, for which the Company has
      published a NI43-101 compliant resource estimate. The Companys other
      mineral property interests, Santa Rosa, is in the exploration stage and it
      has not yet been determined as to whether this property contains ore
      reserves that are economically viable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Based on the Companys current cash flow and future
      projections, these financial statements have been prepared by management
      on a going concern basis, which assumes the realization of assets and
      liquidation of liabilities in the normal course of business. The business
      of mining and exploring for minerals involves a high degree of risk and
      there can be no assurance that the current exploration and development
      programs will result in the discovery and development of economic ore
      reserves.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2. | Basis of presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

| | (a) | Statement of compliance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | The consolidated financial statements have been prepared
      in accordance with International Accounting Standards 1, Presentation
        of financial statements(IAS 1) using accounting policies consistent
      with International Financial Reporting Standards (IFRS) as issued by the
      International Accounting Standards Board (IASB) and interpretations of
      the International Financial Reporting Interpretations Committee (IFRIC).
      These are the Companys first consolidated financial statements prepared
      in accordance with IFRS and IFRS 1, First-time Adoption of
        International Financial Reporting Standards("IFRS 1"), has been
      applied. Previously, the Company prepared its consolidated annual
      financial statements in accordance with Canadian generally accepted
      accounting principles (GAAP).
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | Reconciliations between the Companys previously reported
      statement of financial position, statement of comprehensive income (loss),
      and statement of cash flow under GAAP and those reported under IFRS are
      presented in note 22.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | These consolidated financial statements were approved by
      the Board of directors on March 8, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

| | (b) | Basis of consolidation                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | These consolidated financial statements include the
      accounts of the Company and its wholly-owned subsidiaries, Minera Mexicana
      el Rosario, S.A. de C.V., Metalicos de Durango, S.A. de C.V., Minera de
      Villa Seca, S.A. de C.V., Great Panther Silver Peru S.A.C., and New Age
      Investments Inc. All inter-company balances and transactions are
      eliminated on consolidation.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                           
| | (c) | Basis of measurement                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | These consolidated financial statements have been
      prepared on the historical cost basis except for the following material
      items in the statement of financial position:                                                                                                                                                                                                                       

| |  | derivative financial instruments
      are measured at fair value                          
| | - | -------------------------------------------------------------------------------------------
| |   |                                                                                            
| |  | financial instruments at fair
      value through profit or loss are measured at fair value
| |   |                                                                                            
| |  | available-for-sale financial
      assets are measured at fair value                       

| | (d) | Functional and presentation currency                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     | These consolidated financial statements are presented in
      Canadian dollars which is the Companys presentation currency and
      functional currency. The functional currency of the Companys Mexican
      subsidiaries is the Mexican Peso and these subsidiaries have been
      translated to the Canadian dollar in accordance with IAS 21, The
        Effects of Changes in Foreign Exchange Rates("IAS 21"). These
      guidelines require that assets and liabilities be translated using the
      exchange rate at period end, and income, expenses and cash flow items are
      translated using the exchange rate at the dates of the transactions. All
      resulting exchange differences are reported as a separate component of
      shareholders equity as foreign currency translation reserve.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     | Prior to January 1, 2010, the functional currency of the
      Companys Mexican subsidiaries was the Canadian dollar. Therefore, no
      amounts were recorded in the foreign currency translation reserve prior to
      January 1, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

5

---

|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, 2011 and 2010           

|2. | Basis of presentation- continued                                                                                                                                                                                                                                                                                               
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                
|   | (e)                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                
|   | (f)                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                
|3. | Significant accounting policies                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                
|   | The accounting policies set out below have been applied
      consistently by the Company's entities and to all periods presented in
      these consolidated financial statements and in preparing the opening IFRS
      statement of financial position at January 1, 2010 for the purposes of the
      transition to IFRS:
|   |                                                                                                                                                                                                                                                                                                                                
|   | (a)                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                
|   | (b)                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                

| |  | Ore stockpiles and concentrate inventories which are
      valued at the lower of weighted average cost and net realizable value.
      Costs include production costs, amortization and depletion, and
      share-based payments directly attributable to the inventory production
      process.                                                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | 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 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.                                                                                                                                                                                                                                                                                                                                                                                                                         

| | (c) | Exploration and evaluation expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | The fair value at acquisition date of property or
      exploration rights acquired either through a business combination or asset
      acquisition is capitalized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Exploration expenditures incurred on grassroots projects
      and on new mineral properties are expensed as incurred as mineral property
      exploration expenditures in the statement of comprehensive income.
      Examples of exploration expenditures that are expensed under this policy
      include: topographical, geological, geochemical and geophysical studies;
      exploratory drilling; trenching; and sampling. Such expenditures will
      continue to be expensed until a mineral resource is identified of such
      quantity and grade or quality that it has reasonable prospects for
      economic extraction.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Activities in relation to evaluating the technical
      feasibility and commercial viability of extracting a mineral resource are
      capitalized and included in mineral properties on the statement of
      financial position. Such expenditures will continue to be capitalized
      until the technical feasibility and commercial viability of the extraction
      of mineral resources in an area of interest are demonstrable and
      management has made a decision to proceed with development of the
      property.                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Capitalized acquisition and evaluation expenditures are
      classified as intangible assets within mineral properties, plant and
      equipment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

6

---

|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, 2011 and 2010           

|3. | Significant accounting policies-
      continued
|-- | ------------------------------------------------
|   |                                                 
|   | (d)                                             
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 

Effect of December 31, 2010 change in mine life2011
      
      
      2012
      
      
      2013
      
      
      2014
      
      
      2015
      
      
      Later(Decrease) increase in amortization and depletion
      $

      (1,838
      )
      $
      (1,838
      )
      $
      (1,838
      )
      $
      2,422
      
      $
      2,422
      
      $
      670


Effect of December 31, 2011 change in mine life2012
      
      
      2013
      
      
      2014
      
      
      2015
      
      
      2016
      
      
      Later(Decrease) increase in amortization and depletion
      $
      (1,433
      )
      $
      (1,433
      )
      $
      (1,433
      )
      $
      (1,433
      )
      $
      4,968
      
      $
      764


Maintenance and repairs are charged to
  operations as incurred. When assets are retired or sold, the costs and related
  accumulated depreciation are eliminated from the accounts and any resulting gain
  or loss is reflected in income.

Equipment held at the Companys head
  office are recorded at cost less accumulated depreciation, calculated using the
  following basis:

| | 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                     

| | (e) | Leased assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | Leases in which the Company assumes substantially all
      risks and rewards of ownership are classified as finance leases. Finance
      leases are recognized at the lower of the fair value and the present value
      of the minimum lease payments at inception of the lease. Subsequent to
      initial recognition, the asset is accounted for in accordance with the
      accounting policy applicable to that asset. Other leases are operating
      leases and are not recognized in the Companys statement of financial
      position.  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (f) | Intangible assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | Intangible assets that are acquired by the Company, which
      includes computer software and costs of computer software customization
      and implementation, are stated at cost less accumulated amortization and
      impairment losses. Amortization is recorded in general and administrative
      in the statement of comprehensive income on a straight line basis over the
      estimated useful lives of the intangible assets. The estimated useful life
      for the computer software is 3 years.                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (g) | Impairment of non-financial assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | The Companys mineral properties, plant and equipment are
      reviewed for an indication of impairment at each financial reporting date
      or at any time if an indicator of impairment is considered to exist. If
      any such indication exists an estimate of the recoverable amount is
      undertaken, being the higher of an assets fair value less costs to sell
      and value in use. If the assets carrying amount exceeds its recoverable
      amount then an impairment loss is recognized in profit or loss for the
      period.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | Fair value is determined as the amount that would be
      obtained from the sale of the asset in an arms length transaction between
      knowledgeable and willing parties. Fair value of mineral assets is
      generally determined as the present value of the estimated future cash
      flows expected to arise from the continued use of the asset, including any
      expansion prospects.                                                                                                                                                   

7

---

|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, 2011 and 2010           

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

| |     | Value in use is determined as the present value of the
      estimated future cash flows expected to arise from the continued use of
      the asset in its present form and from its ultimate disposal.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | Impairment is normally assessed at the level of
      cash-generating units, which are identified as the smallest identifiable
      group of assets that generates cash inflows that are largely independent
      of the cash inflows from other assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | Non-financial assets other than goodwill that have
      suffered an impairment are evaluated for possible reversal of the
      impairment whenever events or changes in circumstances indicate that the
      impairment may have reversed. When a reversal of a previous impairment is
      recorded, the reversal amount is adjusted for depreciation that would have
      been recorded had the impairment not been recorded.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (h) | Share-based payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | Equity-settled share-based payment arrangements such as
      the Companys stock option plan are measured at fair value at the date of
      grant and recorded within equity. The fair value at grant date of all
      share-based payments is recognized as compensation expense over the
      vesting period, with a corresponding credit to shareholders equity. The
      Company estimates the fair value of share options granted using the
      Black-Scholes option pricing model. Where awards are forfeited because
      non-market based vesting conditions are not satisfied, the expense
      previously recognized is reversed in the period the forfeiture
      occurs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (i) | Revenue recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | The Company recognizes revenue from the sale of
      concentrates upon delivery when it is probable that the economic benefits
      associated with the transaction will flow to the Company, the risks and
      rewards of ownership are transferred to the customer and the revenue can
      be reliably measured. This is generally the shipment date. Revenue is
      based on market metal prices and mineral content. Revenue is recorded in
      the consolidated statements of comprehensive income net of treatment and
      refining costs paid to counter parties under terms of the off-take
      arrangements. Revenue from the sale of the concentrates is subject to
      adjustment upon final settlement based upon metal prices, weights and
      assays. For each reporting period until final settlement, estimates of
      metal prices are used to record sales. Variations between the sales price
      recorded at the shipment date and the actual final sales price at the
      settlement date caused by changes in the market metal prices results in an
      embedded derivative in the related trade accounts receivable balance. The
      embedded derivative is recorded at fair value each period until final
      settlement occurs with changes in fair value classified as a component of
      revenue.      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (j) | Reserve estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | The Company estimates its ore reserves and mineral
      resources based on information compiled by Qualified Persons as defined in
      accordance with Canadian Securities Administrators National Instrument
      43-101 Standards of Disclosure for Mineral Projects. Reserves and mineral
      resources are used in assessing life of mine for the calculation of
      depreciation and amortization, impairment assessment, assessment of life
      of mine stripping ratios, determination of exploration and evaluation
      assets, and for forecasting the timing of payment of rehabilitation costs.
      There are numerous uncertainties inherent in estimating ore reserves, and
      assumptions that are valid at the time of estimation may change
      significantly when new information becomes available. Changes in the
      forecast prices of commodities, exchange rates, production costs or
      recovery rates may change the economic status of reserves and may,
      ultimately, result in the reserves and resources being adjusted.                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (k) | Reclamation and remediation provisions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | The Company's mining and exploration activities are
      subject to various laws and regulations governing the protection of the
      environment. The Company recognizes the cost of future reclamation and
      remediation as a liability in the period in which it incurs a legal or
      constructive obligation associated with the retirement of tangible mineral
      property, plant and equipment assets that results from the acquisition,
      construction, development, or normal use of the asset, if a reasonable
      estimate of the obligation can be made. The liability is measured
      initially by discounting such costs to the net present value using pre-tax
      rates and risk assumptions specific to the liability and the resulting
      cost capitalized to the carrying value of the related assets. In
      subsequent periods, the liability is adjusted for accretion of the
      discount with the offsetting amount charged to profit or loss as a finance
      cost, and any change in the amount or timing of the underlying cash flows
      with the offsetting amount recorded as an adjustment to the reclamation
      and remediation provision cost included in mineral properties. The
      reclamation and remediation provision cost is depreciated over the
      remaining life of the assets.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | It is reasonably possible that the ultimate cost of
      remediation and reclamation could change in the future due to
      uncertainties associated with defining the nature and extent of
      environmental contamination, the application of laws and regulations by
      regulatory authorities, changes in remediation technology and changes in
      discount rates. The Company reviews its reclamation and remediation
      provision at least annually and as evidence becomes available indicating
      that its remediation and reclamation liabilities may have changed. Any
      such changes in costs could materially impact the future amounts charged
      to operations for reclamation and remediation obligations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | Changes in the reclamation and remediation provision
      subsequent to the related asset reaching the end of its useful life and
      any excess of actual reclamation and remediation costs over the amount of
      initially estimated reclamation and remediation provision are recognized
      in the statement of comprehensive income when
      determined.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

8

---

|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, 2011 and 2010           

|3. | Significant accounting policies-
      continued
|-- | ------------------------------------------------
|   |                                                 
|   | (l)                                             
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 
|   |                                                 

9

---

|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, 2011 and 2010           

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

Impairment of financial
  instruments

The Company assesses at each financial
  reporting date whether there is objective evidence that a financial asset or a
  group of financial assets is impaired using the following criteria:

| |  | 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 profit or loss. Any amounts related to that
      asset are removed from losses accumulated in the fair value reserve
      recognized in shareholders equity and are included in profit or loss.
      Reversals in respect of available-for-sale financial assets are not
      reversed through profit or loss. 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.

| | (m) | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Income tax is recognized in profit or loss except to the
      extent that it relates to items recognized directly in equity, in which
      case it is recognized directly in equity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Deferred tax assets and liabilities are determined based
      on differences between the financial statement carrying values of existing
      assets and liabilities and their respective income tax bases (temporary
      differences), and tax loss carry forwards. Deferred tax assets and
      liabilities are measured using enacted or substantively enacted tax rates
      expected to be in effect when the temporary differences are likely to be
      recovered or settled. The effect on deferred tax assets and liabilities of
      a change in tax rates is included in operations in the period in which the
      change is substantively enacted. The amount of deferred tax assets
      recognized is limited to the amount that is, in managements estimation,
      probable that future taxable profits will be available against which the
      asset can be utilized.                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Deferred tax assets and liabilities are offset when there
      is a legally enforceable right to set off current tax assets against
      current tax liabilities and when they relate to income taxes levied by the
      same taxation authority and the Company intends to settle its current tax
      assets and liabilities on a net basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (n) | Earnings per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Earnings per share is calculated based on the weighted
      average number of shares outstanding during the period. The Company
      follows the treasury stock method for the calculation of diluted earnings
      per share. Under this method, dilution is calculated based upon the net
      number of common shares issued should in-the-money options and warrants
      be exercised and the proceeds be used to repurchase common shares at the
      average market price in the year. Dilution from convertible securities is
      calculated based on the number of shares to be issued after taking into
      account the reduction of the related after-tax interest expense.                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Basic earnings per share is computed by dividing net
      income by the weighted average number of common shares outstanding during
      the reporting period. Diluted earnings per share is computed similar to
      basic earnings per share except that the weighted average shares
      outstanding are increased to include additional shares from the assumed
      exercise of share options and warrants, if dilutive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (o) | Segment reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | The Company has identified its operating segments based
      on the internal reports that are reviewed and used by the chief executive
      office and the executive management team (the chief operating decision
      maker or CODM) in assessing performance and in determining allocation of
      resources. The CODM considers the business from both a geographic and
      product perspective and assesses the performance of the operating segments
      based on measures such as net property, plant and equipment as well as
      operating results. All operating segments operating results are reviewed
      regularly by the Companys senior management to make decisions about
      resources to be allocated to the segment and to assess its performance,
      and for which discrete financial information is available. The Company has
      determined the operating segments based on this information.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Segment results that are reported to senior management
      include items directly attributable to a segment as well as those that can
      be allocated on a reasonable basis. Unallocated items comprise mainly of
      corporate office expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

10

---

|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, 2011 and 2010           

|4. | Trade and other
      receivables
|-- | ---------------------------------

| |                                |   | December 31, |   |   | December 31, |   |   | January 1, |  
| | ------------------------------ | - | ------------ | - | - | ------------ | - | - | ---------- | -
| |                                |   | 2011         |   |   | 2010         |   |   | 2010       |  
| | Trade accounts receivable      | $ | 11,180       |   | $ | 5,151        |   | $ | 3,472      |  
| | Value added tax receivable     |   | 2,902        |   |   | 4,399        |   |   | 2,024      |  
| | Other                          |   | 214          |   |   | 317          |   |   | 251        |  
| |                                |   | 14,296       |   |   | 9,867        |   |   | 5,747      |  
| | Allowance for doubtful amounts |   | (220         | ) |   | (232         | ) |   | (208       | )
| |                                | $ | 14,076       |   | $ | 9,635        |   | $ | 5,539      |  

|   | The Company, through its Mexican subsidiaries, pays value
      added tax on the purchase and sale of goods and services at a rate of 16%.
      The net amount paid or payable is recoverable, but such recovery is
      subject to review and assessment by local tax authorities.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                      
|5. | Inventories                                                                                                                                                                                                                                                                          

| |                        |   | December 31, |  |   | December 31, |  |   | January 1, | 
| | ---------------------- | - | ------------ |  | - | ------------ |  | - | ---------- | 
| |                        |   | 2011         |  |   | 2010         |  |   | 2010       | 
| | Concentrate            | $ | 2,748        |  | $ | 831          |  | $ | 410        | 
| | Ore stockpile          |   | 115          |  |   | 370          |  |   | 80         | 
| | Materials and supplies |   | 1,503        |  |   | 993          |  |   | 681        | 
| | Silver bullion         |   | 225          |  |   | 421          |  |   | 267        | 
| |                        | $ | 4,591        |  | $ | 2,615        |  | $ | 1,438      | 

The amount of inventory recognized as
  an expense for the years ended December 31, 2011 and December 31, 2010 includes
  production costs, amortization and depletion and share-based payments directly
  attributable to the inventory production process.

The amount of write-down of inventories
  to net realizable value for the year ended December 31, 2011 was $45 (2010 -
  $nil) relating to silver bullion and $20 (2010 - $nil) relating to materials and
  supplies, which were recognized as expenses in the period the write-downs or
  losses occurred.

11

---

|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, 2011 and 2010           

|6. | Mineral properties, plant and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | At December 31, 2011, the Company has mineral properties,
      plant and equipment assets of $41.9 million compared to $27.1 million at
      December 31, 2010. The company invested primarily in mine development,
      evaluation of mineral resources and purchase of capital assets at its
      Guanajuato and Topia mines. Given the geographic proximity of the San
      Ignacio and Santa Rosa properties to Guanajuato, management included
      acquisition and evaluation of the properties together with Guanajuato. At
      December 31, 2011, the Company had mineral property expenditures totalling
      $2,761 (2010 - $277) for San Ignacio and $1,459 (2010 - $nil) for Santa
      Rosa with $nil accumulated depreciation for each.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The major components of the Company's mineral properties,
      plant and equipment for Guanajuato and Topia mines and head office are as
      follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

Guanajuato mineMine
      
      
      LeaseholdBuildings
      
      
      
      
      
      reclamation
      
      
      improvementsMineral
      
      
      Plant and
      
      
      and mobile
      
      
      
      
      
      and
      
      
      and otherproperties
      
      
      equipment
      
      
      equipment
      
      
      Land
      
      
      remediation
      
      
      equipment
      
      
      TotalCostJanuary 1, 2010
      $
      4,418
      
      $
      7,954
      
      $
      1,771
      
      $
      2,845
      
      $
      569
      
      $
      -
      
      $
      17,557Additions
      
      5,784
      
      
      4,509
      
      
      506
      
      
      -
      
      
      -
      
      
      -
      
      
      10,799Change in rehabilitation
        provision
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (196
      )
      
      -
      
      
      (196
      )Disposals
      
      (69
      )
      
      (173
      )
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (242
      )Foreign exchange
      
      (1,034
      )
      
      (1,503
      )
      
      (427
      )
      
      (645
      )
      
      (66
      )
      
      -
      
      
      (3,675
      )December 31, 2010
      
      9,099
      
      
      10,787
      
      
      1,850
      
      
      2,200
      
      
      307
      
      
      -
      
      
      24,243Additions
      
      11,086
      
      
      7,495
      
      
      330
      
      
      -
      
      
      -
      
      
      -
      
      
      18,911Change in rehabilitation provision
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      148
      
      
      -
      
      
      148Disposals
      
      -
      
      
      (161
      )
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (161
      )Foreign exchange
      
      (1,678
      )
      
      (1,438
      )
      
      (208
      )
      
      (210
      )
      
      (28
      )
      
      -
      
      
      (3,562
      )December 31, 2011
      $
      18,507
      
      $
      16,683
      
      $
      1,972
      
      $
      1,990
      
      $
      427
      
      $
      -
      
      $
      39,579Accumulated
        depreciationJanuary 1, 2010
      $
      2,625
      
      $
      3,903
      
      $
      1,051
      
      $
      -
      
      $
      320
      
      $
      -
      
      $
      7,899Depreciation
      
      1,198
      
      
      1,715
      
      
      259
      
      
      -
      
      
      31
      
      
      -
      
      
      3,203Disposals
      
      -
      
      
      (135
      )
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (135
      )Foreign exchange
      
      (568
      )
      
      (825
      )
      
      (237
      )
      
      -
      
      
      (72
      )
      
      -
      
      
      (1,702
      )December 31, 2010
      
      3,255
      
      
      4,658
      
      
      1,073
      
      
      -
      
      
      279
      
      
      -
      
      
      9,265Depreciation
      
      1,671
      
      
      1,627
      
      
      183
      
      
      -
      
      
      31
      
      
      -
      
      
      3,512Disposals
      
      -
      
      
      (126
      )
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (126
      )Foreign exchange
      
      (365
      )
      
      (536
      )
      
      (118
      )
      
      -
      
      
      (65
      )
      
      -
      
      
      (1,084
      )December 31, 2011
      $
      4,561
      
      $
      5,623
      
      $
      1,138
      
      $
      -
      
      $
      245
      
      $
      -
      
      $
      11,567Net book valueJanuary 1, 2010
      $
      1,793
      
      $
      4,051
      
      $
      720
      
      $
      2,845
      
      $
      249
      
      $
      -
      
      $
      9,658December 31, 2010
      $
      5,844
      
      $
      6,129
      
      $
      777
      
      $
      2,200
      
      $
      28
      
      $
      -
      
      $
      14,978December 31, 2011
      $
      13,946
      
      $
      11,060
      
      $
      834
      
      $
      1,990
      
      $
      182
      
      $
      -
      
      $
      28,012


12

---

|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, 2011 and 2010           

|6. | Mineral properties, plant and equipment-
      continued
|-- | --------------------------------------------------------

Topia mineMine
      
      
      LeaseholdBuildings
      
      
      
      
      
      reclamation
      
      
      improvementsMineral
      
      
      Plant and
      
      
      and mobile
      
      
      
      
      
      and
      
      
      and otherproperties
      
      
      equipment
      
      
      equipment
      
      
      Land
      
      
      remediation
      
      
      equipment
      
      
      TotalCostJanuary 1, 2010
      $
      9,163
      
      $
      5,989
      
      $
      402
      
      $
      34
      
      $
      232
      
      $
      -
      
      $
      15,820Additions
      
      2,392
      
      
      2,798
      
      
      10
      
      
      3
      
      
      -
      
      
      -
      
      
      5,203Change in rehabilitation provision
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      266
      
      
      -
      
      
      266Foreign exchange
      
      (1,598
      )
      
      (1,155
      )
      
      (96
      )
      
      (23
      )
      
      (30
      )
      
      -
      
      
      (2,902
      )December 31, 2010
      
      9,957
      
      
      7,632
      
      
      316
      
      
      14
      
      
      468
      
      
      -
      
      
      18,387Additions
      
      1,619
      
      
      1,902
      
      
      907
      
      
      -
      
      
      
      
      
      -
      
      
      4,428Change in rehabilitation provision
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      242
      
      
      -
      
      
      242Foreign exchange
      
      (1,152
      )
      
      (915
      )
      
      (57
      )
      
      (2
      )
      
      (48
      )
      
      -
      
      
      (2,174
      )December 31, 2011
      $
      10,424
      
      $
      8,619
      
      $
      1,166
      
      $
      12
      
      $
      662
      
      $
      -
      
      $
      20,883Accumulated depreciationJanuary 1, 2010
      $
      2,923
      
      $
      3,030
      
      $
      217
      
      $
      -
      
      $
      187
      
      $
      -
      
      $
      6,357Depreciation
      
      727
      
      
      465
      
      
      17
      
      
      -
      
      
      3
      
      
      -
      
      
      1,212Foreign exchange
      
      (510
      )
      
      (652
      )
      
      (49
      )
      
      -
      
      
      (42
      )
      
      -
      
      
      (1,253
      )As at December 31, 2010
      
      3,140
      
      
      2,843
      
      
      185
      
      
      -
      
      
      148
      
      
      -
      
      
      6,316Depreciation
      
      674
      
      
      578
      
      
      18
      
      
      -

      
      
      34
      
      
      -
      
      
      1,304Foreign exchange
      
      (237
      )
      
      (305
      )
      
      (19
      )
      
      -
      
      
      (17
      )
      
      -
      
      
      (578
      )December 31, 2011
      $
      3,577
      
      $
      3,116
      
      $
      184
      
      $
      -
      
      $
      165
      
      $
      -
      
      $
      7,042Net book valueJanuary 1, 2010
      $
      6,240
      
      $
      2,959
      
      $
      185
      
      $
      34
      
      $
      45
      
      $
      -
      
      $
      9,463December 31, 2010
      $
      6,817
      
      $
      4,789
      
      $
      131
      
      $
      14
      
      $
      320
      
      $
      -
      
      $
      12,071December 31, 2011
      $
      6,847
      
      $
      5,503
      
      $
      982
      
      $
      12
      
      $
      497
      
      $
      -
      
      $
      13,841


13

---

|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, 2011 and 2010           

|6. | Mineral properties, plant and equipment-
      continued
|-- | --------------------------------------------------------

Head officeMine
      
      
      LeaseholdBuildings
      
      
      
      
      
      reclamation
      
      
      improvementsMineral
      
      
      Plant and
      
      
      and mobile
      
      
      
      
      
      and
      
      
      and otherproperties
      
      
      equipment
      
      
      equipment
      
      
      Land
      
      
      remediation
      
      
      equipment
      
      
      TotalCostJanuary 1, 2010
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      341
      
      $
      341Additions
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      19
      
      
      19Disposals
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (2
      )
      
      (2
      )December 31, 2010
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      358
      
      
      358Additions
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      61
      
      
      61Disposals
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (7
      )
      
      (7
      )December 31, 2011
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      412
      
      $
      412Accumulated
        depreciationJanuary 1, 2010
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      250
      
      $
      250Depreciation
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      29
      
      
      29Disposals
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (2
      )
      
      (2
      )December 31, 2010
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      277
      
      
      277Depreciation
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      47
      
      
      47Disposals
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (5
      )
      
      (5
      )December 31, 2011
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      319
      
      $
      319Net book valueJanuary 1, 2010
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      91
      
      $
      91December 31, 2010
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      81
      
      $
      81December 31, 2011
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      93
      
      $
      93


ConsolidatedMine
      
      
      LeaseholdBuildings
      
      
      
      
      
      reclamation
      
      
      improvementsMineral
      
      
      Plant and
      
      
      and mobile
      
      
      
      
      
      and
      
      
      and otherproperties
      
      
      equipment
      
      
      equipment
      
      
      Land
      
      
      remediation
      
      
      equipment
      
      
      TotalNet book valueJanuary 1, 2010
      $
      8,033
      
      $
      7,010
      
      $
      905
      
      $
      2,879
      
      $
      294
      
      $
      91
      
      $
      19,212December 31, 2010
      $
      12,661
      
      $
      10,918
      
      $
      908
      
      $
      2,214
      
      $
      348
      
      $
      81
      
      $
      27,130December 31, 2011
      $
      20,793
      
      $
      16,563
      
      $
      1,816
      
      $
      2,002
      
      $
      679
      
      $
      93
      
      $
      41,946


Guanajuato mine

On October 25, 2005, the Company
  purchased a 100% ownership interest in a group of producing silver-gold mines in
  Guanajuato, Mexico which includes two main properties, a plant, workshops and
  administration facilities, mining infrastructure, equipment, and certain surface
  rights (real estate).

During 2011, the Company acquired
  rights to a new silver-gold project, the Santa Rosa Project, in Guanajuato,
  Mexico, for $1,459, and is included in Guanajuatos mineral properties. The
  Company added $2,484 (2010 - $277) to Guanajuatos mineral properties relating
  to San Ignacio in 2011, resulting in total costs of $2,761.

Topia mine

On June 30, 2005, the Company purchased
  100% of the ownership rights in and to all the fixed assets, machinery,
  equipment and Topia mining concessions located in the municipality of Topia in
  the state of Durango, Mexico.

14

---

|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, 2011 and 2010           

|7. | Intangible assets
|-- | -----------------

| |                             |   | 2011 |   |   | 2010 |  
| | --------------------------- | - | ---- | - | - | ---- | -
| | Cost                        |   |      |   |   |      |  
| | Balance, January 1          | $ | 383  |   | $ | 176  |  
| | Additions                   |   | 627  |   |   | 224  |  
| | Foreign exchange            |   | (69  | ) |   | (17  | )
| | Balance, December
      31  | $ | 941  |   | $ | 383  |  
| |                             |   |      |   |   |      |  
| | Accumulated depreciation    |   |      |   |   |      |  
| | Balance, January 1          | $ | 109  |   | $ | 74   |  
| | Depreciation                |   | 135  |   |   | 44   |  
| | Foreign exchange            |   | (11  | ) |   | (9   | )
| | Balance, December
      31  |   | 233  |   |   | 109  |  
| | Net book value, December 31 | $ | 708  |   | $ | 274  |  

|8. | Trade and other payables                                                                                                                                                                                                                                
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                         
|   | Trade and other payables of the Company are principally
      comprised of amounts outstanding for trade purchases relating to mining
      and exploration activities. The usual credit period taken for trade
      purchases is between 0 to 30 days.
|   |                                                                                                                                                                                                                                                         
|   | The following is an aged analysis of the trade and other
      payables:                                                                                                                                                                                

| |                   |   | December 31, |  |   | December 31, |  |   | January 1, | 
| | ----------------- | - | ------------ |  | - | ------------ |  | - | ---------- | 
| |                   |   | 2011         |  |   | 2010         |  |   | 2010       | 
| | Less than 1 month | $ | 4,663        |  | $ | 3,459        |  | $ | 1,523      | 
| | 1 to 3 months     |   | 323          |  |   | -            |  |   | -          | 
| | 3 to 6 months     |   | 1,312        |  |   | -            |  |   | -          | 
| | Over 6 months     |   | 52           |  |   | 1,299        |  |   | 1,108      | 
| |                   | $ | 6,350        |  | $ | 4,758        |  | $ | 2,631      | 

|   | Included in trade and other payables are amounts due to
      related parties which are disclosed in note 19.
|-- | -------------------------------------------------------------------------------------------------------------
|   |                                                                                                              
|9. | Long-term debt                                                                                               

| | (a) | Promissory notes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | During the year ended December 31, 2010, the Company
      purchased equipment financed by two promissory notes requiring equal
      blended monthly payments of $11 for 24 months, commencing on the first day
      of the month after delivery of the equipment. The promissory notes bore
      interest at 6% per annum, compounded and calculated semi-annually and were
      secured by the equipment. On April 29, 2011, the Company extinguished its
      promissory notes relating to equipment purchase and the remaining accrued
      interest was paid in cash. The total interest paid on the promissory notes
      for the year ended December 31, 2011 was $8 (2010 -
      $29).

| | (b) | Convertible loan notes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | On July 13, 2007, the Company completed financing
      agreements for cash proceeds of $4,050. The financing consisted of two 8%
      per annum unsecured convertible notes maturing July 14, 2011, convertible
      into common shares of the Company at a price of $2.25 per share at the
      holders option at any time. On issuance, the fair value of the liability
      component of the convertible note was $2,084. The liability component was
      valued using a company specific interest rate assuming no conversion
      feature existed.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | The debt component was accreted to its fair value over
      the term to maturity as a non-cash interest charge and the equity
      component is presented in convertible loan notes reserves as a separate
      component of shareholders equity.                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | On March 8, 2011, the note holders exercised their option
      to convert the two convertible notes into equity. In accordance with the
      financing agreement, the Company issued 1,800,000 fully paid common shares
      at the conversion price of $2.25 per common share.                                                                                                                                                                                                                                                                              

15

---

|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, 2011 and 2010           

|10. | Reclamation and remediation provision                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Companys reclamation and remediation provision
      relates to site restoration, clean-up and ongoing treatment and monitoring
      of the Topia and Guanajuato mines. Although the ultimate amount of the
      rehabilitation provision is uncertain, the fair value of these obligations
      is based on information currently available which is reviewed at each
      reporting date to take into account any material changes to the
      information. The timing of rehabilitation is likely to depend on when the
      mines cease to produce at economically viable rates which will depend upon
      future metal prices and are inherently uncertain. A reconciliation of the
      reclamation and remediation provision is as
      follows:

| |                            |   | December 31, |  |   | December 31, |  
| | -------------------------- | - | ------------ |  | - | ------------ | -
| |                            |   | 2011         |  |   | 2010         |  
| | Balance, beginning of year | $ | 1,955        |  | $ | 2,086        |  
| | Revision in estimates      |   | 152          |  |   | (172         | )
| | Accretion expense          |   | 47           |  |   | 41           |  
| | Balance, end of
      year | $ | 2,154        |  | $ | 1,955        |  

The reclamation and remediation
  provision is based on the following assumptions:

| |  | The total undiscounted estimated cash flows required to
      settle the Companys estimated obligations is US$2,039 (2010  US$2,039).                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | The increase in mine life (note 3d) at both the
      Guanajuato and Topia mines had the effect of decreasing the asset
      retirement obligations and their corresponding assets. The decrease was
      offset by decreases in the interest rate used to discount the cash flows
      and the weakening of the Canadian dollar against the US dollar during the
      year ended December 31, 2011. The resulting effect is a revision in
      estimate of the reclamation and remediation provision for the Guanajuato
      and Topia mines, increasing by $43 and $109, respectively.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | The expected timing of payments totaling US$2,039 is
      estimated as follows: US$756 in 2017, US$125 in 2018, US$125 in 2019,
      US$783 in 2022, US$125 in 2023 and US$125 in 2024. This timing matches the
      estimated remaining life of the mines, which is 5 years for Guanajuato and
      10 years for Topia.                                                                                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | A risk-free rate of 1.89% for Topia and 0.83% for
      Guanajuato (2010  3.3% and 1.02% respectively) has been used to discount
      the cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                       

|11. | Share capital
|--- | -------------
|    |              
|    | (a)          
|    |              
|    |              
|    |              
|    |              
|    |              
|    |              
|    |              
|    | (b)          
|    |              
|    |              
|    |              
|    |              
|    |              
|    | (c)          
|    |              
|    |              
|    |              
|    | (d)          
|    |              
|    |              
|    |              
|    |              

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, 2011 and 2010           

|11. | Share capital-
      continued
|--- | ------------------------------

The continuity of share options for
  the year ended December 31, 2011 is as follows:

Balance
      
      
      
      
      BalanceExercise
      
      December 31,
      
      
      
      
      December 31,Price
      Expiry date
      2010
      Granted
      Cancelled
      Expired
      Exercised
      2011$ 0.90
      January 5, 2011
      125,000
      -
      -
      -
      (125,000)
      -$ 0.45
      February 8, 2014
      1,988,000
      -
      -
      -
      (1,183,000)
      805,000$ 0.45
      February 29, 2012
      160,000
      -
      -
      -
      (160,000)
      -$ 0.52
      March 25, 2011
      200,000
      -
      -
      -
      (200,000)
      -$ 0.70
      September 3, 2014
      965,000
      -
      -
      -
      (650,000)
      315,000$ 0.90
      February 29, 2012
      90,000
      -
      -
      -
      (90,000)
      -$ 0.90
      December 2, 2014
      337,500
      -
      -
      -

      (175,500)
      162,000$ 0.90
      July 11, 2015
      245,000
      -
      -
      -
      (127,000)
      118,000$ 1.15
      October 17, 2015
      105,000
      -
      -
      -
      (53,500)
      51,500$ 1.90
      November 21, 2015
      415,000
      -
      -
      -
      (325,000)
      90,000$ 2.40
      December 5, 2016
      -
      2,705,000
      -
      -
      -
      2,705,0004,630,500
      2,705,000
      
      -
      (3,089,000)
      4,246,500Weighted average exercise price
      $ 0.73
      $ 2.40
      -
      -
      $ 0.75
      $ 1.78


As at December 31, 2011, all share
  options are fully vested. The weighted average remaining contractual life of the
  options outstanding as at December 31, 2011 is 4.08 years.

The continuity of share options for
  the year ended December 31, 2010 is as follows:

Balance
      
      
      
      
      BalanceExercise
      
      January 1,
      
      
      
      
      December 31,Price
      Expiry date
      2010
      Granted
      Cancelled
      Expired
      Exercised
      2010$ 0.45
      February 27, 2010
      125,000
      -
      -
      -
      (125,000)
      -$ 0.45
      July 26, 2010
      400,000
      -
      -
      -
      (400,000)
      -$ 0.90
      January 5, 2011
      830,000
      -
      -
      -
      (705,000)
      125,000$ 0.45
      February 8, 2014
      3,944,125
      -
      -
      -
      (1,956,125)
      1,988,000$ 0.45
      February 29, 2012
      160,000
      -
      -
      -
      -
      160,000$ 0.52
      March 25, 2011
      310,000
      -
      -
      -
      (110,000)
      200,000$ 0.70
      September 3, 2014
      1,290,000
      -
      -
      -
      (325,000)
      965,000$ 0.90
      December 3, 2010
      185,000
      -
      -
      -
      (185,000)
      -$ 0.90
      February 29, 2012
      90,000
      -
      -
      -
      -
      90,000$ 0.90
      December 2, 2014
      580,000
      -
      -
      -
      (242,500)
      337,500$ 0.90
      July 11, 2015
      -
      670,000
      (65,000)
      -
      (360,000)
      245,000$ 1.15
      October 17, 2015
      -
      240,000
      (25,000)
      -
      (110,000)
      105,000$ 1.90
      November 21, 2015
      -
      415,000
      -
      -
      -
      415,0007,914,125
      1,325,000
      (90,000)
      -
      (4,518,625)
      4,630,500Weighted average exercise price
      $ 0.59
      $ 1.24
      $ 0.93
      -
      $ 0.64
      $ 0.73


As at December 31, 2010, all share
  options were fully vested. The weighted average remaining contractual life of
  the options outstanding as at December 31, 2010 was 3.25 years.

During the year ended December 31,
  2011, the Company recorded compensation expense for the fair value of share
  options of $2,496 (2010 - $869) for share options that were granted during the
  period. The weighted average fair value of options granted during 2011 was $0.92
  (2010 - $0.61) .

17

---

|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, 2011 and 2010           

|11. | Share capital-
      continued
|--- | ------------------------------

The fair value per option granted was
  determined using the following weighted average assumptions at the time of the
  grant using the Black Scholes option pricing model as follows:

| |                         |  | 2011       |  |  | 2010      | 
| | ----------------------- |  | ---------- |  |  | --------- | 
| | Risk-free interest rate |  | 0.88%      |  |  | 1.6%      | 
| | Expected life           |  | 1.94 years |  |  | 2.1 years | 
| | Annualized volatility   |  | 79%        |  |  | 108.3%    | 
| | Dividend rate           |  | -          |  |  | -         | 

| | (e) | Warrants:                                                                           
| | --- | ------------------------------------------------------------------------------------
| |     |                                                                                     
| |     | The continuity of warrants for the year ended December
      31, 2011 is as follows:

| |                                 |   |          |  |                   |      | Balance,     |   |      |         |   |      |            |   |      |         |   |  | Balance,     | 
| | ------------------------------- | - | -------- |  | ----------------- | ---- | ------------ | - | ---- | ------- | - | ---- | ---------- | - | ---- | ------- | - |  | ------------ | 
| |                                 |   | Exercise |  |                   |      | December 31, |   |      |         |   |      |            |   |      |         |   |  | December 31, | 
| | Series                          |   | price    |  | Expiry date       |      | 2010         |   |      | Issued  |   |      | Exercised  |   |      | Expired |   |  | 2011         | 
| | SFPO(1)warrants                 | $ | 0.90     |  | November 17, 2011 |      | 6,315,650    |   |      | -       |   |      | (6,307,150 | ) |      | (8,500  | ) |  | -            | 
| | Agent warrants                  | $ | 0.90     |  | November 17, 2011 |      | 548,996      |   |      | -       |   |      | (548,996   | ) |      | -       |   |  | -            | 
| | Underwriters warrants          | $ | 4.20     |  | April 12, 2013    |      | -            |   |      | 316,250 |   |      | -          |   |      | -       |   |  | 316,250      | 
| |                                 |   |          |  |                   |      | 6,864,646    |   |      | 316,250 |   |      | (6,856,146 | ) |      | (8,500  | ) |  | 316,250      | 
| | Weighted average exercise price | $ | 0.90     |  | $                 | 4.20 |              | $ | 0.90 |         | $ | 0.90 |            | $ | 4.20 |        

(1) Short Form Prospectus
  Offering, SFPO

The Underwriters warrants associated
  with the bought deal financing (note 11c) were valued at $384 using the Black
  Scholes model. The assumptions used for the valuation of the Underwriters
  warrants were a risk-free interest rate of 1.85%, volatility of 76.7%, dividends
  paid of nil, exercise price of $4.20 per share, and an expected life of the
  warrants of 1.24 years. The weighted average fair value of warrants issued
  during 2011 was $1.21 (2010  nil).

The continuity of warrants for the
  year ended December 31, 2010 was as follows:

| |                                       |   |          |  |                   |   | Balance,   |   |      |        |  |   |            |   |      |         |  |  | Balance,     | 
| | ------------------------------------- | - | -------- |  | ----------------- | - | ---------- | - | ---- | ------ |  | - | ---------- | - | ---- | ------- |  |  | ------------ | 
| |                                       |   | Exercise |  |                   |   | January 1, |   |      |        |  |   |            |   |      |         |  |  | December 31, | 
| | Series                                |   | price    |  | Expiry date       |   | 2010       |   |      | Issued |  |   | Exercised  |   |      | Expired |  |  | 2010         | 
| | Series L                            |   |          |  |                   |   |            |   |      |        |  |   |            |   |      |         |  |  |              | 
| | Warrants                              | $ | 0.35     |  | January 22, 2010  |   | 1,177,500  |   |      | -      |  |   | (1,177,500 | ) |      | -       |  |  | -            | 
| | Finders                              | $ | 0.35     |  | January 22, 2010  |   | 70,756     |   |      | -      |  |   | (70,756    | ) |      | -       |  |  | -            | 
| | Warrants                              |   |          |  |                   |   |            |   |      |        |  |   |            |   |      |         |  |  |              | 
| | SFPO Warrants                         | $ | 0.90     |  | November 17, 2011 |   | 8,808,750  |   |      | -      |  |   | (2,493,100 | ) |      | -       |  |  | 6,315,650    | 
| | Agent Warrants                        | $ | 0.90     |  | November 17, 2011 |   | 963,150    |   |      | -      |  |   | (414,154   | ) |      |         |  |  | 548,996      | 
| |                                       |   |          |  |                   |   | 11,020,156 |   |      | -      |  |   | (4,155,510 | ) |      | -       |  |  | 6,864,646    | 
| | Weighted
      average exercise price | $ | 0.80     |  |                   | - |            | $ | 0.64 |        |  | - |            | $ | 0.90 |        

18

---

|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, 2011 and 2010           

|11. | Share capital- continued
|--- | ------------------------
|    |                         
|    | (f)                     
|    |                         
|    |                         

| |                                                       |  | 2011        |  |  | 2010        | 
| | ----------------------------------------------------- |  | ----------- |  |  | ----------- | 
| | Shares outstanding at January 1                       |  | 119,913,766 |  |  | 111,239,631 | 
| | Effect of share options exercised                     |  | 2,292,166   |  |  | 1,632,168   | 
| | Effect of warrants exercised                          |  | 3,253,708   |  |  | 1,550,427   | 
| | Effect of extinguishment of convertible notes         |  | 1,469,589   |  |  | -           | 
| | Effect of short form prospectus offering              |  | 4,143,151   |  |  | -           | 
| | Basic weighted average number of shares outstanding   |  | 131,072,380 |  |  | 114,422,226 | 
| | Effect of dilutive share options                      |  | 1,811,979   |  |  | 2,836,319   | 
| | Effect of dilutive
      warrants                     |  | 2,516,754   |  |  | 1,674,075   | 
| | Diluted weighted average number of shares outstanding |  | 135,401,113 |  |  | 118,932,620 | 

| |     | For the year ended December 31, 2011 there were 90,610
      (2010  35,609) potentially dilutive shares that have not been included in
      the diluted earnings per share calculation for the period
      presented.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (g) | Shareholder Rights Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | On March 7, 2008, the Board of Directors approved the
      adoption of a Shareholder Rights Plan (the "Plan") as part of its
      procedures for dealing with any parties who may seek to acquire control of
      the Company through a take-over bid or other transaction. To implement the
      Plan, the Board of Directors of the Company authorized the issue of one
      Right in respect of each common share of the Company outstanding to
      holders of record on March 7, 2008. Until the occurrence of certain
      specific events, the Rights will trade with the common shares of the
      Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The Rights become exercisable only when a person,
      including any party related to it or acting jointly with it, acquires or
      announces its intention to acquire 20% or more of the outstanding common
      shares of the Company without complying with the "Permitted Bid"
      provisions of the Plan. Under the Plan, a Permitted Bid is a bid made to
      all shareholders on identical terms and conditions that is open for at
      least 60 days. If at the end of 60 days more than 50% of the outstanding
      shares, other than those owned by the offeror and certain persons related
      to the offeror or acting jointly with it, have been tendered, the offeror
      may take up and pay for the shares but must extend the bid for a further
      10 business days to allow all other shareholders to tender. Should a
      non-permitted acquisition occur, each Right would entitle each holder of
      common shares (other than the offeror and certain parties related to the
      offeror or acting jointly with it) to purchase additional common shares of
      the Company at a 50% discount to the market price at the time.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The Plan was ratified on June 27, 2008 and will continue
      until the annual general meeting of shareholders in
      2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

|12. | General and administrative
      expenses
|--- | -----------------------------------------

| |                               |   | 2011  |  |   | 2010  | 
| | ----------------------------- | - | ----- |  | - | ----- | 
| | Administrative expenses       | $ | 7,761 |  | $ | 5,929 | 
| | Amortization and depreciation |   | 97    |  |   | 52    | 
| | Share-based payments          |   | 1,248 |  |   | 388   | 
| |                               | $ | 9,106 |  | $ | 6,369 | 

|13. | Finance costs
|--- | -------------

| |                                                          |   | 2011 |  |   | 2010  | 
| | -------------------------------------------------------- | - | ---- |  | - | ----- | 
| | Interest accretion on convertible loan
      notes       | $ | 239  |  | $ | 939   | 
| | Interest expense                                         |   | -    |  |   | 92    | 
| | Lease interest                                           |   | 38   |  |   | 82    | 
| | Accretion on
      reclamation and remediation provision |   | 47   |  |   | 41    | 
| |                                                          | $ | 324  |  | $ | 1,154 | 

19

---

|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, 2011 and 2010           

|14. | Capital management                                          
|--- | ------------------------------------------------------------
|    |                                                             
|    | The Companys objectives when managing capital are
      to:

| |  | 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.                                                                                          

|    | The Topia and Guanajuato mines are in production, but
      exploration activities are also performed at these properties in order to
      identify further resources. The Company plans to use funds from the sale
      of concentrates to fund operations and exploration activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Company manages its capital in a manner that provides
      sufficient funding for operational activities. Annual capital and
      operating expenditure budgets, and rolling forecasts, are used to
      determine the necessary capital requirements. These budgets are approved
      by management and the Board of Directors and updated for changes in the
      underlying assumptions, economic conditions and risk characteristics of
      the underlying assets, as necessary. For the year ended December 31, 2011,
      the Companys management assessed changes in quantitative and qualitative
      data with respect to the Companys objectives, policies and processes for
      managing capital implemented in the prior year to ensure their continued
      appropriateness. Going forward, the Company will continue to focus on
      internally generated cash flow to reduce or eliminate its reliance on
      equity and debt financing.                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Companys capital structure is dependent on expected
      business growth and changes in the business environment. As at December
      31, 2011, the Company is not subject to externally imposed capital
      requirements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|15. | Derivative financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | On July 22, 2010, the Company entered into a zinc put and
      call option contract (the 2010 Zinc Contract) for 500 metric tonnes with
      a contract period from July 2010 to December 2010. The floor and cap price
      per metric tonne is US$1,800 and US$1,975, respectively. Under the terms
      of the 2010 Zinc Contract, the Company received the prevailing market zinc
      price while within the price range. Outside of the price range, the
      Company received a minimum of the floor price or a maximum of the cap
      price if the market price is below the floor price and above the cap
      price, respectively. The 2010 Zinc Contract was settled in early January
      2011.                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | On November 3, 2010, the Company entered into a lead put
      and call option contract (the Lead Contract) for a total of 500 metric
      tonnes which are settled equally over ten monthly contract periods from
      December 2010 to September 2011. The floor and cap price per metric tonne
      is US$1,800 and US$3,100, respectively. Under the terms of the Lead
      Contract, the Company received the prevailing market lead price while
      within the price range. Outside the price range, the Company received a
      minimum of the floor price or a maximum of the cap price if the market is
      below the floor price and above the cap price, respectively. Also under
      the terms of the Lead Contract, the Company pledged $101 (US$100) as cash
      collateral. Accordingly, this amount was also classified as restricted
      cash. As at December 31, 2011, the cash collateral from the Lead Contract
      is $nil (2010 - $101) and the liability under the Lead Contract is $nil
      (2010 - $23).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | On August 30, 2011 the Company entered into a zinc put
      and call option contract (the 2011 Zinc Contract) for 50 metric tonnes
      with a contract period from August 2011 to November 2011. The floor and
      cap price per metric tonne were US$2,000 and US$2,525 respectively. Under
      the terms of the 2011 Zinc Contract, the Company was entitled to receive
      prevailing market zinc prices while within the floor and cap range.
      Outside of the price range, the Company was entitled to receive a minimum
      of the floor price or a maximum of the cap price if the market price was
      below the floor price and above the cap price, respectively. The 2011 Zinc
      Contract was closed in October 2011 as the counter-party became
      insolvent.                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Company determined that these contracts are
      derivative financial instruments that should be measured at fair value at
      each reporting period with any gains or losses recognized in profit or
      loss in the period in which they arise. During the year ended December 31,
      2011, the Company recorded a mark-to-market gain of $24 (2010  $148
      loss).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

20

---

|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, 2011 and 2010           

|16. | Fair value of financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The carrying values of cash and cash equivalents, trade
      and other receivables, and trade and other payables approximate their fair
      values due to the short-term nature of the items. The fair values of
      marketable securities are based on current bid prices at December 31,
      2011. The fair values of the capital lease obligations to third parties
      approximate their amortized costs as the interest rates reflect estimated
      market rates at December 31, 2011.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | In evaluating fair value information, considerable
      judgment is required to interpret the market data used to develop the
      estimates. The use of different market assumptions and valuation
      techniques may have a material effect on the estimated fair value amounts.
      Accordingly, the estimates of fair value presented herein may not be
      indicative of the amounts that could be realized in a current market
      exchange.                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | IFRS requires disclosures about the inputs to fair value
      measurements, including their classification within a hierarchy that
      prioritizes the inputs to fair value measurement. The three levels of the
      fair value hierarchy are:                                                                                                                                                                                                                                                   

| |  | 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                                                              

The following tables illustrate the
  valuation method of the Companys financial instruments carried at fair value as
  at December 31, 2011 and 2010:

Financial Assets:

Financial assets at fair value as at
  December 31, 2011

| |                       |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total | 
| | --------------------- |  | ------- |  |  | ------- |  |  | ------- |  |  | ----- | 
| | Marketable securities |  | 80      |  |  | -       |  |  | -       |  |  | 80    | 

Financial assets at fair value as at
  December 31, 2010

| |                       |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total | 
| | --------------------- |  | ------- |  |  | ------- |  |  | ------- |  |  | ----- | 
| | Marketable securities |  | 200     |  |  | -       |  |  | -       |  |  | 200   | 

Financial Liabilities:

There were no financial liabilities at
  fair value as at December 31, 2011.

Financial liabilities at fair value as
  at December 31, 2010

| |                                 |   | Level 1 |  |   | Level 2 |  |   | Level 3 |  |   | Total | 
| | ------------------------------- | - | ------- |  | - | ------- |  | - | ------- |  | - | ----- | 
| | Derivative instrument liability | $ | -       |  | $ | 53      |  | $ | -       |  | $ | 53    | 

|    | During the year ended December 31, 2011, a mark-to-market
      loss of $103 (2010  $10 loss) for marketable securities designated as
      available-for-sale has been recognized in other comprehensive loss.
      Available-for-sale financial assets are denominated in Canadian dollars.
      There were no disposals during the year. At December 31, 2011, receivables
      of $220 (2010 - $232) were impaired and provided for.                                                                                                                                                                                          
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|17. | Financial risk exposure and risk
      management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Company is exposed in varying degrees to a number of
      risks arising from financial instruments. Managements close involvement
      in the operations allows for the identification of risks and variances
      from expectations. The Board approves and monitors the risk management
      processes. The Boards main objectives for managing risks are to ensure
      liquidity, the fulfillment of obligations, the continuation of the
      Companys exploration program, and limited exposure to credit and market
      risks. There were no changes to the objectives or the process from the
      prior year.

21

---

|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, 2011 and 2010           

|17. | Financial risk exposure and risk management-
      continued                                    
|--- | ------------------------------------------------------------------------------------------------
|    |                                                                                                 
|    | The types of risk exposure and the way in which such
      exposures are managed are as follows:
|    |                                                                                                 
|    | (a)                                                                                             
|    |                                                                                                 
|    |                                                                                                 
|    |                                                                                                 
|    | (b)                                                                                             
|    |                                                                                                 
|    |                                                                                                 
|    |                                                                                                 
|    |                                                                                                 
|    |                                                                                                 
|    |                                                                                                 
|    |                                                                                                 
|    |                                                                                                 

| |                      |   | December 31, |  |   | December 31, |  |   | January 1, | 
| | -------------------- | - | ------------ |  | - | ------------ |  | - | ---------- | 
| |                      |   | 2011         |  |   | 2010         |  |   | 2010       | 
| | Less than 30 days    | $ | 7,583        |  | $ | 4,097        |  | $ | 2,541      | 
| | Within 31 to 60 days |   | 596          |  |   | 654          |  |   | 776        | 
| | Within 61 to 90 days |   | 190          |  |   | 400          |  |   | 155        | 
| | More than 90 days    |   | 2,811        |  |   | -            |  |   | -          | 
| |                      | $ | 11,180       |  | $ | 5,151        |  | $ | 3,472      | 

| | (c) | Liquidity risk:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | Liquidity risk is the risk that the Company will not be
      able to meet its financial obligations as they become due.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The Company ensures there is sufficient capital to meet
      short term business requirements. A key management goal is to maintain an
      optimal level of liquidity through the active management of the Companys
      assets, liabilities and cash flows. The Company prepares annual budgets
      which are approved by the Board of Directors and prepares cash flows and
      liquidity forecasts on a quarterly basis.                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | For the year ended December 31, 2011, cash flows provided
      by operations, receipt of trade and VAT receivables, proceeds from the
      issuance of shares, and proceeds from warrants and options exercised
      during the year were used to fund the operating costs associated with the
      producing properties as well as mineral property exploration expenditures
      and head office costs. The Companys cash and cash equivalents are
      invested in high interest savings accounts and guaranteed investment
      certificates which are available on demand to fund the Companys operating
      costs and other financial demands.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The Companys financial liabilities consist of trade and
      other payables and capital lease obligations, and are due within one
      year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (d) | Market risk:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The significant market risks to which the Company is
      exposed are currency, interest rate and commodity price
      risk.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

(i) Currency risk

The operating results and financial
  position of the Company are reported in Canadian dollars. As the Company
  operates in an international environment, some of the Companys financial
  instruments and transactions are denominated in currencies other than the
  Canadian dollar. The results of the Companys operations are subject to currency
  transaction and translation risks.

22

---

|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, 2011 and 2010           

|17. | Financial risk exposure and risk management-
      continued
|--- | ------------------------------------------------------------

The Companys exploration, development
  and operating costs, and a significant portion of its administrative costs are
  in Mexico and are denominated in Mexican Pesos or US dollars. Revenues from the
  sale of concentrates are denominated in US dollars. The fluctuation of the US
  dollar and Mexican Peso in relation to the Canadian dollar will consequently
  impact the profitability of the Company and may also affect the value of the
  Companys assets and the amount of shareholders equity.

Comparative foreign exchange rates as
  at December 31 are as follows:

| |                                |   | December 31, |  |   | December 31, | 
| | ------------------------------ | - | ------------ |  | - | ------------ | 
| |                                |   | 2011         |  |   | 2010         | 
| | MXN Peso per CDN Dollar        | $ | 13.7212      |  | $ | 12.4100      | 
| | US Dollar per CDN
      Dollar | $ | 0.9833       |  | $ | 1.0054       | 

The Company has significant
  inter-company loans receivable from and loans payable to one of its Mexican
  subsidiaries, denominated in Canadian and US dollars. Since the loans receivable
  have fixed repayment dates and are expected to be repaid to the parent Company,
  they are not considered to be permanently invested in the foreign operation.
  Therefore, unrealized gains and losses on these loans are reflected in the
  consolidated net income of the Company for the reporting period. During the year
  ended December 31, 2011, the Company recorded a net foreign exchange loss of
  $4,040 (2010 - $415 gain) relating to the inter-company loans receivable and
  payable due to the rise in the Canadian dollar and US dollar against the Mexican
  Peso.

The Company has not entered into any
  agreements or purchased any foreign currency hedging arrangements to hedge
  possible currency risks at this time. Management believes the foreign exchange
  risk derived from currency conversions for the Mexican operations is not
  significant and therefore does not hedge its foreign exchange risk.
  Additionally, the US dollar trade accounts receivable are short term in nature
  and the foreign currency risk exposure on those receivables is minimal.

| | (ii)  | Interest rate risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |       | The Companys policy is to invest cash in high interest
      savings accounts and guaranteed investment certificates at fixed or
      floating rates of interest in order to maintain liquidity, while achieving
      a satisfactory return for shareholders. Fluctuations in interest rates
      impact the value of cash and cash equivalents. The Company manages risk by
      monitoring changes in interest rates in comparison to prevailing market
      rates. As at December 31, 2011, the Company held $35,845 (2010 - $12,957)
      in high interest savings accounts and guaranteed investment
      certificates.                                     
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (iii) | Commodity price risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |       | The value of the Companys mineral resource properties
      depends on the price of silver, gold, lead and zinc and the outlook for
      these minerals. At December 31, 2011, market prices were US$27.80/oz (2010
       US$30.63/oz) for silver, US$1,564.45/oz (2010 - US$1,410/oz) for gold,
      US$1,979.75/tonne (2010 - US$2,586/tonne) for lead, and US$1,827.50/tonne
      (2010  US$2,432/tonne) for zinc.                                                                                                                                                                                                                                             
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |       | Silver and gold, as well as lead and zinc prices have
      historically fluctuated widely and are affected by numerous factors
      outside of the Companys control, including, but not limited to, market
      fluctuations, government regulations relating to prices, taxes, royalties,
      allowable production, imports, exports, supply, industrial and retail
      demand, forward sales by producers and speculators, levels of worldwide
      production and short-term changes in supply and demand because of
      speculative hedging activities. The value of trade receivables depends on
      changes in metal prices over the quotation period.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |       | The profitability of the Companys operations is highly
      correlated to the market price of silver and gold. If metal prices decline
      for a prolonged period below the cost of production of the Companys Topia
      and Guanajuato mines, it may not be economically feasible to continue
      production.                                                                                                                                                                                                                                                                                                                                                  
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |       | During the year, the Company held derivative financial
      instruments to mitigate certain fluctuations in lead and zinc prices (note
      15).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (iv)  | Sensitivity analysis                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |       | Based on historic trends over the last twelve months,
      volatilities in the above-noted market risks, and managements knowledge
      and experience in the financial markets, the Company believes the
      following movements are reasonably possible over a twelve-month
      period:                                                                                                                                                                                                                                                                                                                                                                         

| |  | A change of +1%/-1% from the prevailing market interest
      rates on deposits as of December 31, 2011.                                                                                                                                     
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                              
| |  | Proportional foreign exchange movement of -10%
      (depreciation of CDN Dollar) and +10% (appreciation of CDN Dollar) against
      the US Dollar, from the December 31, 2011 CDN Dollar to US Dollar exchange
      rate of 0.9833.       
| |   |                                                                                                                                                                                                                                              
| |  | Proportional foreign exchange movement of -10%
      (depreciation of CDN Dollar) and +10% (appreciation of CDN Dollar) against
      the Mexican Peso, from the December 31, 2011 CDN Dollar to Mexican Peso
      exchange rate of 13.7212.
| |   |                                                                                                                                                                                                                                              
| |  | A change of +10%/-10% from the prevailing commodity
      prices of US$27.80/oz for silver, US$1,564.45/oz for gold,
      US$1,979.75/tonne for lead, and US$1,827.50/tonne for zinc as of December
      31, 2011.                         

23

---

|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, 2011 and 2010           

|17. | Financial risk exposure and risk management-
      continued
|--- | ------------------------------------------------------------

If these movements were to occur, the
  impact on the consolidated net income (loss) for each category of financial
  instrument held at December 31, 2011 and December 31, 2010 are as follows:

December 31, 2011
      
      
      
      
      Interest Rate Risk
      
      
      Currency Rate Risk
      
      
      Commodity Price Risk-1%
      
      
      +1%
      
      
      -10%
      
      
      +10%
      
      
      -10%
      
      
      +10%CarryingAmount
      
      
      Income
      
      
      Income
      
      
      Income
      
      
      Income
      
      
      Income
      
      
      IncomeFinancial assetsCash and cash equivalentsCDN dollars
      $
      27,685
      
      $
      (277
      )
      $
      277
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -US dollars
      
      4,270
      
      
      (43
      )
      
      43
      
      
      474
      
      
      (388
      )
      
      -
      
      
      -Mexican Pesos
      
      7,482
      
      
      (75
      )
      
      75
      
      
      688
      
      
      (563
      )
      
      -
      
      
      -Accounts receivable 
            
        US dollars
      
      8,116
      
      
      -
      
      
      -
      
      
      902
      
      
      (738
      )
      
      (812
      )
      
      812Inter-company loans 
            
        receivable CDN dollars
      
      50,796
      
      
      -
      
      
      -
      
      
      5,644
      
      
      (4,618
      )
      
      -
      
      
      -Financial liabilitiesTrade and other payables 
            
        US dollars
      
      1,846
      
      
      -
      
      
      -
      
      
      (205
      )
      
      168
      
      
      -
      
      
      -Inter-company loans 
            
        payable US dollars
      
      4,735
      
      
      -
      
      
      -
      
      
      (508
      )
      
      445
      
      
      -
      
      
      -Capital lease obligation
              US
        dollars
      
      130
      
      
      -
      
      
      -
      
      
      (15
      )
      
      12
      
      
      -
      
      
      -Total increase (decrease)
      
      
      
      $
      (395
      )
      $
      395
      
      $
      6,980
      
      $
      (5,682
      )
      $
      (812
      )
      $
      812


24

---

|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, 2011 and 2010           

|17. | Financial risk exposure and risk management-
      continued
|--- | ------------------------------------------------------------

December 31, 2010
      
      
      
      
      Interest Rate Risk
      
      
      Currency Rate Risk
      
      
      Commodity Price Risk-1%
      
      
      +1%
      
      
      -10%
      
      
      +10%
      
      
      -10%
      
      
      +10%CarryingAmount
      
      
      Income
      
      
      Income
      
      
      Income
      
      
      Income
      
      
      Income
      
      
      IncomeFinancial assetsCash and cash equivalentsCDN dollars
      $
      11,436
      
      $
      (114
      )
      $
      114
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -US dollars
      
      2,336
      
      
      (23
      )
      
      23
      
      
      260
      
      
      (212
      )
      
      -
      
      
      -Accounts receivable 
            
        US dollars
      
      5,159
      
      
      -
      
      
      -
      
      
      573
      
      
      (469
      )
      
      (515
      )
      
      515Inter-company loans 
            
        receivable CDN dollars
      
      29,369
      
      
      -
      
      
      -
      
      
      3,263
      
      
      (2,670
      )
      
      -
      
      
      -Financial liabilitiesTrade and other payables 
            
        US dollars
      
      158
      
      
      -
      
      
      -
      
      
      (18
      )
      
      14
      
      
      -
      
      
      -Inter-company loans 
            
        payable US dollars
      
      1,740
      
      
      -
      
      
      -
      
      
      (187
      )
      
      163
      
      
      -
      
      
      -Capital lease obligation 
             US dollars
      
      497
      
      
      -
      
      
      -
      
      
      (55
      )
      
      45
      
      
      -
      
      
      -Total increase (decrease)
      
      
      
      $
      (137
      )
      $
      137
      
      $
      3,836
      
      $
      (3,129
      )
      $
      (515
      )
      $
      515


At December 31, 2011, if the Canadian
  dollar had weakened or strengthened against the Mexican Peso by 10%, the
  additional net effect to shareholders' equity would be an increase of $404 or
  decrease of $331 respectively. At December 31, 2011, if commodity prices had
  decreased or increased by 10%, the additional net effect to shareholders' equity
  would be a decrease or increase of $306 respectively.

|18. | Income taxes                                                                                                                                                  
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                               
|    | (a) Recovery of (provision for) income taxes:                                                                                                                 
|    |                                                                                                                                                               
|    | Income tax recovery (expense) differs from the amount
      which would result from applying the statutory Canadian tax rates for the
      following reasons:

| |                                                            |   | 2011   |   |  | 2010   |  
| | ---------------------------------------------------------- | - | ------ | - |  | ------ | -
| | Net income before tax                                      | $ | 13,491 |   |  | 8,577  |  
| | Canadian income tax rate                                   |   | 26.50% |   |  | 28.50% |  
| |                                                            |   |        |   |  |        |  
| | Income tax expense expected                                |   | (3,575 | ) |  | (2,444 | )
| | Permanent differences                                      |   | (1,175 | ) |  | (828   | )
| | Different in tax rates                                     |   | (295   | ) |  | (150   | )
| | Reversal of Mexican flat tax liability                     |   | -      |   |  | 1,708  |  
| | Benefit of tax
      attributes recognized and other items |   | 3,060  |   |  | 3,797  |  
| | Total income tax (expense) recovery                        | $ | (1,985 | ) |  | 2,083  |  

25

---

|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, 2011 and 2010           

|18. | Income taxes- continued                                                              
|--- | -------------------------------------------------------------------------------------
|    |                                                                                      
|    | (b) Unrecognized deferred tax assets:                                                
|    |                                                                                      
|    | Deferred tax assets have not been recognized in respect
      of the following items:

| |                                            |   | 2011  |  |   | 2010  | 
| | ------------------------------------------ | - | ----- |  | - | ----- | 
| | Deductible (taxable) temporary differences | $ | 1,690 |  | $ | 1,297 | 
| | Tax losses                                 |   | 2,958 |  |   | 5,003 | 
| |                                            | $ | 4,648 |  | $ | 6,300 | 

At December 31, 2011, the Company had
  operating loss carry forwards of $20,454 (2010 - $34,134) and capital loss carry
  forwards of $1,683 (2010  $1,683). The operating loss carry forwards at
  December 31, 2011 includes $10,910 (2010 - $18,610) in Canada and $9,544 (2010 
  $15,524) in Mexico. The capital losses are without expiry, and the operating
  losses expire at various dates to 2029.

(c) Movements in temporary differences
  during 2010 and 2011 were as follows:

Mineral
      
      
      
      
      
      
      
      
      Reclamationproperties,
      
      
      
      
      
      Financial
      
      
      and
      
      
      Tax lossplant and
      
      
      Loans and
      
      
      liabilities at
      
      
      remediation
      
      
      carry2010
      
      equipment
      
      
      receivables
      
      
      amortized cost
      
      
      provision
      
      
      forwards
      
      
      TotalBalance, January 1, 2010
      $
      (2,098
      )
      $
      (618
      )
      $
      -
      
      $
      339
      
      $
      215
      
      $
      (2,162
      )Recognized in
        profit or loss
      
      (2,532
      )
      
      589
      
      
      -
      
      
      (339
      )
      
      4,444
      
      
      2,162Balance, December 31, 2010
      $
      (4,630
      )
      $
      (29
      )
      $
      -
      
      $
      -
      
      $
      4,659
      
      $
      -


The Company had deferred tax assets
  relating to one of its Mexican subsidiaries at December 31, 2010 that were not
  recognized. At December 31, 2011, the same subsidiary had a deferred tax
  liability and this amount was recognized in the statement of financial position
  at December 31, 2011.

Mineral
      
      
      
      
      
      
      
      
      Reclamationproperties,
      
      
      
      
      
      Financial
      
      
      and
      
      
      Tax lossplant and
      
      
      Loans and
      
      
      liabilities at
      
      
      remediation
      
      
      carryequipment
      
      
      receivables
      
      
      amortized cost
      
      
      provision
      
      
      forwards
      
      
      TotalBalance, January 1, 2011
      $
      (4,630
      )
      $
      (29
      )
      $
      -
      
      $
      -
      
      $
      4,659
      
      $
      -Recognized in
        profit or loss
      
      (417
      )
      
      68
      
      
      35
      
      
      305
      
      
      (1,815
      )
      
      (1,824
      )Balance, December 31, 2011
      $
      (5,047
      )
      $
      39
      
      $
      35
      
      $
      305
      
      $
      2,844
      
      $
      (1,824
      )


|19. | Related party
      transactions
|--- | --------------------------------

| |                                                                                                           |   | 2011  |  |   | 2010  |  
| | --------------------------------------------------------------------------------------------------------- | - | ----- |  | - | ----- | -
| | Consulting fees paid or accrued to
      companies controlled by directors of the Company                 | $ | 781   |  | $ | 702   |  
| | Consulting fees paid or accrued to companies controlled by
      officers of the Company                  |   | 290   |  |   | 215   |  
| | Director fees paid or accrued                                                                             |   | 189   |  |   | 160   |  
| | Cost recoveries received or accrued from a company with a
      common director of the Company            |   | -     |  |   | (51   | )
| | Office and administration fees paid or accrued to a company
      controlled by a director of the Company |   | 85    |  |   | 86    |  
| |                                                                                                           | $ | 1,345 |  | $ | 1,112 |  

As at December 31, 2011, $42 (2010 -
  $167) was due to companies controlled by officers and directors of the Company
  and was included in accounts payable. Amounts due from companies with common
  directors were $24 (2010 - $75) and were included in trade and other
  receivables.

The above transactions occurred in the
  normal course of operations and are measured at fair value.

26

---

|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, 2011 and 2010           

|19. | Related party transactions-
      continued                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                           
|    | Compensation of key management personnel                                                                                                                  
|    |                                                                                                                                                           
|    | The remuneration of directors and other members of key
      management personnel during the years ended December 31, 2011 and 2010
      were as follows:

| |                                 |   | 2011  |  |   | 2010  | 
| | ------------------------------- | - | ----- |  | - | ----- | 
| | Short-term benefits (i)         | $ | 2,509 |  | $ | 2,246 | 
| | Share-based
      payments (ii) |   | 969   |  |   | 118   | 
| |                                 | $ | 3,478 |  | $ | 2,364 | 

| | (i)  | Short-term benefits include salaries and benefits,
      consulting and management fees.                                                  
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------
| | (ii) | Share-based payments are the fair value of options
      granted to key management personnel under the stock option plan (note
      11d).

|    | The Company is committed to making severance payments
      amounting to approximately $3,352 to certain officers and management in
      the event that there is a change of control of the Company.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                      
|    | Subsequent to December 31, 2011 a payment in the amount
      of $676 was made to an executive and director in connection with his
      retirement and resignation from the board of directors.     
|    |                                                                                                                                                                                                      
|20. | Commitments                                                                                                                                                                                          
|    |                                                                                                                                                                                                      
|    | As of December 31, 2011 the Company had the following
      commitments:                                                                                                                             

| |                                                               |   | Total |  |   | 1 year |  |   | 2-3 years |  |   | 4-5 years | 
| | ------------------------------------------------------------- | - | ----- |  | - | ------ |  | - | --------- |  | - | --------- | 
| | Laboratory, equipment
      maintenance and drilling services | $ | 1,365 |  | $ | 1,202  |  | $ | 163       |  | $ | -         | 
| | Operating lease payments(1)                                   |   | 260   |  |   | 154    |  |   | 106       |  |   | -         | 
| | Equipment purchases with
      third party vendors(2)         |   | 2,396 |  |   | 2,396  |  |   | -         |  |   | -         | 
| | Environmental program(3)                                      |   | 69    |  |   | 69     |  |   | -         |  |   | -         | 
| | Consulting                                                    |   | 25    |  |   | 25     |  |   | -         |  |   | -         | 
| | Total commitments                                             | $ | 4,115 |  | $ | 3,846  |  | $ | 269       |  | $ | -         | 

| | (1) | Lease payments were recognized as an expense in the
      period.                                                                                                                                                                                    
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | The Company expects to fulfill these capital expenditure
      commitments in fiscal 2012.                                                                                                                                                           
| | (3) | On February 17, 2009, the Company committed to
      implementing an environmental program as a result of participating in a
      voluntary audit to ensure compliance with regulations governing the
      protection of the environment in Mexico.

|21. | Operating segments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The Companys operations are all within the mining
      sector, consisting of two operating segments both of which are located in
      Mexico and one corporate segment located in Canada. Due to diversities in
      geography and production processes, the Company operates the Guanajuato
      and Topia mines separately, with separate budgeting and evaluation of
      results of operations and exploration activities. The Corporate segment
      provides financial, human resources and technical support to the two
      mining operations. The Guanajuato operations produce silver and gold, and
      Topia operations produce silver, gold, lead and
      zinc.

2011Mexico
      
      
      CanadaGuanajuato
      
      
      Topia
      
      
      Other
      
      
      Corporate
      
      
      Total
      
      
      Corporate
      
      
      TotalExternal mineral sales
      $
      39,096
      
      $
      18,722
      
      $
      -
      
      $
      -
      
      $
      57,818
      
      $
      -
      
      $
      57,818Amortization and depletion
      
      3,270
      
      
      1,195
      
      
      -
      
      
      -
      
      
      4,465
      
      
      96
      
      
      4,561Share-based payments
      
      821
      
      
      141
      
      
      -
      
      
      67
      
      
      1,029
      
      
      1,181
      
      
      2,210Interest revenue
      
      -
      
      
      -
      
      
      -
      
      
      103
      
      
      103
      
      
      332
      
      
      435Finance costs
      
      29
      
      
      17
      
      
      -
      
      
      39
      
      
      85
      
      
      239
      
      
      324Income (loss) before income
      
      18,764
      
      
      7,634
      
      
      -
      
      
      (5,709
      )
      
      20,689
      
      
      (7,198
      )
      
      13,491taxesIncome (loss) for the year
      
      18,683
      
      
      7,607
      
      
      -
      
      
      (7,586
      )
      
      18,704
      
      
      (7,198
      )
      
      11,506Capital expenditures
      
      18,911
      
      
      4,428
      
      
      -
      
      
      -
      
      
      23,339
      
      
      61
      
      
      23,400Total assets
      $
      34,101
      
      $
      21,888
      
      $
      -
      
      $
      6,706
      
      $
      62,695
      
      $
      40,249
      
      $
      102,944


27

---

|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, 2011 and 2010           

|21. | Operating segments-
      continued
|--- | -----------------------------------

2010Mexico
      
      
      CanadaGuanajuato
      
      
      Topia
      
      
      Other
      
      
      Corporate
      
      
      Total
      
      
      Corporate
      
      
      TotalExternal mineral sales
      $
      27,983
      
      $
      14,223
      
      $
      -
      
      $
      -
      
      $
      42,206
      
      $
      -
      
      $
      42,206Amortization and depletion
      
      2,853
      
      
      1,264
      
      
      -
      
      
      -
      
      
      4,117
      
      
      52
      
      
      4,169Share-based payments
      
      444
      
      
      37
      
      
      -
      
      
      -
      
      
      481
      
      
      388
      
      
      869Interest revenue
      
      -
      
      
      -
      
      
      -
      
      
      37
      
      
      37
      
      
      78
      
      
      115Finance costs
      
      -
      
      
      -
      
      
      -
      
      
      215
      
      
      215
      
      
      939
      
      
      1,154Income (loss) before income
      
      4,472
      
      
      1,680
      
      
      (69
      )
      
      3,918
      
      
      10,001
      
      
      (1,424
      )
      
      8,577taxesIncome (loss) for the year
      
      4,472
      
      
      1,680
      
      
      (69
      )
      
      6,001
      
      
      12,084
      
      
      (1,424
      )
      
      10,660Capital expenditures
      
      10,799
      
      
      5,203
      
      
      -
      
      
      -
      
      
      16,002
      
      
      19
      
      
      16,021Total assets
      $
      19,441
      
      $
      15,500
      
      $
      -
      
      $
      5,638
      
      $
      40,579
      
      $
      14,872
      
      $
      55,451


Product Revenue

| |                              |   | 2011   |   |   | 2010   |  
| | ---------------------------- | - | ------ | - | - | ------ | -
| | Silver                       | $ | 46,165 |   | $ | 31,665 |  
| | Gold                         |   | 11,601 |   |   | 8,366  |  
| | Lead                         |   | 1,880  |   |   | 2,231  |  
| | Zinc                         |   | 1,900  |   |   | 1,612  |  
| | Copper                       |   | 6      |   |   | -      |  
| | Ore processing revenues      |   | 842    |   |   | 630    |  
| | Smelter and refining charges |   | (4,576 | ) |   | (2,298 | )
| |                              | $ | 57,818 |   | $ | 42,206 |  

For the years ended December 31, 2011
  and December 31, 2010, the Company had four customers that accounted for the
  majority total revenues as follows:

| | Customer        | Segment    |   | 2011   |  |   | 2010   | 
| | --------------- | ---------- | - | ------ |  | - | ------ | 
| | Customer A      | Guanajuato | $ | 17,152 |  | $ | -      | 
| | Customer B      | Guanajuato |   | 14,401 |  |   | 18,851 | 
| | Customer C      | Guanajuato |   | 4,078  |  |   | -      | 
| | Customer C      | Topia      |   | 18,659 |  |   | -      | 
| | Customer D      | Guanajuato |   | -      |  |   | 9,592  | 
| | Customer D      | Topia      |   | -      |  |   | 13,763 | 
| | Other customers |            |   | 3,528  |  |   | -      | 
| |                 |            | $ | 57,818 |  | $ | 42,206 | 

The trade accounts receivable balance
  of $11,180 at December 31, 2011 (2010  5,151) relates to three customers (note
  4).

28

---

|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, 2011 and 2010           

|22. | Transition to IFRS                                                                                                                                                                                                                                                                                                                                         
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                            
|    | An explanation of how the transition from Canadian GAAP
      to IFRS has affected the Companys financial position, financial
      performance and cash flow is set out in the following tables and the notes
      that accompany the tables.                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                            
|    | The accounting policies in note 3 have been applied in
      preparing the consolidated financial statements for the year ended
      December 31, 2011, the comparative information for the year ended December
      31, 2010 and the preparation of an opening IFRS statement of financial
      position on the transition date, being January 1, 2010.
|    |                                                                                                                                                                                                                                                                                                                                                            
|    | In preparing the consolidated financial statements for
      the year ended December 31, 2011, comparative information for the year
      ended December 31, 2010 have been adjusted from amounts reported
      previously in the financial statements prepared in accordance with
      GAAP.                                                            
|    |                                                                                                                                                                                                                                                                                                                                                            
|    | The guidance for the first time adoption of IFRS is set
      out in IFRS 1. IFRS 1 provides for certain mandatory exceptions and
      optional exemptions for first time adopters of IFRS. The Company elected
      to apply the following optional exemptions:                                                                                         

| |  | IFRS 3, Business Combinations,has not been
      applied to acquisitions of subsidiaries or of interests in associates and
      joint ventures that occurred before January 1, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | IFRS 2, Share-Based Payments, has not been applied
      to equity instruments granted after November 7, 2002 which had not vested
      as of the transition date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | The Company has applied the transitional provision in
      IFRIC 4, Determining whether an Arrangement contains a lease, and
      has assessed all arrangements as at the date of transition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | IFRIC 1, Changes in Existing Decommissioning,
      Restoration and Similar Liabilities, has not been applied to
      decommissioning liabilities included in mineral properties, plant and
      equipment that occurred before the Transition Date to IFRS. In accordance
      with this IFRS 1 optional exemption, decommissioning and restoration
      liabilities of the Company are measured at the Transition Date under IAS
      37, Provisions, Contingent Liabilities and Contingent Assets, and
      the amount to be included in the cost of the related asset is estimated by
      discounting the liabilities to the date at which the liabilities first
      arose. The Company did this using the best estimate of the historical
      discount rates that would have applied for that liability in the
      intervening period, and recalculating the accumulated depreciation using
      the depreciation policy adopted by the Company in accordance with IFRS.

29

---

|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, 2011 and 2010           

|22. | Transition to IFRS-
      continued
|--- | -----------------------------------

Reconciliation from Canadian GAAP to IFRS

|Reconciliation of assets, liabilities and equity
      as at January 1, 2010 |         |   |               |  
|---------------------------------------------------------------------------- | ------- | - | ------------- | -
|                                                                             | Note    |   | Canadian GAAP |  
|                                                                             |         |   |               |  
|Assets                                                                       |         |   |               |  
|Current assets:                                                              |         |   |               |  
|Cash and cash equivalents                                                    |         | $ | 13,312        |  
|Restricted cash                                                              |         |   | 23            |  
|Marketable securities                                                        |         |   | 5,539         |  
|Trade and other receivables                                                  |         |   | 342           |  
|Income taxes recoverable                                                     |         |   | 1,438         |  
|Inventories                                                                  |         |   | 1,585         |  
|Prepaid expenses, deposits and advances                                      |         |   | 22,239        |  
|                                                                             |         |   |               |  
|Non-current assets:                                                          |         |   |               |  
|Mineral properties,
      plant and equipment                                | a,b,c   |   | 14,935        |  
|Intangible assets                                                            | c       |   | -             |  
|                                                                             |         |   | 14,935        |  
|                                                                             |         | $ | 37,174        |  
|                                                                             |         |   |               |  
|Liabilities and Shareholders Equity                                         |         |   |               |  
|Current liabilities:                                                         |         |   |               |  
|Trade and other payables                                                     |         | $ | 2,631         |  
|Capital lease obligations                                                    |         |   | 801           |  
|Promissory notes                                                             |         |   | 122           |  
|Convertible loan notes                                                       | d       |   | -             |  
|Current tax liability                                                        |         |   | 27            |  
|Deferred tax liability                                                       | e       |   | 506           |  
|                                                                             |         |   | 4,087         |  
|Non-current liabilities:                                                     |         |   |               |  
|Capital lease obligations                                                    |         |   | 63            |  
|Promissory notes                                                             |         |   | 118           |  
|Convertible loan notes                                                       | d       |   | 3,356         |  
|Reclamation and remediation
      provision                                  | b       |   | 1,382         |  
|Deferred
      tax liability                                                 | e       |   | 1,312         |  
|                                                                             |         |   | 6,231         |  
|Shareholders equity:                                                        |         |   |               |  
|Share Capital                                                                |         |   | 75,910        |  
|Reserves                                                                     | a,b,d   |   | 11,808        |  
|Deficit                                                                      | a,b,d,e |   | (60,862       | )
|                                                                             |         |   | 26,856        |  
|                                                                             |         | $ | 37,174        |  

30

---

|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, 2011 and 2010           

|22. | Transition to IFRS-
      continued
|--- | -----------------------------------

|Reconciliation of Consolidated Statements of Financial
      Position as at December 31, 2010 |         |   |               |  
|--------------------------------------------------------------------------------------------- | ------- | - | ------------- | -
|                                                                                              | Note    |   | Canadian GAAP |  
|Assets                                                                                        |         |   |               |  
|Current assets:                                                                               |         |   |               |  
|Cash and cash equivalents                                                                     |         | $ | 13,967        |  
|Restricted cash                                                                               |         |   | 151           |  
|Marketable securities                                                                         |         |   | 200           |  
|Trade and other receivables                                                                   |         |   | 9,635         |  
|Income taxes recoverable                                                                      |         |   | 239           |  
|Inventories                                                                                   |         |   | 2,615         |  
|Prepaid
      expenses, deposits and advances                                                 |         |   | 1,240         |  
|                                                                                              |         |   | 28,047        |  
|Non-current assets:                                                                           |         |   |               |  
|Mineral properties, plant
      and equipment                                                 | a,b,c   |   | 17,538        |  
|Intangible
      assets                                                                       | c       |   | -             |  
|                                                                                              |         |   | 17,538        |  
|                                                                                              |         | $ | 45,585        |  
|                                                                                              |         |   |               |  
|Liabilities and Shareholders Equity                                                          |         |   |               |  
|Current liabilities:                                                                          |         |   |               |  
|Trade and other payables                                                                      |         | $ | 4,758         |  
|Capital lease obligations                                                                     |         |   | 369           |  
|Promissory notes                                                                              |         |   | 373           |  
|Convertible loan notes                                                                        | d       |   | 3,792         |  
|Current
      tax liability                                                                   |         |   | 19            |  
|                                                                                              |         |   | 9,311         |  
|Non-current liabilities:                                                                      |         |   |               |  
|Capital lease obligations                                                                     |         |   | 128           |  
|Promissory notes                                                                              |         |   | 77            |  
|Convertible loan notes                                                                        | d       |   | -             |  
|Reclamation
      and remediation provision                                                   | b       |   | 516           |  
|                                                                                              |         |   | 721           |  
|Shareholders equity:                                                                         |         |   |               |  
|Share Capital                                                                                 |         |   | 83,470        |  
|Reserves                                                                                      | a,b,d   |   | 7,975         |  
|Deficit                                                                                       | a,b,d,e |   | (55,892       | )
|                                                                                              |         |   | 35,553        |  
|                                                                                              |         | $ | 45,585        |  

31

---

|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, 2011 and 2010           

|22. | Transition to IFRS-
      continued
|--- | -----------------------------------

|Reconciliation of Consolidated Statements of Comprehensive
      Income for the year ended December 31, 2010 |       |   |               |  
|------------------------------------------------------------------------------------------------------------ | ----- | - | ------------- | -
|                                                                                                             | Note  |   | Canadian GAAP |  
|Revenue                                                                                                      |       | $ | 42,206        |  
|Cost of sales:                                                                                               |       |   |               |  
|Cost of sales                                                                                                |       |   | 21,161        |  
|Amortization and depletion                                                                                   | a,b   |   | 2,362         |  
|Share-based payments                                                                                         |       |   | 481           |  
|                                                                                                             |       |   | 24,004        |  
|Gross profit                                                                                                 |       |   | 18,202        |  
|                                                                                                             |       |   |               |  
|Expenses:                                                                                                    |       |   |               |  
|Amortization and depreciation                                                                                |       |   | 52            |  
|Accretion on reclamation
      and remediation provision                                                     | b     |   | 206           |  
|Mineral property exploration expenditures                                                                    | a     |   | 7,110         |  
|General and administrative                                                                                   |       |   | 5,858         |  
|Share-based payments                                                                                         |       |   | 388           |  
|                                                                                                             |       |   | 13,614        |  
|                                                                                                             |       |   | 4,588         |  
|Income (expenses):                                                                                           |       |   |               |  
|Interest income                                                                                              |       |   | 115           |  
|Interest expense                                                                                             | b     |   | (934          | )
|Finance costs                                                                                                | b,d   |   | -             |  
|Foreign exchange
      loss                                                                                  | b     |   | (373          | )
|Loss on disposal of capital assets                                                                           |       |   | (16           | )
|Loss on derivative instruments                                                                               |       |   | (147          | )
|                                                                                                             |       |   | (1,355        | )
|Income before income taxes                                                                                   |       |   | 3,233         |  
|                                                                                                             |       |   |               |  
|Income tax recovery (expense):                                                                               |       |   |               |  
|Current                                                                                                      |       |   | (113          | )
|Deferred                                                                                                     | e     |   | 1,850         |  
|Income for the
      period                                                                                  |       | $ | 4,970         |  
|                                                                                                             |       |   |               |  
|Other comprehensive income (loss), net of tax:                                                               |       |   |               |  
|Foreign currency
      translation                                                                           | a,b,e |   | (3,025        | )
|Change in fair value of available-for-sale financial assets                                                  |       |   | (10           | )
|Total comprehensive income for the year                                                                      |       | $ | 1,935         |  

32

---

|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, 2011 and 2010           

|22. | Transition to IFRS-
      continued
|--- | -----------------------------------

|Reconciliation of Consolidated Statements of Cash
      Flows for the year ended December 31, 2010 |       |   |               |  
|-------------------------------------------------------------------------------------------------- | ----- | - | ------------- | -
|                                                                                                   | Note  |   | Canadian GAAP |  
|                                                                                                   |       |   |               |  
|Cash flows from by operating activities:                                                           |       |   |               |  
|Income for the period                                                                              |       | $ | 4,970         |  
|Items not involving cash:                                                                          |       |   |               |  
|Amortization and depletion expenses                                                                | a,b   |   | 2,414         |  
|Unrealized foreign
      exchange (gains) losses                                                   | b     |   | 50            |  
|Deferred tax liability                                                                             | e     |   | (1,853        | )
|Accretion on reclamation
      and remediation provision                                           | b     |   | 206           |  
|Share-based payments                                                                               |       |   | 869           |  
|Interest accretion
      on convertible loan notes                                                 | d     |   | 436           |  
|Loss (gain) on disposal of capital
      assets                                                    |       |   | 138           |  
|Shares received for
      mineral property and capital expenditures                                |       |   | (23           | )
|                                                                                                   |       |   | 7,207         |  
|Changes in non-cash operating working capital:                                                     |       |   |               |  
|Trade and other receivables                                                                        |       |   | (4,263        | )
|Income taxes recoverable                                                                           |       |   | 112           |  
|Inventories                                                                                        |       |   | (1,086        | )
|Prepaid expenses,
      deposits and advances                                                      |       |   | 327           |  
|Trade and other payables, including
      derivatives                                              |       |   | 1,926         |  
|Current tax liability                                                                              |       |   | (8            | )
|Net cash provided by operating activities                                                          |       |   | 4,215         |  
|                                                                                                   |       |   |               |  
|Cash flows used in investing activities:                                                           |       |   |               |  
|Intangible assets                                                                                  |       |   | (25           | )
|Mineral properties and capital expenditures                                                        | a,b,c |   | (8,011        | )
|Proceeds from disposal
      of capital assets                                                     |       |   | 37            |  
|Restricted cash                                                                                    |       |   | (151          | )
|Net cash used in investing activities                                                              |       |   | (8,150        | )
|                                                                                                   |       |   |               |  
|Cash flows from financing activities:                                                              |       |   |               |  
|Repayment of capital lease obligations                                                             |       |   | (938          | )
|Repayment of promissory
      notes                                                                |       |   | (292          | )
|Proceeds from exercise of options                                                                  |       |   | 2,871         |  
|Proceeds from exercise
      of warrants                                                           |       |   | 3,054         |  
|Issuance of shares for cash, net of issue costs                                                    |       |   | (32           | )
|Net cash provided by financing activities                                                          |       |   | 4,663         |  
|Effect of foreign
      currency translation on cash                                               |       |   | (73           | )
|Increase in cash and cash equivalents                                                              |       |   | 655           |  
|Cash and cash
      equivalents, beginning of period                                               |       |   | 13,312        |  
|Cash and cash equivalent, end of period                                                            |       | $ | 13,967        |  

33

---

|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, 2011 and 2010           

|22. | Transition to IFRS- continued
|--- | -----------------------------
|    |                              
|    | Notes to the reconciliations 
|    |                              
|    | (a)                          
|    |                              
|    |                              
|    |                              
|    | (b)                          
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    | (c)                          
|    |                              
|    |                              
|    |                              
|    | (d)                          
|    |                              
|    |                              

34

---

|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, 2011 and 2010           

|22. | Transition to IFRS- continued
|--- | -----------------------------
|    |                              
|    | (e)                          
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              

|    | Material adjustments to the Statement of Cash Flows
      for 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Consistent with the Companys accounting policy choice,
      as discussed in note 22(a), capitalized mine evaluation costs have been
      reclassified from operating to investing activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|23. | Changes in accounting standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Presentation of items of other comprehensive income
      (OCI)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | IAS 1 is amended to change the disclosure of items
      presented in OCI, including a requirement to separate items presented in
      OCI into two groups based on whether or not they may be recycled to profit
      or loss in the future. This amendment is effective for annual periods
      beginning on or after July 1, 2012. The Company is currently evaluating
      the impact the final standard is expected to have on its consolidated
      financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | The IASB intends to replace IAS 39 Financial Instruments:
      Recognition and Measurement (IAS 39) in its entirety with IFRS 9
      Financial Instruments (IFRS 9) in three main phases. IFRS 9 will be the
      new standard for the financial reporting of financial instruments that is
      principles-based and less complex than IAS 39, and is effective for annual
      periods beginning on or after January 1, 2015, with earlier adoption
      permitted. IFRS 9 requires that all financial assets be classified as
      subsequently measured at amortized cost or at fair value based on the
      Companys business model for managing financial assets and the contractual
      cash flow characteristics of the financial assets. Financial liabilities
      are classified as subsequently measured at amortized cost except for
      financial liabilities classified as at fair value through profit or loss,
      financial guarantees and certain other exceptions.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | In December 2011, the IASB amended the IFRS 7 (Financial
      Instruments: Disclosures) requiring additional disclosures on offsetting
      of financial assets and financial liabilities. This amendment is effective
      for annual periods beginning on or after January 1, 2013. This standard
      also requires additional disclosures about the initial application of IFRS
      9. This amendment is effective for annual periods beginning on or after
      January 1, 2015 (or otherwise when IFRS 9 is first applied). IAS 32
      (Financial Instruments: Presentation) was amended in December 2011
      relating to application guidance on the offsetting of financial assets and
      financial liabilities. This standard is effective for annual periods
      beginning on or after January 1, 2014.                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | The Company is currently evaluating the impact these
      standards are expected to have on its consolidated financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

35

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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, 2011 and 2010           

|23. | Changes in accounting standards-
      continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | IFRS 10 Consolidated Financial Statements establishes
      principles for the presentation and preparation of consolidated financial
      statements when an entity controls one or more other entities. This
      standard (i) requires a parent entity (an entity that controls one or more
      other entities) to present consolidated financial statements; (ii) defines
      the principle of control, and establishes control as the basis for
      consolidation; (iii) sets out how to apply the principle of control to
      identify whether an investor controls an investee and therefore must
      consolidate the investee; and (iv) sets out the accounting requirements
      for the preparation of consolidated financial statements. IFRS 10
      supersedes IAS 27 Consolidated and Separate Financial Statements and
      SIC-12 Consolidation  Special Purpose Entities and is effective for
      annual periods beginning on or after January 1, 2013, with early
      application permitted. IAS 27 and IAS 28  Investments in Associates were
      revised and reissued as IAS 27  Separate Financial Statements and IAS 28
       Investments in Associates and Joint Ventures to align with the new
      consolidation guidance. The Company is currently evaluating the impact the
      final standard is expected to have on its consolidated financial
      statements.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Joint Arrangements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | IFRS 11 Joint Arrangements establishes the core principle
      that a party to a joint arrangement determines the type of joint
      arrangement in which it is involved by assessing its rights and
      obligations and accounts for those rights and obligations in accordance
      with that type of joint arrangement. This standard is effective for annual
      periods beginning on or after January 1, 2013, with early application
      permitted. The Company is currently evaluating the impact the final
      standard is expected to have on its consolidated financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Disclosure of Involvement with Other
      Entities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | IFRS 12 Disclosure of Involvement with Other Entities
      requires the disclosure of information that enables users of financial
      statements to evaluate the nature of, and risks associated with, its
      interests in other entities and the effects of those interests on its
      financial position, financial performance and cash flows. This standard is
      effective for annual periods beginning on or after January 1, 2013, with
      early application permitted. The Company is currently evaluating the
      impact the final standard is expected to have on its consolidated
      financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Fair Value Measurement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | IFRS 13 Fair Value Measurement defines fair value, sets
      out in a single IFRS a framework for measuring fair value and requires
      disclosures about fair value measurements. IFRS 13 applies when another
      IFRS requires or permits fair value measurements or disclosures about fair
      value measurements (and measurements, such as fair value less costs to
      sell, based on fair value or disclosures about those measurements), except
      for: share-based payment transactions within the scope of IFRS 2
      Share-based Payment; leasing transactions within the scope of IAS 17
      Leases; measurements that have some similarities to fair value but that
      are not fair value, such as net realizable value in IAS 2 Inventories or
      value in use in IAS 36 Impairment of Assets. This standard is effective
      for annual periods beginning on or after January 1, 2013, with early
      application permitted. The Company is currently evaluating the impact the
      final standard is expected to have on its consolidated financial
      statements.                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | IAS 12 was amended in December 2010 to remove
      subjectivity in determining on which basis an entity measures the deferred
      tax relating to an asset. The amendment introduces a presumption that an
      entity will assess whether the carrying value of an asset will be
      recovered through the sale of the asset. The amendment to IAS 12 is
      effective for reporting periods beginning on or after January 1, 2012. The
      Company is assessing the effect of the changes to IAS 12 on its financial
      results and financial position.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Stripping Costs in the Production Phase of a
      Mine                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | In October of 2011, the IASB issued IFRIC 20  Stripping
      Costs in the Production Phase of a Mine, which clarifies the requirements
      for accounting for costs of stripping activities in the production phase
      when two benefits accrue: (1) usable ore that can be used to produce
      concentrate inventory and (2) improved access to further quantities of
      material that will be mined in future periods. IFRIC 20 is effective for
      annual reporting periods beginning on or after January 1, 2013 with
      earlier application permitted and includes guidance on transition for
      pre-existing stripping costs. The Company is currently evaluating the
      impact IFRIC 20 is expected to have on its consolidated financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

36

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