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Great Panther Silver Limited

Annual Information Form

For the Year Ended December 31, 2012

March 13, 2013

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Table of Contents

|PRELIMINARY
      NOTES                                                         | 4 
|------------------------------------------------------------------------------- | --
|DATE
      OF INFORMATION                                                       | 4 
|NOMENCLATURE                                                                    | 4 
|CAUTIONARY
      NOTE REGARDING FORWARD-LOOKING STATEMENTS                      | 4 
|FINANCIAL
      INFORMATION                                                     | 5 
|CURRENCY                                                                        | 6 
|CAUTIONARY
      NOTES TO US INVESTORS REGARDING RESOURCE AND RESERVE ESTIMATES | 6 
|GLOSSARY
      OF TERMS                                                         | 8 
|CORPORATE
      STRUCTURE                                                       | 11
|NAME,
      ADDRESS AND INCORPORATION                                           | 11
|INTERCORPORATE
      RELATIONSHIPS                                              | 11
|GENERAL
      DEVELOPMENT OF GREAT PANTHER                                      | 12
|HISTORY                                                                         | 12
|THREE-YEAR
      HISTORY                                                        | 13
|DESCRIPTION
      OF THE BUSINESS                                               | 15
|GENERAL                                                                         | 15
|RISK
      FACTORS                                                              | 15
|PRINCIPAL
      MARKETS FOR SILVER                                              | 27
|PRODUCT
      MARKETING, SALES AND DISTRIBUTION                                 | 27
|SPECIALIZED
      SKILL AND KNOWLEDGE                                           | 28
|EMPLOYEES                                                                       | 29
|COMPETITIVE
      CONDITIONS                                                    | 29
|GOVERNMENT
      REGULATIONS                                                    | 29
|ENVIRONMENTAL
      PROTECTION                                                  | 30
|PRIMARY
      MINING PROPERTIES                                                 | 30
|PRIMARY
      EXPLORATION PROPERTY                                              | 53
|DIVIDENDS                                                                       | 68
|DESCRIPTION
      OF CAPITAL STRUCTURE                                          | 68
|MARKET
      FOR SECURITIES                                                     | 69
|TRADING
      PRICE AND VOLUME                                                  | 69
|DIRECTORS
      AND OFFICERS                                                    | 70

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|CEASE
      TRADE ORDERS, BANKRUPTCIES, PENALTIES OR SANCTIONS   | 73
|---------------------------------------------------------------- | --
|CONFLICTS
      OF INTEREST                                      | 75
|AUDIT
      COMMITTEE INFORMATION                                | 75
|AUDIT
      COMMITTEE CHARTER                                    | 75
|COMPOSITION
      OF THE AUDIT COMMITTEE                         | 75
|RELEVANT
      EDUCATION AND EXPERIENCE                          | 75
|RELIANCE
      ON CERTAIN EXEMPTIONS                             | 76
|PRE-APPROVAL
      POLICY                                        | 77
|EXTERNAL
      AUDITOR SERVICE FEES                              | 77
|LEGAL
      PROCEEDINGS AND REGULATORY ACTIONS                   | 77
|INTEREST
      OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS | 78
|TRANSFER
      AGENTS AND REGISTRARS                             | 78
|MATERIAL
      CONTRACTS                                         | 78
|INTERESTS
      OF EXPERTS                                       | 78
|ADDITIONAL
      INFORMATION                                     | 79
|SCHEDULE
      A                                               | 1 

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4

PRELIMINARY NOTES

DATE OF INFORMATION

Unless otherwise identified, all information contained in this
Annual Information Form (AIF) is as at December 31, 2012.

NOMENCLATURE

In this AIF, unless the context otherwise dictates, Great
Panther or the Company refers to Great Panther Silver Limited (formerly Great
Panther Resources Limited), and its subsidiaries, Minera Mexicana el Rosario,
S.A. de C.V. (MMR), Metalicos de Durango, S.A. de C.V. (MDU), Minera de
Villa Seca, S.A. de C.V. (MVS), and Great Panther Silver Peru S.A.C.

Unless otherwise indicated, all dollar amounts referred to
herein are in Canadian dollars.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain of the statements and information in this AIF
constitute forward-looking information within the meaning of Canadian
securities laws. Forward-looking statements are often, but not always,
identified by the words anticipates, believes, expects, may, likely,
plans and similar words. Forward-looking statements reflect the Companys
current expectations and assumptions, and are subject to a number of known and
unknown risks, uncertainties and other factors which may cause the Companys
actual results, performance or achievements to be materially different from any
anticipated future results, performance or achievements expressed or implied by
the forward-looking statements.

In particular, this AIF includes forward-looking statements as
noted throughout the document. These relate to estimates, forecasts, and
statements as to managements expectations with respect to the future production
of silver, gold, lead and zinc; profit, operating costs and cash flow; sales
volume and selling prices of products; capital expenditures, plans and
expectations for the development of the Companys mines and projects; progress
in the development of mineral properties; the timing of production and the cash
and total costs of production; sensitivity of earnings to changes in commodity
prices and exchange rates; the impact of foreign currency exchange rates; and
the future plans and expectations for the Companys properties and
operations.

These forward-looking statements are necessarily based on a
number of factors and assumptions that, while considered reasonable by the
Company as of the date of such statements, are inherently subject to significant
business, economic and competitive uncertainties and contingencies. These
assumption made by the Company in preparing the forward looking information
contained in this AIF, which may prove to be incorrect, include, but are not
limited to, general business and economic conditions; the supply and demand for,
deliveries of, and the level and volatility of prices of, silver, gold, lead and
zinc; expected Canadian dollar, Mexican peso and US dollar exchange rates; the
timing of the receipt of regulatory and governmental approvals for development
projects and other operations; costs of production and production and
productivity levels; estimated future capital expenditures and cash flows; the
continuing availability of water and power resources for operations; the
accuracy of the interpretation and assumptions used in calculating reserve and
resource estimates (including with respect to size, grade and recoverability); the accuracy of the information included or
implied in the various independently produced and published technical reports;
the geological, operational and price assumptions on which these technical
reports are based; conditions in the financial markets; the ability to attract
and retain skilled staff; the ability to procure equipment and operating
supplies and that there are no material unanticipated variations in the cost of
energy or supplies; the ability to secure contracts for the sale of the
Companys products (metals concentrates); the execution and outcome of current
or future exploration activities; the ability to obtain adequate financing for
planned activities and to complete further exploration programs; the Companys
ability to maintain adequate internal control over financial reporting; the
ability of contractors to perform their contractual obligations; and operations
not being disrupted by issues such as mechanical failures, labour disturbances
and adverse weather conditions.

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Forward-looking statements or information are statements about
the future and are inherently uncertain, and actual achievements of the Company
or other future events or conditions may differ materially from those reflected
in the forward-looking statements or information due to a variety of risks,
uncertainties and other factors, including, without limitation, changes in
commodity prices; changes in foreign currency exchange rates; acts of foreign
governments; political risk and social unrest; uncertainties related to title to
the Companys mineral properties and the surface rights thereon, including the
Companys ability to acquire, or economically acquire, the surface rights to
certain of the Companys exploration and development projects; unanticipated
operational difficulties due to adverse weather conditions, failure of plant or
mine equipment and unanticipated events related to health, safety, and
environmental matters; failure of counterparties to perform their contractual
obligations; and deterioration of general economic conditions. This list is not
exhaustive of the factors that may affect any of the Companys forward-looking
statements or information.

Readers are advised to carefully review and consider the risk
factors identified in this AIF under the heading Risk Factors for a discussion
of the factors that could cause the Companys actual results, performance and
achievements to be materially different from any anticipated future results,
performance or achievements expressed or implied by the forward-looking
statements. Readers are further cautioned that the foregoing list of assumptions
and risk factors is not exhaustive and it is recommended that prospective
investors consult the more complete discussion of the Companys business,
financial condition and prospects that is included in this AIF.

The Companys forward-looking statements and information are
based on the assumptions, beliefs, expectations and opinions of management as of
the date of this AIF, and other than as required by applicable securities laws,
and to the extent required by applicable securities laws, the Company does not
assume any obligation to update forward-looking statements and information.
Accordingly, readers should not place undue reliance on forward-looking
statements. The forward-looking statements contained herein are expressly
qualified by this cautionary statement.

FINANCIAL INFORMATION

The Company prepares its financial statements in accordance
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), and they
are subject to Canadian auditing and auditor independence standards. IFRS
differs in some respects from United States generally accepted accounting
principles, (U.S. GAAP) or (United States GAAP), and thus the Companys financial statements may not be comparable
to financial statements of United States companies.

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Financial information for the Company for periods commencing on
or after January 1, 2010 is reported in accordance with IFRS.

CURRENCY

The Companys financial statements use Canadian dollars as the
reporting currency. Financial and operating information presented in this AIF is
presented in Canadian dollars unless otherwise noted.

CAUTIONARY NOTES TO US INVESTORS REGARDING RESOURCE AND
RESERVE ESTIMATES

Certain terms contained in this AIF have been prepared in
accordance with the requirements of the securities laws in effect in Canada,
which differ from the requirements of United States securities laws. The terms
mineral reserve, proven mineral reserve and probable mineral reserve are
Canadian mining terms as defined in accordance with Canadian National Instrument
43-101  Standards of Disclosure for Mineral Projects (NI 43-101) and the
Canadian Institute of Mining, Metallurgy and Petroleum (the CIM) - CIM
Definition Standards on Mineral Resources and Mineral Reserves, adopted by the
CIM Council, as amended. These definitions differ from the definitions in SEC
Industry Guide 7 under the United States Securities Exchange Act of 1934, as
amended. Under SEC Industry Guide 7 standards, mineralization may not be
classified as a reserve unless the determination has been made that the
mineralization could be economically and legally produced or extracted at the
time the reserve determination is made. Among other things, all necessary
permits would be required to be in hand or issuance imminent in order to
classify mineralized material as reserves under the SEC standards. Under SEC
Industry Guide 7 standards, a final or bankable feasibility study is
required to report reserves, the three-year historical average price is used in
any reserve or cash flow analysis to designate reserves and the primary
environmental analysis or report must be filed with the appropriate governmental
authority.

In addition, the terms mineral resource, measured mineral
resource, indicated mineral resource and inferred mineral resource are
defined in and required to be disclosed by NI 43-101; however, these terms are
not defined terms under SEC Industry Guide 7 and are normally not permitted to
be used in reports and registration statements filed with the SEC. Investors are
cautioned not to assume that any part or all of mineral deposits in these
categories will ever be converted into reserves. Inferred mineral resources
have a great amount of uncertainty as to their existence, and great uncertainty
as to their economic and legal feasibility. It cannot be assumed that all or any
part of an inferred mineral resource will ever be upgraded to a higher category.
Under Canadian rules, estimates of inferred mineral resources may not form the
basis of feasibility or pre-feasibility studies, except in rare cases. Investors
are cautioned not to assume that all or any part of an inferred mineral resource
exists or is economically or legally mineable. Disclosure of contained ounces
in a resource is permitted disclosure under Canadian regulations; however, the
SEC normally only permits issuers to report mineralization that does not
constitute reserves by SEC Industry Guide 7 standards as in place tonnage and
grade without reference to unit measures.

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Accordingly, information contained in this AIF and the
documents incorporated by reference herein contain descriptions of the Companys
mineral deposits that may not be comparable to similar information made public
by U.S. companies subject to the reporting and disclosure requirements under the
United States federal securities laws and the rules and regulations
thereunder.

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GLOSSARY OF TERMS

The following glossary, which is not exhaustive, should be used
only as an adjunct to a thorough reading of the entire document of which it
forms a part.

adit: A horizontal or close-to-horizontal tunnel,
man-made for mining purposes.

Ag: The chemical symbol for silver on the
  Periodic Table.

andesite: A fine-grained brown or greyish intermediate
  volcanic rock.

Au: The chemical symbol for gold on the Periodic
Table.

breccia: A course-grained rock, composed of angular,
broken rock fragments held together by a mineral cement or a fine-grained
matrix.

chloritization: A form of alteration of a rock involving
the replacement by, conversion into, or introduction of chloride.

crosscuts: Mine openings or passageways that intersect a
vein or ore bearing structure at an angle.

epithermal: Applied to hydrothermal deposits formed at
low temperature and pressure.

Feasibility Study: A detailed study of a deposit in
which all geological, engineering, operating, economic and other relevant
factors are engineered in sufficient detail that it could reasonably serve as
the basis for a final decision by a financial institution to finance the
development of the deposit for mineral production.

felsic: Applied to an igneous rock having abundant
light-coloured materials.

hectare: A metric unit of land measure equal to 10,000
square metres or 2.471 acres.

hydrothermal: Relating to hot fluids circulating in the
earth's crust.

Indicated Mineral Resource:As defined by the Canadian
Institute of Mining, Metallurgy, and Petroleum, an Indicated Mineral Resource is
part of a Mineral Resource for which quantity, grade or quality, densities,
shape, and physical characteristics, can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and economic
parameters, to support mine planning and evaluation of the economic viability of
the deposit. The estimate is based on detailed and reliable exploration and
testing information gathered through appropriate techniques from locations such
as outcrops, trenches, pits, workings, and drill holes that are spaced closely
enough for geological and grade continuity to be reasonably assumed. (Source:
Canadian Institute of Mining, Metallurgy, and Petroleum, and was adopted August
20, 2000.)

Inferred Mineral Resource:As defined by the Canadian
Institute of Mining, Metallurgy, and Petroleum, an Inferred Mineral Resource is
that part of a Mineral Resource for which quantity and grade or quality can be
estimated on the basis of geological evidence and limited sampling and
reasonably assumed, but not verified, geological and grade continuity. The
estimate is based on limited information and sampling gathered through
appropriate techniques from locations such as outcrops, trenches, pits,
workings, and drill holes. (Source: Canadian Institute of Mining, Metallurgy,
and Petroleum, and was adopted August 20, 2000.)

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MASL: Metres above sea level.

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

mineral: An inorganic substance having usually a
definite chemical composition and, if formed under favourable conditions, having
a certain characteristic atomic structure which is expressed in its crystalline
form and other physical properties.

Mineral Resource:As defined by the Canadian Institute
of Mining, Metallurgy, and Petroleum, a Mineral Resource is a concentration or
occurrence of natural, solid, inorganic, or fossilized organic material in or on
the Earths crust in such form and quantity and of such a grade or quality that
it has reasonable prospects for economic extraction. The location, quantity,
grade geological characteristics and continuity of a Mineral Resource are known,
estimated or interpreted from specific geological evidence and knowledge.

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

mineral claim: The portion of mining ground held under
law by a claimant.

mineralization: Implication that the rocks contain
sulphide minerals and that these could be related to ore.

ore: That part of a mineral deposit which could be
economically and legally extracted.

Pb: The chemical symbol for lead on the Periodic
Table.

Preliminary Feasibility Study: A comprehensive study of
the viability of a mineral project that has advanced to a stage where the mining
method, in the case of underground mining, or the pit configuration, in the case
of an open pit, has been established and an effective method of mineral
processing has been determined, and includes a financial analysis based on
reasonable assumptions of technical, engineering, legal, operating, economic,
social, and environmental factors and the evaluation of other relevant factors
which are sufficient for a Qualified Person, acting reasonably,
to determine if all or part of the Mineral Resource may be classified as a
Mineral Reserve.

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Probable Mineral Reserve:As defined by the Canadian
Institute of Mining, Metallurgy, and Petroleum, a Probable Mineral Reserve is
the economically mineable part of an Indicated, and in some circumstances a
Measured, Mineral Resource demonstrated by at least a Preliminary Feasibility
Study. This Study must include adequate information on mining, processing,
metallurgical, economic, and other relevant factors that demonstrate, at the
time of reporting, that economic extraction can be justified.

Proven Mineral Reserve:As defined by the Canadian
Institute of Mining, Metallurgy, and Petroleum, a Proven Mineral Reserve, is the
economically mineable part of a Measured Mineral Resource demonstrated by at
least a Preliminary Feasibility Study. This Study must include adequate
information on mining, processing, metallurgical, economic, and other relevant
factors that demonstrate, at the time of reporting, that economic extraction is
justified.

quartz: A common rock forming mineral consisting of
silicon and oxygen.

rhyolite: A fine-grained volcanic (intrusive) rock of
granitic composition.

sulfidation: The reaction of a metal or alloy with a
sulfur-containing species to produce a sulfur compound that forms on or beneath
the surface of the metal or alloy.

stockwork: A metalliferous deposit characterized by the
impregnation of the mass of rock with many small veins or nests irregularly
grouped.

tpd: Metric tonne per day.

vein: A zone or belt of mineralized rock lying within
boundaries clearly separating it from neighbouring rock. A mineralized zone has,
more or less, a regular development in length, width and depth to give it a
tabular form and is commonly inclined at a considerable angle to the horizontal.
The term "lode" is commonly used synonymously for vein.

Zn: The chemical symbol for zinc on the Periodic
Table.

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CORPORATE STRUCTURE

NAME, ADDRESS AND INCORPORATION

The Company was originally incorporated under the Company
Act(British Columbia) in 1965 under the name Lodestar Mines Ltd. Since that
time, the Company has had the following name changes:

- in 1980, to Lodestar Energy Inc.
- in 1985, to Controlled Environmental Farming International Ltd.
- in 1987, to International Controlled Investments Inc.
- in 1991, to New Age Ventures Inc.
- in January 1998, to Great Panther Inc.
- in October 2003, to Great Panther Resources Limited
- on January 1, 2010, to Great Panther Silver Limited

On March 22, 1996 the Company was continued under the
Business Corporation Act(Yukon). On July 9, 2004, the Company was
continued to British Columbia under the Business Corporations Act(British Columbia).

The articles of the Company were amended on June 28, 2012 to
provide for and facilitate the electronic delivery and receipt of notices,
statements, reports or other records to shareholders.

Great Panthers principal and registered offices are located at
8thFloor, 333 Seymour Street, Vancouver, British Columbia, V6B 5A6,
Canada. The Companys telephone number is 604-608-1766, and facsimile number is
604-608-1768.

INTERCORPORATE RELATIONSHIPS

The Companys financial statements consolidate the accounts of
all of its subsidiaries. The Companys subsidiaries as at the date of this AIF
are listed below. All of the following companies are 100% beneficially owned,
directly or indirectly, by the Company.

Company Name
    Jurisdiction of
      Incorporation/Formation/ContinuationMinera
      Mexicana el Rosario, S.A. de C.V. Metálicos de Durango,
      S.A. de C.V. Minera de Villa Seca, S.A. de C.V.
      Great Panther Silver Peru S.A.C.
    Mexico Mexico Mexico Peru


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GENERAL DEVELOPMENT OF GREAT PANTHER

HISTORY

General

Great Panther Silver Limited was originally incorporated under
the Company Act (British Columbia) in 1965 under the name Lodestar Mines Ltd. On
June 18, 1980, the Companys common shares were listed on the TSX Venture
Exchange and, on November 14, 2006, the Companys common shares began trading on
the Toronto Stock Exchange (TSX) under the symbol GPR. On February 8, 2011,
the Companys common shares were listed on the NYSE Amex Equities Exchange (now
the NYSE MKT) under the trading symbol GPL. The Company has retained its
listing on the TSX in Canada.

Topia Mine

Effective February 18, 2004, the Company entered into the Topia
Option Agreement, which granted it the right and option, for a term of one year,
to purchase 100% of the ownership rights in and to all the fixed assets,
machinery, equipment (includes the mill, buildings, offices, houses and quarters
for the workers) and Topia Mining Concessions located in the Municipality of
Topia, State of Durango, Mexico from Compañía Minera de Canelas y Topia, as
optionor, by making cash payments totalling US$1,737,084. In addition to the
payments to the optionor, the Company agreed to assume the debt encumbering the
property, totalling US$814,594 upon signing of the purchase agreement. The debt
owing was secured by the Topia Mine assets. The balance of the debt was
repayable out of production from concentrate sales as a 10% net smelter return
(NSR). After the debt was repaid, there was no further NSR. As of December 31,
2007, the remaining debt balance was fully paid and there were no outstanding
conditions to retain title to the property. The Company has surface rights for
the land on which the plant sits and mineral rights for the rest of the
property.

Guanajuato Mine Complex

On October 25, 2005, the Company signed a formal purchase
agreement with the Sociedad Cooperativa Minero Metalúrgica Santa Fe de
Guanajuato to purchase 100% of the ownership rights in a group of producing
silver-gold mines in the Guanajuato Mining District. The total purchase price
was US$7,250,000, which included 1,107 hectares in two main properties, the
1,200 tonne-per-day plant, workshops and administration facilities, complete
mining infrastructure, mining equipment, and certain surface rights. At December
31, 2005 the Company paid US$3,625,000. In 2006, the Company paid the remaining
balance of US$3,625,000.

On May 15, 2006, the Company announced the purchase of 3.88
hectares of real estate adjacent to the plant at the Guanajuato Mine Complex.
The land was purchased from the Sociedad Cooperativa Minero Metalúrgica Santa Fe
de Guanajuato, the same Cooperative from which the mines were purchased in 2006,
for a total of US$690,425. The decision to buy the extra land was taken in order
to facilitate any future expansion of the plant facilities and to protect the
plant site from any possible development nearby.

On December 27, 2007, the Company purchased an additional
0.2804 hectares of land immediately adjacent to the plant and below the tailings
dam at the Guanajuato Mine Complex. The land was purchased from the Sociedad
Cooperativa Minero Metalúrgica Santa Fe de Guanajuato for a total of US$320,530. The land was primarily purchased in order to
protect the area from any possible development.

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13

Other Properties

Effective February 11, 2004, the Company entered into the Santo
Nino Option Agreement, which granted it the right and option, for a period of
three years, to purchase 100% of the ownership rights in and to the Santo Nino
Mining Concession located in the Guadalupe y Calvo Mining District, State of
Chihuahua, Mexico from Mr. Alfredo Rodriguez Chávez, as optionor, by making
staged cash payments totalling US$165,000. All of the payments were made as of
December 31, 2007.

On February 2, 2007, the Company signed an option agreement
with Altair Ventures Inc. (Altair). Terms of the agreement allowed Altair to
acquire a 70% interest in the four mining claims named San Antonio, Iran,
Chirpa, and Santo Nino, by making staggered cash payments of US$200,000,
issuing a total of 200,000 Altair common shares to Great Panther and incurring a
minimum of US$1.0 million of exploration expenditures over a three-year period.

THREE-YEAR HISTORY

2010

On February 1, 2010, Altair forfeited its option as described
in the History section above. At that time, the Company had received cash of
US$60,000 and 200,000 shares of Altair and agreed to accept a further 1,117,866
common shares of Altair at a deemed issue price of $0.15 per share as full
payment of Altairs indebtedness to the Company at January 31, 2010. On December
21, 2010, the Company relinquished its rights to the San Antonio and Santo Nino
mining concessions and wrote down the $0.07 million carrying value of the
property.

2011

On February 8, 2011, the Companys common shares were listed on
the NYSE Amex Equities Exchange (now the NYSE MKT) under the trading symbol
GPL. The Company has retained its listing on the TSX in Canada under the
trading symbol GPR.

On April 12, 2011, the Company closed a bought deal financing
with a syndicate of underwriters led by Salman Partners Inc. and including CIBC,
Stonecap Securities Inc., Dundee Securities Ltd. and Stifel Nicolaus Canada Inc.
for gross proceeds of $24,150,000. The financing consisted of 5,750,000 common
shares issued at a price of $4.20 per share.

On July 18, 2011, the Company announced the acquisition of four
mining concessions, totalling 1,514 hectares, approximately 10 to 15 kilometres
northeast of Guanajuato (collectively called the Santa Rosa Project). The
concessions are located on the north-west extension of a system of multiple
northwest-southeastern trending parallel structures that could be part of the
La Sierra vein system. The La Sierra system is the most easterly of the three
structural systems in the prolific Guanajuato district along with the main Veta
Madre and the La Luz trends. Presently, the Company is mining on the Veta Madre
system at its Guanajuato Mine and exploring on the westerly La Luz system at the
San Ignacio project.

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14

The four concessions were purchased from Minera Blanca Alicia,
S.A. de C.V., a private Mexican company, for US$1.5 million with 50% payable on
signing of the purchase agreement and 50% on the registration of the contract
with the Direccion General de Minas (Mexico), which is now complete. A royalty
of 1.3% is payable from ore produced from the four concessions.

2012

On May 9, 2012, the Company announced the completion of two
Mineral Resource estimates for its Guanajuato Mine Complex and its San Ignacio
Project in Guanajuato, Mexico. As San Ignacio is a satellite of the Guanajuato
Mine Complex (20 kilometres by road), and any mineralization extracted from
there will be processed at the Cata Plant, the Mineral Resource is considered
part of the overall Guanajuato Operations. The new Measured and Indicated
Mineral Resource at the Guanajuato Mine contains 5,649,000 ounces of silver
equivalent (Ag eq oz). Inferred Mineral Resources are estimated at 2,503,000
Ag eq oz at the Guanajuato Mine and 6,894,000 Ag eq oz at San Ignacio. The new
resource replaces production from the Guanajuato Mine Complex during the prior
year and a half, and with the addition of San Ignacio almost doubles the overall
resource base for Great Panthers Guanajuato operations. The new estimate for
San Ignacio increases tonnage by 35%, silver content by 29%, gold content by 51%
and Ag eq oz by 53% over the previous estimate (refer to May 9, 2012 news
release and the corresponding technical reports filed on SEDAR dated June 25,
2012 and June 26, 2012).

On August 21, 2012, the Company announced it had signed a
definitive agreement for the purchase of a 100% interest in certain surface
rights on its wholly-owned San Ignacio Project in Guanajuato, Mexico. A total of
19.4 hectares has been purchased, thereby allowing sufficient space for access
to and construction of a portal for the development of a ramp, for waste dumps,
and for auxiliary infrastructure. With the acquisition of the surface rights,
the Company has proceeded with the application for permits required for the
underground development. Permitting is expected to be completed in the second
quarter of 2013 and construction of a new portal and ramp is expected to begin
shortly after the receipt of permits.

On September 5, 2012, the Company completed the purchase of a
100% interest in the El Horcon Silver-Gold Project (El Horcon) in Jalisco
State, Mexico for total cash consideration of US$1.6 million. El Horcon is a
past producing mine and covers 7,908 hectares in 17 contiguous mining
concessions and is located 60 kilometres northwest of the Companys Guanajuato
Mine Complex. Its location allows for the potential for it to become a satellite
mine for the Companys Guanajuato operations.

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

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15

DESCRIPTION OF THE BUSINESS

GENERAL

Great Panther Silver Limited is a primary silver mining and
exploration company listed on the Toronto Stock Exchange trading under the
symbol GPR, and on the NYSE MKT trading under the symbol GPL. The Companys
current activities are focused on the mining of precious metals from its two
wholly-owned operating mines in Mexico, Topia and Guanajuato, the development
stage San Ignacio Project as well as the exploration project El Horcon. The
Company is also pursuing additional mining opportunities within Latin America,
with the goal of adding to its portfolio of mineral properties. Great Panthers
mission is to become a leading primary silver producer by acquiring, developing
and profitably mining precious metals.

All of Great Panthers assets in Mexico are held through Minera
Mexicana el Rosario, S.A. de C.V. (MMR), a wholly-owned subsidiary acquired in
February 2004. In 2005, the Company incorporated Metálicos de Durango, S.A. de
C.V. (MDU) and Minera de Villa Seca, S.A. de C.V (MVS). These two operating
subsidiaries of the Company are responsible for the day-to-day affairs and
operations of the Topia and Guanajuato mines, respectively, through service
agreements with MMR.

The Company has two primary mining properties: (1) Topia Mine
and (2) Guanajuato Mine Complex. The Companys Topia Mine is located in the
Sierra Madre Mountains in the state of Durango in northern Mexico and produces
silver, gold, lead and zinc. The Guanajuato Mine Complex is located in the city
of Guanajuato, in central Mexico, approximately 380 kilometres north-west of
Mexico City, and produces silver and gold. Each mine has its own processing
facility with capacity to support future expansion.

Great Panthers development-stage property, the San Ignacio
Project, located approximately 20 kilometres by road from its Guanajuato
processing plant. The Company also owns two exploration stage properties: the
Santa Rosa Project which is located approximately 15 kilometres northeast of
Guanajuato, and the recently acquired El Horcon Project, located 60 kilometres
northwest of Guanajuato.

The method of production at the Topia Mine and Guanajuato Mine
consists of underground mining through cut and fill mechanized operations.
Extracted ore is trucked to on-site conventional processing plants which consist
of zinc and lead-silver flotation circuits.

RISK FACTORS

Factors Beyond the Companys Control

There are a number of factors beyond the Companys control.
These factors include, but are not limited to, changes in government regulation,
political changes, high levels of volatility in market prices, availability of
markets, availability of adequate transportation and smelting facilities,
availability of capital, environmental factors and catastrophic risks,
amendments to existing taxes and royalties. The factors and their effects cannot
be accurately predicted.

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Current Global Financial Conditions

In recent years, global financial markets have experienced
increased volatility and global financial conditions have been subject to
increased instability. These have had a profound impact on the global economy.
Many industries, including the mining sector, have been impacted by these market
conditions. Some of the key impacts of the recent financial market turmoil
include contraction in credit markets resulting in a widening of credit risk,
devaluations and high volatility in global equity, commodity, foreign exchange
and precious metal markets and a lack of market liquidity. Numerous financial
institutions have either gone into bankruptcy or have had to be rescued by
government authorities. Access to financing has been negatively impacted by
liquidity crises throughout the world. These factors may impact the ability of
the Company to obtain equity or debt financing and, if available, to obtain such
financing on terms favourable to the Company. If these increased levels of
volatility and market turmoil continue, the Companys operations and planned
growth could be adversely impacted and the trading price of the securities of
the Company may be adversely affected.

Uncertainty Regarding Resource Estimates

Only mineral resources have been determined for certain of the
Companys properties, and no estimate of reserves on any property has been
completed. Resource estimates are based on interpretation and assumptions and
may yield less mineral production under actual conditions than is currently
estimated. In making determinations about whether to advance any projects to
development, the Company must rely upon estimated calculations as to the mineral
reserves and grades of mineralization on its properties. Until ore is actually
mined and processed, mineral reserves and grades of mineralization must be
considered as estimates only. These estimates are imprecise and depend upon
geological interpretation and statistical inferences drawn from drilling and
sampling which may prove to be unreliable. The Company cannot assure that:

- Resource or other mineralization estimates will be accurate; or
- Mineralization can be mined or processed profitably.

Any material changes in mineral resource estimates and grades
of mineralization will affect the economic viability of placing a property into
production and a propertys return on capital. The Companys resource estimates
have been determined and valued based on assumed future prices, cut-off grades
and operating costs that may prove to be inaccurate. Extended declines in market
prices for silver, gold, zinc and lead may render portions of the Companys
mineralization uneconomic and result in reduced reported mineral reserves.

Any material reductions in estimates of mineralization, or of
the Companys ability to extract this mineralization, could have a material
adverse effect on the Companys results of operations or financial condition.
The Company cannot assure that mineral recovery rates achieved in small scale
tests will be duplicated in large scale tests under on-site conditions or in
production scale.

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Mining and Mineral Exploration Have Substantial Operational
Risks

Mining and mineral exploration involves many risks, which even
a combination of experience, knowledge and careful evaluation may not be able to
overcome. These risks include:

- major or catastrophic equipment failures;
- mine failures and slope failures;
- ground fall and cave-ins;
- deleterious elements materializing in the mined resources;
- environmental hazards;
- industrial accidents and explosions;
- encountering unusual or unexpected geological formations;
- labour shortages or strikes;
- civil disobedience and protests; and
- natural phenomena such as inclement weather conditions, floods, droughts,
  rock slides and earthquakes.

These occurrences could result in environmental damage and
liabilities, work stoppages and delayed production, increased production costs,
damage to, or destruction of, mineral properties or production facilities,
personal injury or death, asset write-downs, monetary losses and other
liabilities. The nature of these risks is such that liabilities could exceed
policy limits of the Companys insurance coverage, in which case the Company
could incur significant costs that could prevent profitable operations.

Political Risk and Government Regulations

The Companys mining, exploration and development activities
are in Mexico and are subject to national and local laws and regulations,
governing prospects, taxes, labour standards, occupational health, land use,
environmental protection, mine safety and others which currently or in the
future may have a substantial adverse impact on the Company. In order to comply
with applicable laws, the Company may be required to make capital expenditures
until a particular problem is remedied. Existing and possible future
environmental legislation, regulation and action could cause additional expense,
capital expenditures, restriction and delays in the activities of the Company,
the extent of which cannot be reasonably predicted. Violators may be required to
compensate those suffering loss or damage by reason of the Companys mining
activities and may be fined if convicted of an offence under such
legislation.

Mining and exploration activities in Mexico may be affected in
varying degrees by political instabilities and government regulations relating
to the mining industry. Any changes in regulations or shifts in political
conditions are beyond the Companys control and may adversely affect the
business. Operations may also be affected in varying degrees by government
regulations with respect to restrictions on production, price controls, export
controls, income taxes, expropriations of property, environmental legislation
and mine safety. The status of Mexico as a developing country may make it more
difficult for the Company to obtain any required financing for projects. The
effect of all these factors cannot be accurately predicted. Notwithstanding the
progress achieved in restructuring Mexican political institutions and
revitalizing its economy, the present administration, or any successor
government, may not be able to sustain the progress achieved. The Company does
not carry political risk insurance.

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18

Environmental and Health and Safety Risks

The Companys operations are subject to environmental
regulations promulgated by government agencies from time to time. There is no
assurance that environmental regulations will not change in a manner that could
have an adverse effect on the Companys financial condition, liquidity or
results of operations and a breach of any such regulation may result in the
imposition of fines and penalties.

Environmental legislation is constantly expanding and evolving
in ways that impose stricter standards and more rigorous enforcement, with
higher fines and more severe penalties for non-compliance, and increased
scrutiny of proposed projects. There is an increased level of responsibility for
companies, and trends towards criminal liability for officers and directors for
violations of environmental laws, whether inadvertent or not. The cost of
compliance with changes in governmental regulations has a potential to reduce
the profitability of the Companys operations.

The pursuit of commercial production of the Companys mineral
claims may be subject to an environmental review process under environmental
assessment legislation. Compliance with an environmental review process may be
costly and may delay commercial production. Furthermore, there is the
possibility that the Company would not be able to proceed with commercial
production upon completion of the environmental review process if government
authorities do not approve the proposed mine or if the costs of compliance with
government regulation adversely affect the commercial viability of the proposed
mine.

The development and operation of a mine involves significant
risks to personnel from accidents or catastrophes such as fires, explosions or
collapse. These risks could result in damage or destruction of mineral
properties, production facilities, personal injury, environmental damage, mining
delays, increased production costs, monetary losses and legal liability. The
Company may not be able to obtain insurance to cover these risks at economically
feasible premiums. Insurance against certain environmental risks, including
potential liability for pollution and other hazards as a result of the disposal
of waste products occurring from production, is not generally available to
companies within the mining industry. The Company may suffer a material adverse
effect on its business if the Company incurs losses related to any significant
events that are not covered by its insurance policies.

Safety is a priority for the Company in operating its mines.  A comprehensive safety program is in place at both mines and meetings with employees and contractors are held on a regular basis to reinforce standards and practices.  The Company also reviews its insurance coverage on an annual basis to maintain its adequacy and relevancy.

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Risks Which Cannot Be Insured

Great Panther maintains appropriate insurance for liability and
property damage; however, the Company may become subject to liability for
hazards that cannot be insured against, which if such liabilities arise, could
impact profitability and result in a decline in the value of the Companys
securities. The Companys operations may involve the use of dangerous and
hazardous substances. While extensive measures are taken to prevent discharges
of pollutants in the ground water and the environment, and it is anticipated
that the Company will maintain appropriate insurance for liability and property
damage in connection with its business, the Company may become subject to
liability for hazards that cannot be insured against or which the Company may
elect not to insure itself against due to high premium costs or other reasons.
In the course of mining and exploration of mineral properties, certain risks
and, in particular, unexpected or unusual geological operating conditions
including rock bursts, cave-ins, fires, flooding and earthquakes, may occur. It
is not always possible to fully insure against such risks and the Company may
decide not to take out insurance against such risks as a result of high premiums
or other reasons.

Risk of Secure Title or Property Interest

There can be no assurance that title to any property interest
acquired by the Company or any of its subsidiaries is secured. Although the
Company has taken reasonable precautions to ensure that legal title to its
properties is properly documented, there can be no assurance that its property
interests may not be challenged or impugned. Such property interests may be
subject to prior unregistered agreements or transfers or other land claims, and
title may be affected by undetected defects and adverse laws and
regulations.

In the jurisdictions in which the Company operates, legal
rights applicable to mining concessions are different and separate from legal
rights applicable to surface lands; accordingly, title holders of mining
concessions in such jurisdictions must agree with surface land owners on
compensation in respect of mining activities conducted on such land.

Commercialization Risk of Development and Exploration Stage
Properties and Ability to Acquire Additional Commercially Mineable Mineral
Rights

The Companys primary mineral properties, Topia and Guanajuato,
have been in the production stage for more than five years and are profitable;
however, the Companys San Ignacio property is in the development stage and its
Santa Rosa and El Horcon projects are in the exploration stage and the
commercial viability of these projects cannot be assured at this time.

Mineral exploration involves a high degree of risk. There is no
assurance that commercially viable quantities of ore will be discovered at the
Companys exploration sites, or that its exploration and development projects
will be brought into commercial production.

Most exploration projects do not result in the discovery of
commercially mineable ore deposits and no assurance can be given that any
anticipated level of recovery of ore reserves will be realized or that any
identified mineral deposit will ever qualify as a commercially mineable (or
viable) ore body which can be legally and economically exploited. Estimates of
reserves, resources, mineral deposits and production costs can also be affected by such factors as environmental
permitting regulations and requirements, weather, environmental factors,
unforeseen technical difficulties, unusual or unexpected geological formations
and work interruptions.

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20

Material changes in ore reserves, grades, stripping ratios or
recovery rates may affect the economic viability of any project. The Companys
future growth and productivity will depend, in part, on the ability to identify
and acquire additional commercially mineable mineral rights, and on the costs
and results of continued exploration and potential development programs. Mineral
exploration is highly speculative in nature and is frequently non-productive.
Substantial expenditures are required to:

- Establish ore reserves through drilling and metallurgical and other testing
  techniques;
- Determine metal content and metallurgical recovery processes to extract
  metal from the ore; and
- Construct, renovate or expand mining and processing facilities.

In addition, if ore is discovered, it would take several years
from the initial phases of exploration until production is possible. During this
time, the economic feasibility of production may change. As a result of these
uncertainties, there can be no assurance that the Company will successfully
acquire additional commercially mineable (or viable) mineral rights.

Metals and Mineral Prices Are Subject to Dramatic and
Unpredictable Fluctuations

The market price of precious metals and other minerals is
volatile and cannot be controlled. If the price of precious metals and other
minerals should drop significantly, the economic prospects of the Companys
operating mines and projects could be significantly reduced or rendered
uneconomic. There is no assurance that, even if commercial quantities of ore are
discovered, a profitable market may exist for the sale of same. Mineral prices
have fluctuated widely, particularly in recent years. The marketability of
minerals is also affected by numerous other factors beyond the control of the
Company, including government regulations relating to royalties, allowable
production and importing and exporting of minerals, the effect of which cannot
be accurately predicted.

The Company has not entered into any hedging arrangements for
silver prices and does not expect to do so for any period beyond 3 months. The
Company has entered into hedging contracts for its lead and zinc production and
may enter into such arrangements in the future. These contacts are derivative
financial instruments that are measured at fair value at each reporting period
with gains or losses recognized in net income in the period in which it
arises.

Fluctuation in Foreign Currency Exchange Rates

The Company maintains its bank accounts in Canadian dollars,
U.S. dollars and Mexican Pesos. The Company earns revenue in U.S. dollars and to
a lesser extent in Mexican Pesos while its costs are incurred in Canadian
dollars, U.S. dollars and Mexican Pesos. An appreciation in the Mexican Peso
and/or U.S. dollar against the Canadian dollar will increase the costs of
carrying on operations. A decrease in the U.S. dollar against the Canadian
dollar will reduce the Companys revenues as reported in Canadian dollars and
will also result in a loss to the Company to the extent that the Company holds
funds in U.S. dollars. Similarly, a decrease in the Mexican Peso
against the Canadian dollar will reduce the Companys revenues as reported in
Canadian dollars and will also result in a loss to the Company to the extent
that the Company holds funds in Mexican Pesos. The Company does not actively
manage its foreign exchange risk with hedging instruments.

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21

Dependency on Key Personnel

The Companys success and viability depends, in large part, on
its ability to attract and maintain qualified key management personnel.
Competition for such personnel is intense, and which may impact the ability to
attract and retain such personnel in Canada and Mexico. The Companys growth and
viability has depended, and will continue to depend, on the efforts of key
management personnel such as Robert A. Archer, Chief Executive Officer and
director; Martin Carsky, President; and Jim Zadra, Chief Financial Officer. The
loss of any key management personnel may have a material adverse effect on the
Company, its business and its financial position. The Company has contracts with
these employees but does not have key-man life insurance.

Conflicts of Interest of Directors and Officers

Certain of the Companys directors and officers may continue to
be involved in a wide range of business activities through their direct and
their indirect participation in corporations, partnerships or joint ventures,
some of which are in the same business as the Company. Situations may arise in
connection with potential acquisitions and investments where the other interests
of these directors and officers may conflict with the interests of the Company.
The directors and officers of the Company are required by law to act in the best
interests of the Company. They may have the same obligations to the other
companies and entities in respect of which they act as directors or officers.
The discharge by the directors and officers of their obligations to the Company
may result in a breach of their obligations to these other companies and
entities and, in certain circumstances, this could expose the Company to
liability to those companies and entities. Similarly, the discharge by the
directors and officers of their obligations to these other companies and
entities could result in a breach of their obligation to act in the best
interests of the Company. Such conflicting legal obligations may expose the
Company to liability to others and impair its ability to achieve its business
objectives.

Concentration of Customers

The Company sells refined concentrates containing silver, gold,
lead and zinc to metals traders and smelters. During the year-end December 31,
2012, four customers accounted for 96% of the Companys revenues. The Company
believes that a limited number of customers will continue to represent a
significant portion of its total revenue. Although the Company does not consider
itself economically dependent upon any single customer or combination of
customers due to the existence of other potential metals traders or smelters
capable of purchasing the Companys supply, there can be no assurance that the
Company will be able to maintain its current significant customers or secure
significant new customers on similar terms and this may have a material adverse
effect on the Companys business, financial condition, operating results and
cash flows.

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Acquisition Strategy

As part of Great Panthers business strategy, the Company has
made acquisitions in the past and continues to seek new acquisition
opportunities in Mexico and Latin America. The opportunities sought by the
company are operating mines and also exploration and development opportunities
with a primary focus on silver in Mexico. As a result, the Company may from time
to time acquire additional mineral properties or securities of issuers which
hold mineral properties. In pursuit of such opportunities, the Company may fail
to select appropriate acquisition candidates or negotiate acceptable
arrangements, including arrangements to finance acquisitions or integrate the
acquired businesses and their personnel into the Company, and may fail to assess
the value, strengths, weaknesses, contingent and other liabilities and potential
profitability of acquisition candidates or to achieve identified and anticipated
operating and financial synergies and may incur unanticipated costs, diversion
of management attention from existing businesses, the potential loss of the
Companys key employees or of those of the acquired business. The Company cannot
assure that it can complete any acquisition or business arrangement that it
pursues, or is pursuing, on favourable terms, or that any acquisitions or
business arrangements completed will ultimately benefit the Company.
Acquisitions may involve a number of special risks, circumstances or legal
liabilities. These and other risks related to acquiring and operating acquired
properties and companies could have a material adverse effect on the Companys
results of operations and financial condition. Further, to acquire properties
and companies, the Company may be required to use available cash, incur debt,
issue additional securities or a combination of any one or more of these. This
could affect the Companys future flexibility and ability to raise capital, to
operate, explore and develop its properties and could dilute existing
shareholders and decrease the price of the common shares of the Company. There
may be no right for the Companys shareholders to evaluate the merits or risks
of any future acquisition undertaken by the Company, except as required by
applicable laws and regulations.

Community Relations and Social License to Operate

The Companys relationship with the communities in which it
operates are critical to ensure the future success of its existing operations
and the construction and development of its projects. While the Companys
relationship with the communities in which it operates are strong, there is an
increasing level of public concern relating to the perceived effect of mining
activities on the environment and on communities impacted by such activities.
Certain non-governmental organizations (NGOs), some of which oppose
globalization and resource development, are often vocal critics of the mining
industry and its practices. Adverse publicity generated by such NGOs or others
related to extractive industries generally, or its operations specifically,
could have an adverse effect on the Companys reputation or financial condition
and may impact its relationship with the communities in which it operates. While
the Company believes that it operates in a socially responsible manner, there is
no guarantee that the Companys efforts in this respect will mitigate this
potential risk.

Volatility of Share Price

Trading prices of Great Panthers shares may fluctuate in
response to a number of factors, many of which are beyond the control of the
Company. In addition, the stock market in general, and the market for gold and
silver companies in particular, has experienced extreme price and volume
fluctuations that have often been unrelated or disproportionate to the operating
performance of such companies. These broad market and industry factors may adversely affect the market price of
the Companys shares, regardless of operating performance.

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23

In the past, following periods of volatility in the market
price of a companys securities, securities class-action litigation has often
been instituted. Such litigation, if instituted, could result in substantial
costs and a diversion of managements attention and resources.

Substantial Decommissioning and Reclamation Costs

The Company reviews and reassesses its reclamation obligations
at each of its mines based on updated mine life estimates, rehabilitation and
closure plans. At December 31, 2012, the Company recorded a liability of $2.4
million on its Statement of Financial Position for the estimated cost of future
reclamation and remediation associated with the expected retirement of its
mineral properties, plant, and equipment. The present value of these reclamation
liabilities may be subject to change based on managements current and future
estimates, changes in the remediation technology or changes to applicable laws
and regulations. Such changes will be recorded in the accounts of the Company as
they occur.

The costs of performing the decommissioning and reclamation
must be funded by the Companys operations. These costs can be significant and
are subject to change. The Company cannot predict what level of decommissioning
and reclamation may be required in the future by regulators. If the Company is
required to comply with significant additional regulations or if the actual cost
of future decommissioning and reclamation is significantly higher than current
estimates, this could have an adverse impact on the Companys future cash flows,
earnings, results of operations and financial condition.

Sufficiency of Current Capital and Ability to Obtain
Financing

The further exploitation, development and exploration of
mineral properties in which the Company holds interests or which the Company
acquires may depend upon its ability to obtain financing through equity
financing or debt financing, joint ventures or other means. There is no
assurance that the Company will be successful in obtaining required financing as
and when needed. Volatile precious metals markets may make it difficult or
impossible for the Company to obtain financing on favourable terms, or at
all.

As at December 31, 2012, the Company had $26 million of cash
and short term investments, and for the year ended December 31, 2012, the
Company generated positive cash-flow from operations. As a result of the
Companys ability to earn cash-flow from its ongoing operations, the Company
considers that it has sufficient capital to support its current operating
requirements provided it can continue to generate cash from its operations and
that the costs of its capital projects are not materially greater than the
Companys projections. There is a risk that commodity prices decline and that
the Company is unable to continue generating sufficient cash flow from
operations or that the Company requires significant additional cash to fund
expansions and potential acquisitions. Failure to obtain additional financing on
a timely basis may cause the Company to postpone acquisitions, major expansion,
development and exploration plans.

Officers and Directors Are Indemnified Against All Costs,
Charges and Expenses Incurred By Them

The Companys articles contain provisions limiting the
liability of its officers and directors for all acts, receipts, neglects or
defaults of themselves and all of the other officers or directors for any other
loss, damage or expense incurred by the Company which shall happen in
the execution of the duties of such officers or directors, as do indemnification
agreements between the directors and officers and the Company. Such limitations
on liability may reduce the likelihood of derivative litigation against the
Companys officers and directors and may discourage or deter shareholders from
suing the officers and directors based upon breaches of their duties to the
Company, though such an action, if successful, might otherwise benefit the
Company and its shareholders.

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Enforcement of Legal Actions or Suits

It may be difficult to enforce suits against the Company or its
directors and officers. The Company is organized and governed under the laws of
under the Business Corporations Actof British Columbia, Canada and is
headquartered in this jurisdiction. All of the Companys directors and officers
are residents of countries other than the United States and all of the Companys
assets are located outside of the United States. Consequently, it may be
difficult for United States investors to realize in the United States upon
judgments of United States courts predicated upon civil liabilities under the
United States Securities Exchange Act of 1934, as amended. There is substantial
doubt whether an original action could be brought successfully in Canada against
any of such persons predicated solely upon such civil liabilities.

Dilution of Shareholders Interests as a Result of Issuance
of Incentive Stock Options to Employees, Directors, Officers and
Consultants

The Company has granted, and in the future may grant, to
directors, officers, insiders, employees, and consultants options to purchase
common shares as non-cash incentives to those persons. Such options have been,
and may in future be, granted at exercise prices equal to market prices, or at
prices as allowable under the policies of the TSX. The issuance of additional
shares will cause existing shareholders to experience dilution of their
ownership interests.

Dilution of Shareholders Interests as a Result of Issuances
of Additional Shares

Depending on the outcome of the Companys exploration programs
and mining operations, the Company may issue additional shares to finance
additional programs and mining operations or to acquire additional properties.
In the event that the Company is required to issue additional shares or decides
to enter into joint ventures with other parties in order to raise financing
through the sale of equity securities, investors interests in the Company will
be diluted and investors may suffer dilution in their net book value per share
depending on the price at which such securities are sold. As at December 31,
2012, there are also outstanding common share purchase warrants and options
exercisable into 5,953,850 common shares which, if exercised, would represent
approximately 4% of the Companys issued and outstanding shares. If all of these
shares are exercised and issued, such issuance also will cause a reduction in
the proportionate ownership and voting power of all other shareholders. The
dilution may result in a decline in the market price of the Companys shares.

Trading of the Companys Shares May Be Restricted by the
SEC's Penny Stock Regulations Which May Limit a Stockholders Ability to Buy
and Sell the Shares.

The U.S. Securities and Exchange Commission has adopted
regulations which generally define penny stock to be any equity security that
has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain
exceptions. The Companys securities are covered by the penny stock rules, which
impose additional sales practice requirements on broker-dealers who sell to
persons other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
US$5 million or individuals with a net worth in excess of US$1.0 million
(excluding the value of the individuals principal residence) or annual income
exceeding US$200,000 or US$300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customer's
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade the Companys
securities.

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25

The Company Does Not Expect to Declare or Pay Any
Dividends.

The Company has not declared or paid any dividends on its
common stock since inception, and does not anticipate paying any such dividends
for the foreseeable future.

Credit and Counterparty Risk

Credit risk is the risk of financial loss if a customer or
counterparty fails to meet its contractual obligations. The Companys credit
risk relates primarily to cash and cash equivalents, trade receivables in the
ordinary course of business and value added tax refunds and other receivables.
The Company sells and receives payment upon delivery of its concentrates
primarily through three international organizations. These are generally large
and established organizations with good credit ratings. Payments of receivables
are scheduled, routine and received within ninety days of invoicing. At December
31, 2012 the Company had $12.3 million of trade receivables and $5.8 million of
value added tax refund receivables primarily due from the Mexico taxation
authorities.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to
meet its financial obligations as they arise. The Company has in place a
planning and budgeting process to help determine the funds required to support
the Companys normal operating requirements on an ongoing basis and its
expansion plans. As at December 31, 2012, the Company had net working capital
(current assets in excess of current liabilities) of $45 million and no
long-term debt. The Company believes it has sufficient cash to meet operating
requirements as they arise for at least the next 12 months, but there can be no
assurance that a sudden significant decrease in silver prices, or unforeseen
liability, or other matter affecting the operations of the business might arise which will have a material impact on the
Companys sufficiency of cash reserves to meet operating requirements.

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26

Internal Control over Financial Reporting

The Company documented and tested during its most recent fiscal
year its internal control procedures in order to satisfy the requirements of
Section 404 of the Sarbanes-Oxley Act (SOX). SOX requires an annual assessment
by management and an independent assessment by the Companys independent
auditors of the effectiveness of the Companys internal control over financial
reporting. For the year ended December 31, 2012, the Company qualified as an
emerging growth company under the United States Securities Exchange Act of
1934 and therefore is eligible to forego the requirements for independent
assessment of its internal control procedures under SOX. The Company has
undertaken an independent assessment of its internal control procedures under
SOX for the year ended December 31, 2012 by its independent auditors, but to the
extent it retains its emerging growth company status, may not do so in future
periods.

The Company may fail to achieve and maintain the adequacy of
its internal control over financial reporting as such standards are modified,
supplemented, or amended from time to time, and the Company may not be able to
ensure that it can conclude on an ongoing basis that it has effective internal
controls over financial reporting in accordance with Section 404 of SOX. The
Companys failure to satisfy the requirements of Section 404 of SOX on an
ongoing, timely basis could result in the loss of investor confidence in the
reliability of its financial statements, which in turn could harm the Companys
business and negatively impact the trading price of its common shares. In
addition, any failure to implement required new or improved controls, or
difficulties encountered in their implementation, could harm the Companys
operating results or cause it to fail to meet its reporting obligations. There
can be no assurance that the Company will be able to remediate material
weaknesses, if any, identified in future periods, or maintain all of the
controls necessary for continued compliance, and there can be no assurance that
the Company will be able to retain sufficient skilled finance and accounting
personnel, especially in light of the increased demand for such personnel among
publicly traded companies. Future acquisitions of companies may provide the
Company with challenges in implementing the required processes, procedures and
controls in its acquired operations. Acquired companies may not have disclosure
controls and procedures or internal control over financial reporting that are as
thorough or effective as those required by securities laws currently applicable
to the Company.

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

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27

PRINCIPAL MARKETS FOR SILVER

Silver is a precious metal and is traded as a commodity
primarily on the London Bullion Market (LBM) and Comex in New York. The LBM is
the global hub of Over-The-Counter trading in silver and is the metals main
physical market. Here, the buying and selling process generates a daily
reference price known as the fix. The Comex, in contrast, is a futures and
options exchange. Silver is quoted in US dollars per troy ounce.

The end markets for silver are comprised of three primary
categories: industrial use, investment, and silver jewelry and décor. Together,
these three categories represent more than 95% of annual silver demand. Silver
has a number of key and in some cases unique properties such as durability,
malleability, ductility, reflectivity, electrical conductivity, and
antibacterial, which makes it valuable in numerous industrial applications. The
applications include: circuit boards, electrical wiring, superconductors,
brazing and soldering, mirror and window coatings, electroplating, chemical
catalysts, pharmaceuticals, filtration systems, solar panels, batteries,
televisions, household appliances and automobiles. The unique properties of
silver also make it difficult to substitute the element in its industrial
applications.

The silver business is not expected to be seasonal and the
Companys mining and milling operations will be carried out year round. The
climate in Mexico allows mining and exploration activities to be conducted
throughout the year. Therefore, revenue and cost of sales generally do not
exhibit variations due to seasonality. The exceptions are periods of excessive
drought which may limit or defer processing. The dry season in Mexico generally
extends from October through April. The Company did experience water shortages
at its Topia operations in the second quarter of 2012 as a result of unusually
dry conditions which led the Company to limit processing and stockpile mined
ore. The stockpiled ore was subsequently processed in the second half of 2012 as
water shortages were alleviated. Revenue will vary based on the quantity of
metal production, metal prices and terms of sales agreements.

Great Panther mines ore which it processes in its plants to
produce various concentrates which contain silver, gold, lead and zinc. These
concentrates are then sold to metal traders or directly to smelters and refiners
which extract the metals from the concentrates. (See Product Marketing, Sales
and Distribution.)

The silver business is cyclical as smelting and refining
charges rise and fall depending upon the demand and supply of silver concentrate
in the market. In addition, the market prices of silver and gold have
historically fluctuated widely and are affected by numerous global factors
beyond the Companys control. A decline in such market prices may have an
adverse effect on revenues from the sale of minerals.

PRODUCT MARKETING, SALES AND DISTRIBUTION

The Company produces metals concentrate which contain silver,
gold, lead and zinc. The principal customers for the concentrates are smelters
in Mexico, Asia and Europe and also international traders. During the year-end
December 31, 2012, four customers accounted for 96% of the Companys
revenues.

There is a global market for metals concentrates and the
Company continues to seek new buyers for its concentrates. Great Panthers
senior management in Vancouver negotiates sales contracts for concentrate
produced by the Companys Mexican operations. Contracts with smelting and
refining companies as well as metals brokers and traders are entered into and
re-negotiated as required. Contracts are typically for a one year term with provisions for renewal. The Company reviews
and seeks to renegotiate the terms of its contracts each year to ensure it
receives the most competitive pricing and terms possible while not remaining
completely dependent on any single smelter, refiner or trader.

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28

The smelters and international traders charge the Company for
their refining and smelting services. Revenues reported by the Company are net
of these charges. The pricing for the contained metals in the concentrate is
typically the average of all the daily quoted market prices within a specific
month or agreed period of time.

The Company delivers its concentrates by truck and ship. As
concentrates can vary in terms of grade and quality from shipment to shipment,
the sales are subject to a final settlement process to adjust for any variances.
Final settlement takes place, on average, 75 days after physical transfer of the
concentrates. The Company receives a first payment between 10 and 15 days
(depending on the contract) of approximately 90% of the provisional value of the
shipment based on current spot prices for the contained metals. After the
physical transfer of the metal concentrate, a final payment or adjustment is
made on the date of final settlement.

In terms of contained metals in its concentrates, the Company
is primarily a silver producer with silver accounting for approximately 70% of
its revenues (net of treatment and refining charges).

In addition to these commercial sales, the Company also
purchases silver on the open market and sells the silver in the form of coins
and silver bullion products to retail purchasers directly over its corporate
e-commerce website. These sales are not included in the Companys reported
revenue, but are instead reported as finance and other income on the Companys
financial statements, net of costs of sale. Revenue from these retail purchasers
for the year ended December 31, 2012 was $222,999, which is less than 1% of the
Companys reported revenues.

The following table sets out revenue by product for each of the
last two financial years:

Year ended December 31, 2012
    Year ended December 31, 2011(in thousands)
    Guanajuato
    Topia
    Total
    Guanajuato
    Topia
    TotalSilver revenue
    $ 30,425
    $ 15,463
    $ 45,888
    $ 30,414
    $ 15,751
    $ 46,165Gold revenue
    16,709
    525
    17,234
    11,126
    474
    11,600Lead revenue
    -
    1,772
    1,772
    -
    1,880
    1,880Zinc revenue
    -
    2,109
    2,109
    -
    1,901
    1,901Ore processing revenue and other
    -
    701
    701
    -
    848
    848Treatment charges, refining charges and deductions
    (3,030)
    (3,535)
    (6,565)
    (2,444)
    (2,132)
    (4,576)Total Revenue
    $ 44,104
    $ 17,035
    $ 61,139
    $ 39,096
    $ 18,722
    $ 57,818


SPECIALIZED SKILL AND KNOWLEDGE

The Companys business requires specialized skills and
knowledge in the areas of geology, mining, metallurgy, social and environmental
studies, permitting, and finance.

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29

EMPLOYEES

At December 31, 2012, the Company employed 26 people at its
Vancouver head office and 310 people in Mexico. The Company also employed 781
contract personnel in Mexico in mining and maintenance activities.

The following table sets out the Companys employees at
December 31, 2012, December 31, 2011 and December 31, 2010, by legal entity.

|Company                                  | 2012 | 2011 | 2010
|---------------------------------------- | ---- | ---- | ----
|Great Panther Silver Limited             | 26   | 20   | 17  
|Minera Mexicana el Rosario, S.A. de C.V. | nil  | nil  | nil 
|Metálicos de Durango, S.A. de C.V.       | 175  | 153  | 109 
|Minera de Villa Seca, S.A. de C.V.       | 135  | 99   | 80  
|Great Panther Silver Perú S.A.C.         | nil  | nil  | nil 
|TOTAL                                    | 336  | 272  | 206 

The Company does not currently have a collective bargaining
arrangement with any labour union or association.

COMPETITIVE CONDITIONS

The Companys business is to sell metal concentrate and
by-product concentrate. Prices for its products are determined by world markets
over which it has no influence or control. The Company also competes with other
mining companies, some of which have greater financial resources and technical
facilities, for the acquisition of mineral interests, as well as for the
recruitment and retention of qualified employees.

GOVERNMENT REGULATIONS

The mining industry in Mexico is controlled by the Secretaria
de Economia  Dirección General de Minas which is located and administered from
Mexico City. Mining concessions in Mexico may only be obtained by Mexican
nationals or Mexican companies incorporated under Mexican laws. The construction
of processing plants requires further governmental approval.

The holder of a mining concession is granted the exclusive
right to explore and develop a designated area. Mining concessions are granted
for 50 years from the date of their registration with the Public Registry of
Mining to the concession holder as a matter of law if all regulations have been
complied with. During the final five years of this period, the concession holder
may apply for one additional 50 year period, which is automatically granted
provided all other concession terms had been complied with.

In accordance with the Federal Duties Law (LFD) the holder of
a mining concession is obligated to pay biannual duties in January and July of
each year based upon the number of hectares covered by the concession area.

Concessionaires must perform work each year that must begin
within ninety days of the concession being granted. Concessionaires must file
each May, proof of the work performed. Non-compliance with these requirements is cause for cancellation only after the Ministry
of Mines communicates in writing to the Concessionaire of any such default,
granting the Concessionaire a specified time frame in which to remedy the
default.

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30

There are no limitations on the total amount of surface covered
by mining concessions or on the amount of land held by an individual or company.
Excessive accumulation of land is regulated indirectly through the duties levied
on the property and the production requirements as outlined above.

Mexican mining law does not require royalties to the
Government, except for the discovery premium related to National Mineral
Reserves, Concessions in Marine Zones and Allotments to the Council of Mineral
Resources.

ENVIRONMENTAL PROTECTION

The Company has taken a proactive approach to managing
environmental risk. The Company participated in a voluntary audit of its
Guanajuato operations and conducted a multi-year environmental program completed
in 2011, working in cooperation with the Mexican environmental authority to
ensure compliance with regulations governing the protection of the environment
in Mexico. The Company is waiting for final certification from the government
authorities in respect of this program. At December 31, 2012, the Company
recorded a liability of $2.4 million on its Statement of Financial Position for
the estimated cost of future reclamation and remediation associated with the
expected retirement of its mineral properties, plant, and equipment.

PRIMARY MINING PROPERTIES

Great Panther has two material mining properties; the Topia
Mine and the Guanajuato Mine Complex.

1. Topia Mine

Unless otherwise stated, the information on the Topia Mine in
this section of the AIF is based on the technical report entitled Technical
Report on the Topia Mine, State of Durango, Mexico prepared by David W. Rennie,
P.Eng., and Tudorel Ciuculescu, M.Sc., P.Geo. of RPA Inc. (RPA) and dated
February 27, 2013 (in this section, the Topia Technical Report). Portions of
the following information are based on assumptions, qualifications and
procedures which are not fully described herein. Reference should be made to the
full text of the Technical Report which is available for review on SEDAR located
at www.sedar.com.

Additional information since the date of the Technical Report
has been prepared by Great Panther under the supervision of Robert Brown, Vice
President, Exploration who is a qualified person for the purposes of NI
43-101.

Property Description and Location

The Topia Mine is situated in and surrounding the town of
Topia, Durango State, Mexico, approximately 235 km northwest of Durango and 100
km northeast of Culiacán. The property encompasses 53 contiguous concessions
that total approximately 6,258 ha. The Topia mill and office complex is located
at approximately 25° 12' 54" N latitude and 106° 34' 20" W longitude.

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31

Great Panther holds a 100% interest in the Topia Mine through
its wholly owned Mexican subsidiary, Minera Mexicana El Rosario, S.A. de C.V.
(MMR).

Environmental protection regulations in Mexico are described as
similar to those in North America. Permits are required for new mine operations,
specifically, in order to operate a concentration plant as well as for the
hydraulic discharge of tailings and changes to grandfathered projects. There are
four government departments that deal with and regulate such affairs.

All permits are in place for the Topia Mine operation.

Accessibility, Climate, Local Resources, Infrastructure, and
Physiography

Topia is situated in the Sierra Madre Mountains in the State of
Durango, Mexico. Ground access is via 350 km of paved and gravel road from the
city of Durango. Travel is north from Durango via Highway 23 to Santiago
Papasquiaro, and west to Topia. Total travel time is reported to be eight hours.
Small aircraft flights from Culiacán and Durango service the town of Topia on a
daily basis.

The climate is generally dry for most of the year, with a wet
season from June to September, during which time 200 mm to 500 mm of rain may
fall. The annual mean temperature is 16.8°C, but winters can be cool with frosts
and light snow, particularly at higher elevations. Exploration and mining work
can be conducted year-round.

Topia is a relatively small town of approximately 3,500 people,
however, many have worked in the mines and there is a good local source of
labour. The town is serviced by road, air service, power grid, and telephone.
There are restaurants, hotels, and medical services but no bank or ATMs. Great
Panther maintains a satellite telecommunication system for telephone and the
Internet. Water is available from numerous springs, streams, and adits.

The surface and underground infrastructure at the Topia Mine
includes the following:

- Extensive underground workings;
- Multiple adits from surface as well as raises, drifts, cross-cuts,
  sub-levels, and ramps;
- Mine ventilation, dewatering, and compressed air facilities;
- Conventional and mechanized underground mining equipment;
- Mine, geology, processing, and administrative offices;
- A nominal 275 tpd flotation concentrator with surface bins, crushing
  facilities, grinding mills, flotation cells, and concentrate dewatering
  circuit;
- A tailings storage facility; and
- Connection to the national grid for the supply of electric power.

The Topia area lies within the Sierra Madre Occidental, in a
remote region of rugged terrain. Hillsides are quite steep with elevations
ranging from 600 MASL up to over 2,000 MASL.

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32

Vegetation consists of thickly intergrown bush, comprising
mesquite, prickly pear, napal, and agave, giving way to pine and oak forest at
higher elevations.

Land use in the area is predominantly mining, forestry, and
agriculture.

History

Mining in the region predates European colonization, and was
first reported in the Topia area in 1538. The first mineral concessions were
granted at Topia in the early 1600s.

Production from Topia during the period spanning the latter portion of the 19th century until the Mexican Revolution in 1910 was reportedly between $10 million and $20 million (Loucks, 1988; quoted by Orequest, 2003).  This is estimated to have been the equivalent of between 15 million and 30 million ounces of silver and 25,000 to 50,000 ounces of gold.

Peñoles acquired the mines in the district in 1944 and
completed the construction of a flotation plant in 1951. Peñoles operated at
Topia from 1951 to 1990 when the operations were shut down due to low metal
prices and labour difficulties. Mario Macias, the Mine Manager for Peñoles at
the time, acquired the Topia property and formed Compania Minera de Canelas y
Topia to carry on operations. Production for the period 1952 to 1999 totalled
15.4 million ounces of silver and 18,500 ounces of gold.

The Topia Mine was put back into production after a six year
hiatus between 1999 and 2005. Up until mid-March 2005, the mill was operating at
roughly 25% capacity (50 tpd), processing ore grading 710 g/t Ag, 5.5% Pb, and
6.0% Zn from three levels of the 1522 area of the mine. During the second half
of 2005, Great Panther refurbished and recommissioned the mill and has gradually
increased the throughput at the plant to the current 275 tpd capacity.

During 2005 and up to present, many of the property mines have
been rehabilitated to re-access the Argentina, La Dura, El Rosario, San
Gregorio, San Miguel, San Jorge, Veta Madre, Cantarranas, Animas, Oliva, and
Recompensa veins and resample parts of the veins as part of a due diligence on
sampling carried out by Peñoles. This resampling, combined with the sampling
carried out by Peñoles, forms a partial basis for the current Mineral Resource
estimate.

Since 2006, underground exploration and production channel
samples have been collected by Great Panther from all stopes and development
drifts. This work included much new development along the Argentina, San
Gregorio, El Rosario, Cantarranas, La Dura/Don Benito, and Recompensa veins.

Exploration diamond drilling has been carried out on a number
of vein systems.

Geological Setting and Mineralization

The Topia district lies within the Sierra Madre Occidental
(SMO), a north-northwest-trending belt of Eocene to Miocene age flows and tuffs
of basaltic to rhyolitic composition with related intrusive bodies. The property
is underlain by a kilometre-thick package of Cretaceous and Tertiary andesite
lavas and pyroclastic rocks which are, in turn, overlain by younger rhyolitic
flows and pyroclastics. The volcanic sequence is transected by numerous faults,
some of which host the mineralized veins in the district. There are two sets of
faults: one striking 320° to 340° and dipping northeast and the other striking
50° to 70° and dipping steeply southeast to vertically. The
northeast-trending faults are the principal host structures for precious and
base metal mineralization.

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33

The mineral deposits at Topia are adularia-sericite-type,
silver-rich, polymetallic epithermal veins. Silver-gold-lead-zinc mineralization
is found in fissure-filling veins along sub-parallel faults. Mineralization
within the veins consists mainly of massive galena, sphalerite, and tetrahedrite
in a gangue of quartz, barite, and calcite. The vein constituents often include
adularia and sericite, and the wider fault zones contain significant proportions
of clay as both gouge and alteration products.

Ore minerals occur as cavity-filling masses, comprising millimetre-scaled
crystals of galena and sphalerite. No definitive metal zoning has been
discerned, but the lower parts of the mines are reported to contain higher gold
content than at higher elevations.

The veins range in thickness from a few centimetres to three
metres. They are very continuous along strike, with the main veins extending
more than four kilometres. The Madre vein has been mined for 3.5 km and the
Cantarranas vein for 2.4 km. Many of the other veins have been mined
intermittently over similar strike lengths. Vertically, the veins grade downward
to barren coarse-grained quartz-rich filling and upwards to barren cherty
quartz-calcite-barite vein filling. The main host rock is andesite of the Lower
Volcanic Series, which is usually competent, making for generally good ground
conditions within the mine. In wider sections, with greater clay content and/or
zones of structural complexity, ground conditions are less favourable.

Exploration

Exploration work carried out at the Topia Mine by Great Panther
has comprised diamond drilling, chip sampling, mapping, and underground
development. Prior to exercising its option in 2005, Great Panther conducted a
surface diamond drill program consisting of 7,437 metres in 30 NQ-size (4.76 cm)
holes. The program was carried out on five localities: Las Trancas (on the
Cantarranas vein), Don Benito, Hormiguera, Argentina, and El Rosario.

Great Panther carried out refurbishment and sampling of
underground drifts through 2005 and 2006. A total of 779 samples were taken from
the Dos Amigos, La Dura, El Rosario, Cantarranas, and Madre veins. The sampling
was successful in confirming earlier sampling work carried out by Peñoles prior
to Great Panther acquiring the property.

In 2007, surface and underground drilling was conducted at
Madre, Argentina, La Dura/Don Benito, Animas, Cantarranas, Oliva, and
Recompensa. Total drilling was 8,293.6 metres of NQ core in 40 holes.
Underground drift development was carried out on Argentina, La Dura/Don Benito,
Animas, Cantarranas, Oliva, Recompensa, and San Gregorio.

Drilling and underground development continued throughout 2008,
with the completion of 80 metres of drifting at San Gregorio and 55 metres at El
Rosario. Great Panther also conducted development along the Argentina vein,
ramping down from the 1 level to the 2 level, and driving along the vein for
approximately 200 metres westward to the Victoria fault
(western limit of mineralization). Drilling in 2008 totalled 3,586.9 metres of
NQ and A-size (3.53 cm diameter) core in 35 holes.

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34

Drift, sub-level, and raise development was carried out at San
Gregorio, El Rosario, and Don Benito in 2009. Diamond drilling was conducted
from surface and underground at Don Benito, Hormiguera, San Gregorio, and
Recompensa. Forty-eight NQ and A core diamond holes totalling 3,825.9 metres
were drilled.

In 2010, Great Panther carried out surface diamond drilling on
Recompensa, Oliva, Cantarranas, La Prieta, Argentina, San Gregorio, and El
Rosario. A total of 9,460 metres of drilling was completed during 2010.

In 2011, ten surface drill holes were completed for a total of
1,759 metres, and 59 underground drill holes were completed for a total of 2,767
metres.

In 2012, surface drilling, along with underground development
on the 1510 level at Durangueno, provided definition of the San Gregorio,
Oxidada, San Pablo, and Higuera veins. Surface drilling was also conducted along
the south-west extension of the El Rosario vein, as well as the Argentina, Santa
Cruz (hanging wall vein to Argentina), San Gregorio, Oxidada, Oxi, Higuera, El
Rosario, Animas, and Australia veins. During the fourth quarter of 2012 there
were four surface holes drilled totaling 211 metres (5,499 metres in 40 holes in
2012). There also were 18 underground drill holes completed for a total of 657
metres in the fourth quarter (2,565 metres in 66 holes in 2012). Drilling during
the remainder of the year was conducted on the Madre, Argentina, Recompensa, Don
Benito, and La Oliva veins.

Drilling

Great Panther has been diamond drilling at the Topia Mine since
2004. Drill programs were planned and supervised by personnel employed by the
Company, its subsidiaries, and/or contractors. The surface drilling programs
conducted from 2004 to 2009 were carried out under contract by BDW Drilling of
Guadalajara, Mexico. The 2010 surface drilling was carried out by HD Drilling of
San Luis de Potosi, Mexico. Underground drill programs were carried out by Topia
Mine drillers. Core logging and collar surveys were carried out by Great Panther
personnel, as well. All surface holes are NQ-size, although some surface holes
were collared as HQ (6.35 cm dia.) and reduced to NQ. Underground drill holes
are A core size.

Drill hole locations and collar orientations were established
by the project geologists and surveyors. Downhole surveys were initially
conducted using a Tropari instrument, but more recently a Flexit has been used.
The present standard is for downhole surveys to be taken every 50 metres. For
some of the earlier holes (2004), the spacing between surveys was significantly
broader, and in some cases, only the collar and toe of the holes were
surveyed.

Logs, sample intervals, and surveys were entered into a
DataShed database using a LogChief logger. The database is managed and validated
by Great Panther mine staff, with the assistance of exploration personnel based
in Vancouver.

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35

Not all of the drilling data collected by Great Panther to date
was from the veins included in the Mineral Resource estimate. The database
provided to RPA contained records for 397 holes, totalling 46,267.5 metres.

Sampling and Analysis and Security of Samples

Sampling comprises both diamond drill and channel samples.
Drill holes provide a reliable indication of the vein locations, but drifting
and raising on vein is required to fully evaluate the quantity and grade of the
Mineral Resources.

The channel sampling was done either across the back or at
waist height across the drift face using a hammer and moil. The protocol for
sample lengths was that they were to be no longer than two metres, however, RPA
noted that there were several samples in the database that were longer than that
limit. It was also noted that there were a number of samples with recorded
widths down to a centimetre. Sample spacing was in the order of 1.5 metres to
2.5 metres in the more densely sampled areas. The veins tend to be very steeply
dipping to vertical, and so these samples are reasonably close to representing
the true width of the structure.

The channel samples were processed and assayed at the Topia
mine laboratory. Samples were dried, crushed in two stages, riffle split, and
pulverized. A sample was taken from the pulp and weighed, while the rest was
kept in storage. Samples were analyzed for gold and silver by fire assay (FA)
and gravimetric finish, or for base metals by atomic absorption (AA).

Diamond drill core samples were marked by geologists on the
core. Samples did not cross lithological limits and their lengths were
constrained to within a minimum of 10 cm and a maximum of two metres.
Mineralized structures and the material adjacent to them were always sampled.
For sets of veins with less than five metres separation, the material between
veins was sampled entirely. Samples were taken using a diamond saw to split the
core. The samples were prepared at the Topia mine laboratory.

The sawn split core samples were dried, crushed in two stages,
riffle split, and puck pulverized. QA/QC samples were inserted in the sample
stream, consisting of one blank sample of unmineralized rhyolite, one pulp
duplicate, and two certified standard material (CRM) samples of different
grades. The rhyolite blanks were prepared following a vein sample. The samples
were then shipped to the Great Panther laboratory at Guanajuato for analysis.
Samples were analyzed for gold and silver by FA with AA finish, with higher
grade silver samples rerun using gravimetric finish. Base metals were assayed
using AA.

Specific gravity data was collected by analyzing dried core
samples with a minimum weight of 500g selected by a geologist. A set of three
samples were measured: one from the vein, one from hangingwall, and one from
footwall. Great Panther personnel took density measurements of the core
specimens using a water immersion method. The density was derived from the ratio
of the weight of the sample in air and the difference between the weights in air
and submerged in water. Measurements were repeated for samples with calculated
values outside expected ranges.

The total database encompasses three components: diamond
drilling, production channel sampling, and the historical development channel
sampling completed by the former owner (Peñoles). All three datasets were used
in the modelling of the Argentina, Santa Cruz, Argentina FW (footwall), Don
Benito (La Dura), San Gregorio, El Rosario, Cantarranas (Hormiguera area),
Recompensa, and La Prieta veins.

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36

In RPAs opinion, the sampling at Topia is being conducted in
an appropriate fashion using techniques that are commonly used in the industry.
The samples are properly located and oriented and are representative of the
mineralization.

Samples are collected and handled by Topia personnel and kept
in reasonably secure premises on the mine property.

The core logging and sampling is carried out within a fenced
compound at the mill site. Access to the core is restricted to Great Panther
employees or contractors. RPA inspected the core shack and sampling facility and
considers it to be adequately equipped and reasonably secure. Core recovery in
those sections reviewed by RPA appeared to be good, and the sampling looked to
have been done correctly.

Mineral Resource Estimates

Only mineral resources have been determined for the Topia Mine
and no estimate of reserves on the property has been completed for the Topia
Technical Report.

The mineral resource estimates for the Topia Mine are tabulated
below. The effective date of the estimates is June 30, 2012.

Mineral Resource Estimates  Topia Mine

Class
    Tonnage
    GradeAg
    Au
    Pb
    Zn(g/t)
    (g/t)
    (%)
    (%)Measured
    60,400
    801
    1.65
    6.73
    5.20Indicated
    95,400
    809
    1.35
    6.33
    3.70Totals Measured andIndicated and Average
    156,000
    806
    1.47
    6.48
    4.29GradesInferred
    273,000
    837
    0.8
    5.7
    3.9


Notes:

|1. | CIM definitions were followed for Mineral
    Resources.                                                                     
|-- | -----------------------------------------------------------------------------------------------------------------------------
|2. | Mineral Resources are estimated at an NSR cut-off of
      US$170/t.                                                         
|3. | Mineral Resources are estimated using metal prices of
      US$1,680/oz Au, US$28.00/oz Ag, US$0.85/lb Pb, and US$0.85/lb
Zn.
|4. | A minimum mining width of 0.30 metres was used.                                                                              
|5. | Numbers may not add due to
rounding.                                                                                         

The estimate was prepared using a combination of polygons and
2D block models. Accumulated metal values (grade x thickness) and vein width
were estimated into the blocks using Inverse Distance Cubed (ID3) weighting.
Block grades for Au, Ag, Pb, and Zn were calculated by dividing the estimated
width into the interpolated accumulated metal value. The mineral resources
reside within 27 individual zones located throughout the Topia area.

Mining Operations

For the narrower veins at Topia, mining is by conventional cut
and fill stoping with resuing to selectively mine the ore and leave the waste
for backfill. Drilling is done with jackleg drills and ore is typically hand
mucked in the stope and dropped down timber crib muck passes
which are carried upwards as the stoping advances. Ore is hand sorted at the
face to leave as much of the waste material as possible in the stope as
backfill. From the muck passes the ore is pulled via manual chutes, loaded into
small rail cars and hand trammed to a dump at the portal. At the surface ore
dump, the ore may again be hand sorted to upgrade the ore before being
transported to the processing plant.

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37

In wider areas of the veins, mining is by mechanized cut and
fill mining with small 2.0 yd3 Load-Haul-Dump trucks (LHDs) for development and
1.0 yd3 and 0.7 yd3 LHDs for mucking in the stopes. Development access is via
decline. Lifts in the mechanized cut and fill stope are taken with horizontal
holes (breasting). Ore is hauled from the stope by LHD and then loaded into a
truck for haulage to the mill.

The mill employs conventional crushing, grinding, and flotation
to produce lead and zinc sulphide concentrates. The operation runs seven days a
week, 24 hours per day, with Sunday day-shift reserved for maintenance.

The Company has established a life of mine (LOM) estimate for
the Topia Mine of 10 years as at January 1, 2012 for the purposes of depleting
the mineral property. The Company re-evaluates its LOM estimate on an annual
basis.

Exploration and Development

Planned costs for 2013 are approximately $2.0 million for
capital investment, mine development and exploration.

The Company plans for approximately 3,900 metres of drilling at
Topia in 2013. Exploration will include approximately 2,400 metres of
underground drilling focused on the 1522, Recompensa, Socovan Victoria,
Argentina, El Rosario, Oliva, La Prieta and Durangueno Mines, while
approximately 1,500 metres of surface drilling will focus on the El Rosario,
Higueras, San Pablo, Oxidada, and Argentina veins.

Production

Mill throughput for Topia for the year ended December 31, 2012
was 56,098 tonnes of ore, an increase of 19% over the 46,968 tonnes processed in
the year ended December 31, 2011.

Metal production at Topia for the year ended December 31, 2012
was 753,298 Ag eq oz, comprising 555,710 silver (Ag) oz, 574 gold (Au) oz,
962 lead (Pb) tonnes, and 1,478 zinc (Zn) tonnes.

Average grades of ore processed from Topia in the year ended
December 31, 2012 were 345g/t Ag, 0.55g/t Au, 1.86% Pb and 2.91% Zn, which
represent decreases of 14%, 13% and 5% for Ag, Pb and Zn, respectively, and an
increase of 34% for Au over the year ended December 31, 2011.

Plant metallurgical performance for the full year of 2012
included metal recoveries of 89.4% for Ag, 57.9% for Au, 92.3% for Pb and 90.6%
for Zn.

---

38

A summary of production at Topia for 2012 and 2011 is as
follows:

2012
    2011Total
    Q4
    Q3
    Q2
    Q1
    Total
    Q4
    Q3
    Q2
    Q1Tonnes milled
    56,098
    17,109
    14,593
    11,992
    12,404
    46,968
    12,056
    12,004
    11,895
    11,013ProductionSilver (ounces)
    555,710
    155,185
    131,865
    148,439
    120,221
    535,882
    117,182
    137,707
    143,774
    137,219Gold (ounces)
    574
    171
    149
    140
    114
    500
    136
    147
    124
    93Lead (tonnes)
    962
    289
    226
    245
    202
    941
    212
    222
    266
    241Zinc (tonnes)
    1,478
    446
    369
    351
    312
    1,314
    327
    294
    348
    345Silver equivalent
      ounces1
    753,298
    214,598
    180,627
    196,658
    161,475
    789,610
    179,008
    197,688
    212,108
    200,806Silver payable ounces
    503,559
    129,802
    129,101
    137,884
    106,772
    453,569
    119,155
    113,297
    108,487
    112,630Average ore gradeSilver (g/t)
    345
    319
    316
    424
    326
    400
    345
    420
    418
    420Gold (g/t)
    0.55
    0.57
    0.55
    0.56
    0.45
    0.41
    0.44
    0.47
    0.40
    0.33Lead (%)
    1.86
    1.86
    1.69
    2.18
    1.71
    2.13
    1.85
    2.02
    2.34
    2.32Zinc (%)
    2.91
    2.87
    2.78
    3.21
    2.73
    3.05
    2.97
    2.67
    3.18
    3.42Metal recoveriesSilver
    89.4%
    88.4%
    89.0%
    90.7%
    90.5%
    88.7%
    87.7%
    85.0%
    89.9%
    92.3%Gold
    57.9%
    54.1%
    57.8%
    64.3%
    64.0%
    80.1%
    79.2%
    80.4%
    81.6%
    79.0%Lead
    92.3%
    91.0%
    91.4%
    93.6%
    94.1%
    94.0%
    95.0%
    91.4%
    95.5%
    94.1%Zinc
    90.6%
    90.7%
    90.9%
    91.2%
    92.1%
    91.7%
    91.3%
    91.9%
    92.2%
    91.5%Concentrate gradesLeadSilver (g/t)
    8,409
    7,493
    8,997
    8,708
    8,757
    8,837
    8,528
    9,205
    8,463
    9,167Gold (g/t)
    7.48
    7.19
    8.60
    7.35
    6.88
    6.97
    8.05
    8.80
    6.27
    4.93Lead (%)
    49.86
    48.69
    52.82
    48.79
    49.80
    52.77
    52.83
    50.31
    53.33
    54.61Zinc (%)
    10.48
    11.48
    10.33
    10.49
    9.16
    8.84
    9.78
    10.68
    8.65
    9.46ZincSilver (g/t)
    715
    779
    692
    735
    636
    656
    619
    640
    674
    687Gold (g/t)
    1.62
    1.65
    1.74
    1.38
    1.68
    1.63
    2.07
    1.66
    1.44
    1.40Lead (%)
    1.72
    1.77
    1.75
    1.67
    1.68
    1.35
    1.26
    0.83
    1.50
    1.68Zinc (%)
    51.31
    50.66
    50.02
    51.71
    53.45
    53.93
    53.60
    55.49
    52.89
    54.08


1. For 2012, silver equivalent ounces for each metal were
established using commodity prices of: US$1,680 per oz, US$28 per oz, US$0.85
per lb, and US$0.85 per lb; for gold, silver, lead and zinc, respectively, and
applied to the recovered metal content of the concentrates that were produced by
the two operations.

Production at Topia for 2013 is expected to be at similar
levels to 2012.

2. Guanajuato Mine Complex

Unless otherwise stated, the information on the Guanajuato Mine
Complex in this section of the AIF is based on the technical report entitled
NI43-101 Report on the Guanajuato Mine Complex Mineral Resource Estimation for
the Guanajuatito, Cata, Los Pozos, and Santa Margarita Zones, as of January
31st, 2012 prepared by the Companys Vice President, Exploration Robert F.
Brown, P.Eng., a Qualified Person under NI 43-101 and the Vice President,
Exploration of the Company, and dated June 26, 2012 (in this section, the
Guanajuato Technical Report). Portions of the following information are based
on assumptions, qualifications and procedures which are not fully described
herein. Reference should be made to the full text of the Technical Report which
is available for review under the Companys profile on SEDAR located at
www.sedar.com.

---

39

Additional information since the date of the Technical Report
has been prepared by Great Panther under the supervision of Robert Brown, Vice
President, Exploration who is a qualified person for the purposes of NI
43-101.

Property Description and Location

The Guanajuato Mine Complex is situated north of the city of
Guanajuato, Guanajuato State, Mexico, approximately 430 km northwest of Mexico
City. The Property consists of 18 contiguous claims that cover approximately
679.64ha in area. The claim group is located at approximately 21° 03' N latitude
and 101° 15' W longitude (NAD 27 UTM 265500E, 2327500N). Great Panther holds a
100% interest in the Property through its wholly owned Mexican subsidiary,
Minera Mexicana El Rosario, S.A.de C.V. (MMR).

Claim boundaries have been legally surveyed. The tailings
disposal area and the waste rock dump are contained within the property
boundaries in areas where Great Panther holds surface rights. There are no known
environmental liabilities associated with the property.

The Guanajuato Mine Complex operates under the same permissions
as those of the Sociedad Cooperativa Minera Metalùrgica Santa Fe de Guanajuato
(the Cooperative) from whom the property was acquired in 2005. The tailings
storage facility is operated in accordance with federal laws and Great Panther
works closely with Procuraduria Federal de Proteccion al Ambiente (PROFEPA), the
Federal office for environmental protection.

The Guanajuato Mine Complex has entered into the National
Environmental Audit program, a voluntary audit, where the primary objective is
to identify, evaluate, and control risk to the environment. This audit led to an
extensive action plan which was agreed between Great Panther and the
environmental authorities. Successful completion of the audit action plan will
result in Great Panther receiving the Clean Industry Certificate.

The Guanajuato Mine Complex has an environmental department and
carries out regular monitoring and reclamation work on the site, as well as
coordinating permit application matters for activities such as exploration work
in new areas.

Accessibility, Climate, Local Resources, Infrastructure, and
Physiography

The property is situated along the north eastern side of the
city of Guanajuato and is accessible via city streets. Guanajuato has a
population of approximately 153,400 and is located within 50km, by road, of an
international airport at León, Mexico. The property is easily accessible from
major population centres in central Mexico via a system of modern roads.

Central Mexico has a dry climate with an annual precipitation
of about 600 mm per year generally falling between June and October. The annual
mean temperature is 25°C, but winters can be cool with lows approaching 0°C.
Exploration and mining work can be conducted year-round uninterrupted by
weather.

Guanajuato has a long history of mining so labour and supplies
are readily available. Storage, waste disposal, and plant sites are well
established. The electricity supply to the operations in at the Guanajuato mine is provided through the national power grid administered
by CFE. The water supply consists of groundwater at the mines and rainwater
filtrations.

---

40

The surface and underground infrastructure at the Guanajuato
Mine includes the following:

- Extensive underground workings from surface to approximately 600 metres
  below surface including multiple shafts and adits from surface as well as
  internal shafts and ramps;
- Two main shafts, the Rayas, for men and materials, and the Cata shaft, for
  rock hoisting;
- A nominal 1,200tpd flotation concentrator with surface bins, crushing
  facilities, grinding mills, flotation cells, and concentrate dewatering
  circuit;
- A tailings storage facility;
- Connection to the national grid for the supply of electric power;
- Conventional and mechanized underground mining equipment;
- Mine, geology, processing, and administrative offices in several locations.
  A shaft and ramp from surface as well as internal ramps and drives linking to
  adjacent mines;

Guanajuato is located on the Central Plateau of Mexico in the
Sierra Guanajuato Mountains. The terrain is moderately rugged, with elevations
on the property ranging from 1,600 MASL to 2,200 MASL. Hillsides are deeply
incised by drainage and slopes are moderately to extremely steep. Vegetation
consists of grasses, small trees, shrubs, and cacti. Larger trees grow in the
valley bottoms where there is more water.

History

Exploration in the Guanajuato area dates back to 1548 when
silver mineralization was first discovered in the Las Luz area by Spanish
colonists. Two years later an outcrop of the Veta Madre was found near the
current site of the Rayas Mine. Mining took place on a relatively small scale
until the early 1700s when application of explosives for tunneling resulted in a
significant increase in productive capacity. In the latter portion of the 18th
century, Antonio Obregón y Alcocer financed the discovery and development of the
Valenciana Mine. This mine became one of the premier silver mines in the world,
at the time accounting for a third of global annual silver production. The
Spanish controlled mining in the district until 1816 when mining ceased and all
production facilities were destroyed during the Mexican War of Independence. The
Valenciana Mine was reopened in 1868 but operations at that time were hampered
by a lack of rail facilities. Mining production declined during the early 1900s
due to low prices. At that time, American interests acquired and reopened many
of the mines. Old ore dumps and tailings were reprocessed to extract gold and
silver using the newly discovered cyanide process; however, the onset of the
Civil War in 1910 severely curtailed mining activity in the country, resulting
in a decades-long slump in production.

---

41

Demands for higher pay and better working conditions resulted
in the mines being turned over to the Sociedad Cooperativa Minera Metalúrgica
Santa Fe de Guanajuato (the Cooperative) in 1939. The Cooperative operated
several mines in the district throughout the latter half of the 20th century and
into the 2000s. Great Panther acquired the Guanajuato Mine Complex from the
Cooperative in 2005. The operation included two main properties, a plant,
workshops and administration facilities, mining infrastructure, equipment, and
certain surface rights (real estate). The total purchase price was US$7,250,000
(paid) consisting of staged cash payments to the end of 2006. At the time of the
purchase, the operation suffered from lack of investment and working capital,
and had not run at full capacity since 1991. Great Panther resumed production in
2006 and production has run continuously since that time.

Geological Setting and Mineralization

The Guanajuato Mining District is located in the southern
portion of the Mesa Central physiographic province. The Mesa Central is an
elevated plateau of Cenozoic volcanics and volcaniclastics located in central
Mexico. It is bounded to the north and east by the Sierra Madre Oriental, west
by the Sierra Madre Occidental and south by the Mexican Trans Volcanic Belt.
Rocks within the Mesa Central comprise a Paleocene to Pliocene sequences of
dacite-rhyolite, andesite and basalt with related intrusive bodies and
intercalated local basin fill deposits of coarse sandstones and conglomerates.
This Cenozoic volcano-sedimentary sequence overlies a package of deformed and
metamorphosed Mesozoic submarine mafic volcanics and turbidites.

The Guanajuato Mining District is underlain by Mesozoic marine
sediments and predominantly mafic submarine lava flows, of the Luz and Esperanza
Formations, these are weakly metamorphosed and intensely deformed. This basal
sequence is cut by a variety of intrusive bodies ranging in composition from
pyroxenite to granite with tonalitic and dioritic intrusive being the most
volumetrically significant.

Cenozoic volcanic and volcanogenic sediments unconformably
overlie the Mesozoic basement rocks. In the area the oldest Cenozoic unit is the
Paleocene Comanja granite, this was followed by the Eocene extrusion of andesite
which was sporadically deposited and contemporaneous with the deposition of the
Guanajuato conglomerate in localized grabens. The Guanajuato conglomerate
underlies an unconformity beneath a sequence of felsic to mafic volcanic rocks
that consist of, Oligocene ignimbrites, lava flows and domes.

The country rocks are transected by numerous faults which host
precious metal-bearing veins, stock-works and breccias. The deposits are
Oligocene in age and hence contemporaneous with the eruption of felsic 
intermediate volcanics. The primary strike direction of the faults which host
the veins is northwest, less significant are north-south, east-west, and
northeast orientations. Principal fault systems in the Guanajuato camp are the
La Luz, Sierra, and Veta Madre. The Veta Madre hosts the Mineral Resource that
is the subject of the Guanajuato Technical Report. This Veta Madre structure is
traceable for 25 km through the district. It strikes northwest-southeast and
dips at ~45 degrees to the southwest.

In the Guanajuato Mine Complex mineralization occurs within
fault zones as discontinuous shoots and tabular bodies. It is apparent from mine
plans that stopes can be in the order of 700 metres long and extend for 400
metres vertically. Zone thickness ranges from centimetre-scale to tens of
metres. The mineralizing event is thought to have taken place during the
Oligocene, a period of intense felsic volcanic activity in the area, and comprised three stages termed
pre-ore, ore, and post-ore. Pre-ore mineralization consists of trace silver and
gold with accessory quartz and adularia. Ore mineralization comprises an early
silver-rich phase associated with adularia, as well as a later low-silver
variant, which is typified by calcite and quartz. The post-ore mineralization is
also precious metal-poor, with accessory calcite, dolomite, and fluorite.

---

42

The primary economic components are silver and gold, with
silver the more important of the two. Base metals do not normally occur in
economic concentrations. Average silver grades of the ore are typically in the
100g/t Ag to 500g/t Ag range but locally can be over 1,000g/t Ag. Gold grades
are generally in the 0.5g/t Au to 2g/t Au range, with the exception of Santa
Margarita where average grades are in the range of 5-7g/t Au. Relative gold and
silver contents at Santa Margarita are quite different from Cata, Pozos and
Guanajuatito. The average silver to gold ratio in Cata is roughly 225:1, at
Pozos 250:1, at Guanajuatito 275:1 while at Santa Margarita 3.5:1. Within the
mine drill core and channel samples are not normally analyzed for base metals so
an average grade for Cu, Pb or Zn is not obtainable.

Mineralization at the Guanajuato Mine Complex is closely
associated with the structural history. The Veta Madre quartz-adularia vein /
breccia system is closely associated with the Madre fault and an associated
diorite dyke (thickness varying from discontinuous lenses at Guanajuatito to a
50-100-metre thick body in the Cata, Los Pozos, and Santa Margarita areas),
oriented 325 degrees with a 45 degree southwest dip. The Veta Madre forms along
the dyke contacts, and in the footwall La Luz Formation footwall rocks to the
Madre fault. At the Guanajuatito zone the main mineralization occurs just into
the footwall Esperanza Formation deformed siltstone and shale. Eight (8) zones
were modeled at Guanajuatito, with the Veta Madre and the closely associated
footwall (FW) zone being dominant below the 80 level. At the Cata zone, Veta
Madre mineralization occurs along the base of the diorite dyke with the
Esperanza Formation, and as nine (9) separately modelled zones within the
diorite. A number of these zones are shallow dipping structural splays. The Los
Pozos zone is a vein stockwork to breccia system (Veta Madre) at the base of the
diorite dyke and into the Esperanza Formation. The Santa Margarita zones form a
complex structural set of nine (9) sub-parallel bodies within the diorite dyke,
above the Veta Madre breccia which is at the diorite contact with the footwall
Esperanza Formation, but in this area is barren.

The best mineralization is often found related to bends in the
Veta Madre orientation (Barclay, 2007) such as at San Vicente in the Rayas area,
and at Cata and Santa Margarita. These structural bends may be due to changes in
rock type competencies, and varying thickness of the diorite dyke.

The vertical extent of the deposits at Guanajuato spans over
700 metres (2,200 metres to 1,500 metres elevations and open to depth).
Mineralization occurring above 2,100-metre elevation was termed upper ore,
between 2,100 metres and 1,700 metres lower ore, and below the 1,700-metre
elevation deep ore (Randall, 1994). Fluid inclusion microscope work (Moncada,
2011) from over 850 samples gather through the mine and in deep drilling from
the Santa Margarita area, indicated boiling zones from the 2,100-metre to
1500-metre (deepest drilling at the GMC) elevations. Moncadas work, along with
Barclay (2007) structural observations of up to eight (8) stages of crosscutting
brecciation, and the variable range of Ag:Au ratios indicate that the
mineralization along the Veta Madre is associated multiphase structural activity
and fluid flow.

---

43

The mineral deposits at Guanajuato are classic fissure-hosted
low-sulphidation epithermal gold-silver-bearing quartz veins and stockworks.
Economic mineralization consists of fine-grained disseminations of acanthite,
electrum, aguilarite, and naumannite with accessory pyrite, and relatively minor
sphalerite, galena, and chalcopyrite. Gangue minerals include quartz, calcite,
adularia, and sericite. The veins are accompanied by hydrothermal alteration
consisting of argillic, phyllic, silicic, and propylitic facies. Mineral
textures in this zone are typically fracture-filling, drusy, and colloform
masses.

Epithermal systems, form near surface, usually in association
with hot springs, and at depths in the order of a few hundred metres below the
paleosurface. Hydrothermal processes are driven by remnant heat from volcanic
activity, which in the case of Guanajuato occurred in the middle to late
Tertiary. Circulating thermal waters, rising up through fissures, eventually
reach the boiling level where the hydrostatic pressure is low enough to allow
boiling to occur. This can impart a limit to the vertical extent of the
mineralization as the boiling and deposition of minerals is confined to a
relatively narrow band of thermal and hydrostatic conditions. In many cases,
however, repeated healing and reopening of host structures can occur, which
causes cyclical vertical movement of the boiling zone, resulting in
mineralization that spans a much broader range of elevations. This appears to
have occurred at Guanajuato.

Exploration

Exploration work conducted by Great Panther has been almost
exclusively diamond drilling, primarily underground. Since acquiring the
Guanajuato Mine in 2005, Great Panther has completed 73 surface drill holes
totalling 15,169 metres and 605 underground holes totalling 80,704 metres.

Exploration drilling is being carried out with the use of four
underground drills, two on contract and two in-house rigs. The drilling with the
two in-house rigs is focused on immediate development and mining areas,
specifically at Cata Clavo, and to a lesser degree at Los Pozos. The larger
contract drills are focused on upgrading mineral resource definition, and in new
areas of the mine targeted from historical data compilation. Upgrading is being
done at Santa Margarita, while exploration targeting is taking place north and
south of the Guanajuatito zone, at Valenciana, in the Rayas shaft area and south
both at depth and near surface. The exploration has been successful in both
endeavours, better defining the zones referenced to in the Guanajuato Technical
Report and discovering new areas of mineralization both at south of the Rayas
shaft, and north and south of the Guanajuatito zone.

In addition, initial surface rock sampling on the Promontorio
claim, southeast of the Rayas Shaft, has identified a gold-rich zone of
mineralization along more than 100 metres of the Veta Madre structure.
Compilation of the underground data is ongoing, as will be the evaluation of the
extent of former mining, and re-sampling of stopes and levels. There are more
than 300 metres of strike length to the southeast of Promontorio that has seen
only limited exploration and underground development. Overall, the property
encompasses more than four kilometres of strike length on the Veta Madre
structure, much of which has seen little to no exploration.

On February 5, 2013, the Company announced that underground
drilling programs at the Guanajuato Mine Complex were successful in intersecting
high grade silver-gold mineralization in the historic Valenciana Mine area and
discovered two new zones of silver-gold mineralization in the Guanajuatito
Mine area. The drilling at Valenciana included an intercept of 2,900g/t silver and 26.00g/t gold over 1.30 metres, while the two new discoveries at Guanajuatito are highlighted by intersections of 1,010g/t silver and 6.67g/t gold over 1.10 metres
and 1,460g/t silver and 4.79g/t gold over 1.15 metres.

---

44

Drilling

Diamond drilling at Guanajuato is conducted under two general modes of operation: one by the exploration staff (exploration drilling) and the other by the mine staff (production and exploration drilling). Production drilling is predominantly
concerned with definition and extension of the known zones, to guide development and mining and is generally done to provide localized knowledge of the vein position which regularly pinches and swells.

Exploration drilling is conducted further from the active mining area with the goal of expanding the mineral resource base. Drilling results from both programs are used in the estimation of mineral resources.

Exploration drilling, under the control of the mine and exploration staff, is continuing at Cata Clavo, Santa Margarita, Rayas Deeps, and Guanajuatito. The programs are configured to explore down-dip extensions of the mineralized zones at 25- to
50-metre spacing.

Collar surveys are conducted by total station instrument and uploaded directly to a database for merging with the logging data. Down hole surveys are currently performed every 50 metres using a Reflex instrument, and the survey data are manually
input to the database. For the shorter production holes, typically less than about 60 metres, down-hole surveys are not performed, and the orientation is measured at the collar only. Also the UGG holes from UGG10-001 to UGG11-021 had no down-hole
survey measurements collected.

Since the Guanajuato Technical Report and up to December 31, 2012, underground drilling of 25,990 metres in 166 holes was completed in the Santa Margarita, Valenciana, Guanajuatito, Cata, San Cayetano, Los Pozos, and Rayas areas, and no surface
drilling was conducted.

Sampling and Analysis and Security of Samples

All sampling and analytical work is conducted by employees, contractors, or designates of Great Panther. The samples are in the custody of Great Panther personnel or stored in a secure area at all times. The site security is of a reasonable
standard, consistent with common practical industry standards. Quality control quarter core field duplicate samples of Guanajuatito drill core (UGG prefix holes) were collected and the assays received and compared to the original values.

Most of the analytical work is carried out on the Cata mine site, at a laboratory managed for Great Panther by SGS Group. Starting in September 2011, approximately 50 pulps from the drilling and underground sampling at the Guanajuato Mine Complex
have been sent monthly to a commercial laboratory, ALS Chemex, as a matter of routine and added QA/QC.  In addition the SGS-GTO laboratory manager conducts routine Quality Assurance/Quality Control (QA/QC) and instrument calibration and maintains a
database of the results. SGS Group conducts a monthly round robin comparison against three other laboratories, and Laboratory Quality Services International conducts monthly checks as well.

---

45

Correlation of silver assays between SGS-GTO and ALS Chemex was
excellent at 0.99, while correlation of gold assays between the two labs was
less at 0.83. The poorer correlation regarding gold assays is due to the nugget
effect brought on by the presence of electrum as the principal gold mineral.

The laboratory is equipped to do fire assay and atomic
absorption spectroscopy (AA). Samples are prepared on site, run through a
two-stage crusher and then split to a 200g Sub-sample for pulverizing to 98%
passing 200 mesh. Samples are analyzed by fire assay with an AA finish using a
30 gram aliquot, and any that report greater than 10g/t Au or 300g/t Ag are
reanalyzed by fire assay using a gravimetric finish. The laboratory can also
perform determinations for arsenic, copper, lead, zinc, and antimony but these
elements were not analyzed for drill holes or channels in Guanajuatito.

Robert Brown, Vice President, Exploration inspected the
laboratory and found it to be orderly and appropriately configured for the
analytical work required. The assay protocols are conventional methods, commonly
used in the industry, and a reasonable level of QA/QC monitoring is applied to
assure that the results are accurate.

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46

Mineral Resource Estimates

Only mineral resources have been determined for the Guanajuato
Mine Complex and no estimate of reserves on the property has been completed for
the Guanajuato Technical Report.

The mineral resource estimates for the Guanajuato project are
tabulated below. The effective date of the estimates is January 31, 2012.

Mineral Resource Estimates  Guanajuato Mine Complex

Tonnage
    Grade g/t
    Contained kozArea
    kt
    AgEq
    Au
    Ag
    AgEq
    Au
    AgCata
    141.6
    477
    1.69
    374
    2,171
    7.70
    1,703Pozos
    84.3
    265
    0.94
    207
    717
    2.56
    562Santa Margarita
    41.0
    445
    6.89
    27
    587
    9.07
    35Guanajuatito
    8.9
    191
    0.84
    140
    55
    0.24
    40Totals Measured
    275.8
    398
    2.21
    264
    3,530
    19.57
    2,340Cata
    45.2
    388
    1.33
    308
    565
    1.93
    447Pozos
    51.8
    196
    0.63
    158
    327
    1.06
    262Santa Margarita
    118.6
    301
    4.35
    37
    1,150
    16.59
    141Guanajuatito
    16.9
    143
    0.57
    108
    78
    0.31
    59Totals Indicated
    232.6
    283
    2.66
    122
    2,119
    19.89
    910Cata
    186.8
    455
    1.60
    358
    2,736
    9.63
    2,150Pozos
    136.1
    239
    0.83
    188
    1,044
    3.62
    824Santa Margarita
    159.6
    338
    5.00
    34
    1,737
    25.67
    176Guanajuatito
    25.9
    159
    0.66
    119
    133
    0.55
    99Totals Measured and Indicated and Average
      Grades
    508.5
    346
    2.41
    199
    5,649
    39.46
    3,250Cata
    3.7
    524
    1.55
    430
    62
    0.18
    51Pozos
    2.4
    171
    0.51
    140
    13
    0.04
    11Santa Margarita
    65.3
    404
    4.34
    140
    848
    9.11
    294Guanajuatito
    151.8
    324
    1.17
    252
    1,580
    5.73
    1,231Totals Inferred
    223.2
    349
    2.10
    221
    2,503
    15.06
    1,587


|Notes:
|------
|      
|      
|      
|      
|      
|      
|      

For the purpose of the estimates, the Guanajuato project was
divided into four areas: Cata; Los Pozos; Santa Margarita; and Guanajuatito. A
3D block model was constructed for each area. The areas are further subdivided
into of a number of lenses that are individually represented by wireframes. The
wireframes serve to constrain the grade interpolations and control data
selection. Au and Ag grades have been interpolated into individual blocks using inverse distance
weighting (cubed). Each block residing at least partly within one or more of the
28 wireframes has received a grade estimate, providing that there is sufficient
data within the prescribed search envelopes.

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47

Mining Operations

Ore from the Guanajuato Mine Complex is being treated at the
central Cata plant. Great Panther has operated the Cata plant since 2006. The
Cata processing plant uses conventional crushing, grinding, milling, flotation,
and concentrate dewatering circuits to generate sulphide concentrates containing
silver and gold, which are sent offsite for smelting and refining. The Cata mill
has a maximum capacity of 1,200tpd but currently operates for three to four days
per week at a rate of approximately 860tpd for an average of 480 tonnes per
calendar day. Subsequent to the Guanajuato Technical Report, processing at the
Cata plant averaged 588 tonnes per calendar day for the fourth quarter of
2012.

The metallurgical performance does not appear to be affected by
the blend ratios of ore from the various zones. During the three month period
ending March 2012, the metallurgical balance showed the average silver recovery
to be 90.4% and gold recovery to be 91.5% . Both silver and gold are recovered
as components of a sulphide concentrate containing pyrite and silver sulphide
minerals.

In addition to the operation of the Cata plant, Great Panther
has undertaken some metallurgical test-work aimed at improving the operation of
the plant. During 2011 this included the addition of a new flotation section
with the installation of five new fully automated Outotec cells which replaced
the old sections of rougher cells. Metal recoveries at the Guanajuato plant
remain strong due to the addition of a re-grind mill, commissioned in April
2012, which improved process control.

The Company has established a life of mine (LOM) estimate for
the Guanajuato Mine Complex of five years as at January 1, 2012 for the purposes
of depleting the mineral property. The Company re-evaluates its LOM estimate on
an annual basis.

Cata Clavo Zones

Mining of the Cata Clavo is down to the 510 level where
development and stoping are being carried out on the Veta Madre and Alto 1, 1a
and 2 veins.

Cata Clavo is a relatively steeply dipping structure that has
been identified for mining from the 1590 elevation (510 level) to the 1665
elevation (435 level). The mining area is up to 100 metres long and up to 10
metres wide. The HW Madre, Contact, Alto 1, Alto 1a, FW Alto 1, HW Alto 1a, Alto
2 lower, and Alto 2 upper, and Alto 3 zones are located on the hanging wall side
of the Cata Clavo Madre vein and the multiple zones are close to one another. In
some areas, the combined Veta Madre to Alto 3 generates an overall width
exceeding 30 metres.

The Cata ore zones are being mined by mechanized cut and fill
method. An access ramp is located in the hanging-wall from which cross-cuts are
driven to access the ore at the various lift elevations.

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48

The ramp is approximately 3.5 metres by 3.5 metres and is
supported by a combination of grouted rebar, wire mesh and straps as required.
There are as many as six separate ore zones varying in widths from two to eight
metres with strike lengths of 20 to 80 metres.

The sequence of mining commences with the lateral development
of the ore zones on sub- levels which are spaced 20 to 30 meters apart. Mining
then progresses upwards from one sub-level to the next in four meter lifts using
breasting to mine the ore. As broken ore is removed, waste-rock fill is placed
in the void. Currently, lateral development has been completed on the 510 meter
level and mining of the first lift has commenced.

There are 1-boom, electric hydraulic jumbos for drilling, 3.5 -
and 4.0 - yard LHDs for mucking, and 10-and 18-tonne trucks for ore haulage.
Ground support in the stopes is installed using scissor lift trucks.

The rock stability is assessed each year by Roland Tosney,
Consulting Geotechnical Engineer. For up to five meter roof spans, grouted
rebar, rock bolt support is required. For spans over five meters but less than
nine metres, cable bolts are installed for additional support. Four metre long
cable bolts are installed in holes drilled with the jumbo. For zones requiring
spans of greater than nine metres, permanent rock or concrete pillars are
left.

Los Pozos Zones

Development of Los Pozos was extended from the 275 to 385
level. There is still a partial lift above the 298 level which is to be mined in
the future. Ore production from Los Pozos commenced in September 2009. The Los
Pozos zone is up to 15 metres wide and up to 100 metres along strike. Access has
been provided from the 275 level to the 390 level by a footwall ramp. A second
ramp is being driven from the 390 level towards the 420 level. The ramp
development was good with an even footwall and good ground conditions.

The Los Pozos deposit is a relatively steeply dipping structure
that has been identified for mining from the 1825 MASL elevation (275 level) to
the 1715 MASL elevation (385 level).

Los Pozos ore zone is being mined by mechanized cut and fill
method. There is a ramp in the footwall which provides access to sublevels that
are spaced approximately 35 metres apart.

The ramp is approximately 3.5 metres by 3.5 metres and is
supported by grouted rebar and mesh as required. At each sublevel, a crosscut is
driven across the zone followed by development along strike to the extents of
the vein. The vein is then opened to its full width or, if the zone is too wide,
to a maximum of 12 metres wide. In wider zones, it is necessary to either
install cable bolts and/or to leave pillars.

Mining then progresses upwards in three metre lifts using
breasting to mine the ore. As ore is removed, waste fill is placed in the void.
There are electric hydraulic jumbos for drilling, 3.5 - and 4.0 -yard LHDs for
mucking, and 10-tonne trucks for ore haulage. Ground support in the stopes is
installed using scissor lift trucks.

The rock stability was assessed by Roland Tosney in 2010. For
five metre widths at Los Pozos, only rock bolt support is required. For widths
over five metres but less than 12 metres, cable bolts are required for support. Four metre long cable bolts are installed in holes
drilled with the jumbo. For zones over 12 metres wide, it is necessary to leave
a permanent pillar or to provide support which is longer than the four metre
cable bolts.

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49

Santa Margarita Zones

The Santa Margarita gold rich vein has been explored by ramp
development from the 390 level to the 435 level. The ramp has been driven from
the 1710 MASL elevation (390 level) to the 1665 MASL elevation (435 level), and
extended down to the 1625 metre elevation (475 level). Extraction is by cut and
fill mining methods.

Santa Margarita has been producing ore since March 2009. Santa
Margarita is a gold rich deposit and a cut-off grade of 2.4g/t Au is used for
this area. The Santa Margarita deposit is steeply dipping and narrow.
Development of Santa Margarita has consisted of an exploration/production ramp
driven on the zone.

The Santa Margarita ore zones are being mined by mechanized cut
and fill method. An access ramp is located in the hanging-wall from which
cross-cuts are driven to access the ore at the various lift elevations.

The ramp is approximately 3.5 metres by 3.5 metres and is
supported by grouted rebar, as required. There is one main breccia ore zone plus
vein stockwork ore zones located in the footwall. Typical ore widths are 2.0 to
5.0 meters. The main zone is over 150 metres long while the footwall stockwork
zones are 20 to 50 metres long.

The sequence of mining commences with the lateral development
of the ore zones on sub- levels which are spaced 20 or 40 meters apart.
Depending on the ore widths, mining then progresses upwards from one sub-level
to the next in 1.5 meter (narrow ore) or 3.0 meter lifts (wider ore) using
uppers or breasting respectively, to mine the ore. As broken ore is removed,
waste-rock fill is placed in the void. Currently, lateral development is being
conducted on the 455 and 475 meter levels while stoping is well established
between the 435 and 390 meter levels.

Drilling is carried out with hand-held jack-leg drills in the
narrow sections and with 1-boom, electric hydraulic jumbos in the wider zones.
Mucking is by 2.0 -, 3.5 - and 4.0 - yard LHDs and broken ore is trucked to the
Cata shaft by 10- and 18- tonne trucks. Ground support in the stopes is
installed using stoppers or jack-legs and/or scissor lift trucks.

The rock stability is assessed each year by Roland Tosney,
Consulting Geotechnical Engineer.

Guanajuatito Zones

Guanajuatito has been producing ore since 2006. The
Guanajuatito ore zones are being mined by mechanized cut and fill method. An
access ramp is located in the hanging-wall from which cross-cuts are driven to
access the ore at the various lift elevations.

---

50

The ramp is approximately 3.5 metres by 3.5 metres and is
supported by grouted rebar, as required. There is one main ore zone which is
typically 1.5 to 4.0 meters wide and up to 100 meters long on strike.

The sequence of mining commences with the lateral development
of the ore zones on sub- levels which are spaced 40 meters apart. Mining then
progresses upwards from one sub-level to the next in 1.5 meter lifts using
uppers, to mine the ore. As broken ore is removed, waste-rock fill is placed in
the void. Currently, ramp access is being established to the 200 meter level
while stoping is well established between the 160 and 120 meter levels.

Drilling is carried out with hand-held jack-leg drills in the
narrow sections. Mucking is by 2.0 -, 3.5 - and 4.0 -yard LHDs and broken ore is
hauled from the mine by 10-tonne highway trucks to the processing plant. Ground
support in the stopes, grouted rebar, is installed using stopers or
jack-legs.

The rock stability is assessed each year by Roland Tosney,
Consulting Geotechnical Engineer.

Exploration and Development

Planned costs for 2013 are approximately $12.0 million for
capital investment, mine development and exploration.

At the Guanajuato Mine Complex approximately 24,000 metres of
underground drilling is planned for the Valenciana, Guanajuatito, Santa
Margarita, Cata, and San Cayetano areas in 2013. No surface drilling is planned
for 2013.

Production

Processed ore at Guanajuato for the year ended December 31,
2012 was 174,022 tonnes, an increase of 3% over the prior year.

Metal production of 1,625,305 Ag eq oz for the full year 2012
represented an increase of 15% over the prior year due to both increased
throughput and higher gold grades. The high grade Cata development and stoping
from the 510 metre level, plus the successful recovery of crown pillars at the
390 and 470 metre levels by long-hole mining methods have contributed
significantly to the increase in production for the year.

For the year ended December 31, 2012, silver production was
1,004,331 ounces, representing an increase of 5% over the year ended December
31, 2011. Gold production for 2012 at Guanajuato was 10,350 ounces, a record and
an increase of 38% over the prior year. Development and production from
Guanajuatos gold-rich Santa Margarita area continues to contribute to higher
gold production.

Average ore grades for the year ended December 31, 2012 were
199 g/t Ag and 2.02 g/t Au, as compared to 199 g/t Ag and 1.52g/t Au for 2011.

Metal recoveries at the Guanajuato plant remain strong due to
the addition of a re-grind mill, commissioned in April 2012, which improved
process control. For the year ended December 31, 2012, metal recoveries were
90.2% for silver and 91.5% for gold compared to 88.5% and 90.3%, respectively,
in 2011. Additional improvements were also made to the crushing
section of the plant during the year where a new double-deck screen was
installed.

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51

Development and production in the lower levels of Cata yielded
61,775 tonnes grading 327g/t Ag and 1.58g/t Au and constituted 48% of total
metal production for the year ended December 31, 2012. Ore development on the
525 metre level in Cata commenced in the fourth quarter of 2012. Production from
the Santa Margarita area continues to add gold production with 34,538 tonnes
averaging 5.31g/t Au and 60g/t Ag during the year ended December 31, 2012.
Further increases in gold production are expected from Santa Margarita with the
development of ramp 151 at the 510 metre level.

Ore produced from Los Pozos totaled 43,905 tonnes at grades of
192g/t Ag and 0.82g/t Au during the year ended December 31, 2012.

Production in the Guanajuatito area for the year totaled 16,611
tonnes at grades of 168g/t Ag and 0.89g/t Au during the year ended December 31,
2012. Ramp development at Guanajuatito connected with the Valenciana mine at the
245 metre level.

During the third quarter of 2012 the Rayas Shaft was shut down
to begin a renovation program to enhance the overall safety conditions and
increase efficiency in terms of the ability and capacity to transport personnel.
The rehabilitation work is expected to be completed by the end of the second
quarter of 2013. In the interim, workers are accessing the mine via the main San
Vincente Ramp.

A new tertiary crusher was not installed as planned in the last
half of 2012 due to delays by the supplier. It is expected that installation
will be completed by the end of the first quarter of 2013.

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52

A summary of production at Guanajuato for 2012 and 2011 is as
follows:

2012
    2011Total
    Q4
    Q3
    Q2
    Q1
    Total
    Q4
    Q3
    Q2
    Q1Tonnes milled
    174,022
    50,550
    43,714
    40,964
    38,794
    169,213
    40,114
    41,371
    44,748
    42,980ProductionSilver (ounces)
    1,004,331
    298,750
    239,992
    226,284
    239,305
    959,490
    237,572
    206,061
    242,436
    273,421Gold (ounces)
    10,350
    2,656
    2,866
    2,214
    2,615
    7,516
    2,145
    1,347
    1,807
    2,217Silver equivalent ounces1
    1,625,305
    458,092
    411,959
    359,063
    396,192
    1,410,403
    366,286
    286,862
    350,836
    406,419Silver payable ounces
    968,710
    316,275
    185,045
    257,521
    209,869
    878,693
    306,070
    251,387
    85,427
    235,809Average ore gradeSilver (g/t)
    199
    206
    188
    189
    213
    199
    207
    175
    193
    222Gold (g/t)
    2.02
    1.80
    2.22
    1.82
    2.30
    1.52
    1.84
    1.12
    1.38
    1.75Metal recoveriesSilver
    90.2%
    89.2%
    90.9%
    91.1%
    90.1%
    88.5%
    89.1%
    88.4%
    87.4%
    89.2%Gold
    91.5%
    90.9%
    91.9%
    92.3%
    91.2%
    90.3%
    90.3%
    90.1%
    90.8%
    91.5%Concentrate gradesSilver (g/t)
    10,284
    9,912
    10,845
    10,641
    9,917
    10,099
    10,910
    9,280
    10,485
    9,797Gold (g/t)
    106
    88
    130
    104
    108
    79
    99
    61
    78
    79


| | 1. | For 2012, silver equivalent ounces for each metal were
      established using commodity prices of: US$1,680 per oz, US$28 per oz,
      US$0.85 per lb, and US$0.85 per lb; for gold, silver, lead and zinc,
      respectively, and applied to the recovered metal content of the
      concentrates that were produced by the two
operations.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For 2013, metal production at Guanajuato is expected to
increase modestly over 2012, mainly on the expectation of higher gold grades
from increased mining activity in high-grade gold zones.

---

53

PRIMARY EXPLORATION PROPERTY

Great Panthers San Ignacio Project is considered to be a
material property of the Company.

San Ignacio Project

Unless otherwise stated, the information on the San Ignacio
Project in this section of the AIF is based on the technical report entitled
Technical Report on the San Ignacio Project Mineral Resource Guanajuato State,
Mexico prepared by Michael F. Waldegger, P.Geo. of MFW Geoscience Inc. (MFW),
a Qualified Person under NI 43-101 and independent of the Company, and dated
June 25, 2012 (effective date: March 31, 2012) (in this section, the San
Ignacio Technical Report). Portions of the following information are based on
assumptions, qualifications and procedures which are not fully described herein.
Reference should be made to the full text of the Technical Report which is
available for review under the Companys profile on SEDAR located at
www.sedar.com.

Additional information since the date of the Technical Report
has been prepared by Great Panther under the supervision of Robert Brown, Vice
President, Exploration who is a qualified person for the purposes of NI
43-101.

Property Description and Location

The San Ignacio Project consists of a block of seven contiguous
mineral claims totalling 324.7 ha. The property is centered at 21°02 north,
101°19' west (lat/long WGS 84), and is located approximately 8 km due west of
Great Panthers wholly-owned Cata Mine.

Great Panther owns 100% interest in the claims through its
wholly-owned Mexican subsidiary, Minera Mexicana El Rosario SA de CV (MMR).
Surface rights owned by the Company are limited to a small block of ground
around the San Ignacio shaft. Surface access is negotiated with various
individual owners.

The Company has completed a drill program carried out under the
Phase IV permit applied for and granted by SEMARNAT, which is the Mexican
federal agency that oversees environmental permitting of surface work
programs.

Subsequent to the San Ignacio Technical Report, on August 21,
2012, the Company announced it had signed a definitive agreement for the
purchase of a 100% interest in certain surface rights on the property. A total
of 19.4 hectares has been purchased, thereby allowing sufficient space for
access to and construction of a portal for the development of a ramp, for waste
dumps, and for auxiliary infrastructure. With the acquisition of the surface
rights, the Company has proceeded with the application for permits required for
the underground development. Permitting is expected to be completed by the end
of the second quarter of 2013 and construction of a new portal and ramp is
expected to begin shortly after the receipt of permits.

Accessibility, Climate, Local Resources, Infrastructure, and
Physiography

The property area is characterized by rolling hills with
small-incised drainages, which generally provide windows through thin soil cover
to good bedrock exposures.

---

54

Two small villages (San Pedro and Mexiamora) are located within
the property, as are several other isolated homes and small farms. Some of the
property is underlain by cultivated land on which local farmers grow corn.

Access to the property is via a 35-minute drive from the
outskirts of the city of Guanajuato, mostly by gravel road through the towns of
Santa Ana and Cristo Del Rey.

The property is located approximately 8 km northwest of the
city of Guanajuato, in Guanajuato State, Mexico, and approximately 380 km by
road northwest of Mexico City. The city of Guanajuato has a population of nearly
150,000 inhabitants and is serviced by an international airport located on the
outskirts of Silao, a 30-minute drive on a toll road from Guanajuato.

Exploration and mining work can be conducted year-round
uninterrupted by weather. The area has a dry climate with an annual
precipitation of about 600 mm, generally falling between June and October. The
annual mean temperature is 25°C; however, winters can be cool, with lows
approaching 0°C.

Grid power is available to the property, and some buildings and
storage sheds exist on site at the old San Ignacio shaft. Most of the supplies
and labour required for the exploration programs were sourced from the cities of
Guanajuato or Leon. The area has a long history of mining, and there is an ample
supply of skilled personnel and the surface facilities sufficient for a mining
operation.

History

The San Ignacio Project was part of the Guanajuato purchase by
Great Panther in 2005 but due to the Companys focus on the main Guanajuato Mine
Complex, it did not commence any work at San Ignacio until 2010.

Exploration in the Guanajuato mining district dates back to
1548, when silver mineralization was first discovered in La Luz area by Spanish
miners on their way to find their fortune on the newly discovered bonanza veins
in the Mexican state of Zacatecas. Historical documentation has indicated that
mining activity on the La Luz vein system has passed through numerous of boom
and bust cycles. No mining records remain of work undertaken in the area from
1548 until 1793. Research by Great Panther geologists has turned up a number of
maps post-dating 1793, depicting the development and mining from a number of
shafts and adits.

The Sociedad Cooperativa Minera Metalurgica Santa Fe de
Guanajuato (the Cooperative), which began its existence in 1939, amassed what
is now the San Ignacio property.

The Cooperative operated several mines in the Guanajuato Mining
district throughout the latter half of the 20th and into the 21st Century,
including the Guanajuato mine complex at Guanajuato State, Mexico.

On the San Ignacio Property there are 12 known historical
workings including major shafts at San Ignacio, Purísima, Pili, and San Jose de
Garcia. No production figures for these workings are available except for those
relating to the mining by the Cooperative from the San Ignacio shaft.
Cooperative records from 1977 to 2001 indicate that a total of 617,455 tonnes at
a grade of 113g/t Ag and 1.01g/t Au were extracted from the San Ignacio shaft
along a parallel structure to those in the San Ignacio Technical Report, at an average rate of 85 t/d. As there was no
processing facility at San Ignacio, ore was trucked back to the Cata plant in
the main Guanajuato Mine Complex, approximately 20 km by road.

---

55

The Cooperative initiated diamond drilling on the San Ignacio
property in 1979 with drilling from underground workings at the San Ignacio
shaft. Holes from surface were drilled sporadically during the period from 1982
until 1990 and focused on a vein system parallel and to the east of the mineral
resource in the San Ignacio Technical Report.

Great Panther acquired the Guanajuato Mine Complex from the
Cooperative in 2005. The operation included two main properties, a plant,
workshops, and administration facilities, mining infrastructure, equipment, and
certain surface rights (real estate) and leases outside the Guanajuato Mine
Complex, including the leases that define the San Ignacio property.

Great Panther has been recovering material from low-grade
surface stockpiles on the San Ignacio property and is successfully processing it
in the Cata plant.

Geological Setting and Mineralization

The San Ignacio Project lies within La Luz mining camp of the
Guanajuato Mining District, which is located in the southern part of the Mesa
Central physiographic province. The Mesa Central is an elevated plateau of
Cenozoic volcanics and volcaniclastics located in central Mexico. It is bounded
to the north and east by the Sierra Madre Oriental, to the west by the Sierra
Madre Occidental, and to the south by the Trans-Mexican Volcanic Belt.

Rocks within the Mesa Central consist of a Paleocene to
Pliocene sequence of dacite-rhyolite, andesite, and basalt, with related
intrusive bodies and intercalated local basin fill deposits of coarse sandstones
and conglomerates. This Cenozoic volcanic-sedimentary sequence overlies a
package of deformed and weakly metamorphosed Mesozoic submarine mafic volcanics
and turbidites.

Within the Mesa Central, the project is located in the Sierra
de Guanajuato, a northwest-trending anticlinal structure approximately 100 km
long and 20 km wide. The strata within the belt are transected by northwest,
north, east-to-west, and northeast-trending regional scale faults. It is
predominantly the northwest-trending structures, however, which control the
position of mineralization. Normal fault movement along northeast-trending
faults resulted in the downward displacement of certain blocks and the
preservation of strata that was eroded in other areas. The northeast faults are
therefore important locators of mineral camps within the belt.

Cretaceous volcanic rocks of La Luz Basalt underlie the San
Ignacio property. These rocks are part of a volcanic-sedimentary complex that
has various tectonic interpretations, but in general preserves a tectonic
history probably related to northeastward tectonic thrust emplacement. By
contrast, much of the area to the south (e.g., in and around Guanajuato city) is
underlain by a series of Tertiary volcanic rocks that lie unconformably on La
Luz Basalt. The lower Guanajuato Conglomerate is widespread and is of mid-Eocene
to early Oligocene. Later, volcanic rocks were deposited unconformably on the
Guanajuato conglomerate in a caldera setting at the intersection of regional
northeast and northwest mid-Oligocene extensional fracture systems.

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56

Three main northwest-trending precious metal-bearing vein
systems occur in the district: the Sierra, Veta Madre, and La Luz systems.

The San Ignacio property is underlain by a monotonous package
of basalt (Kbas) and andesite (Kanlf) volcanic rocks belonging to the lower
Cretaceous La Luz andesite (Randall R. et al., 1994; Stewart, 2006). The basalt
generally has subtle to well-developed pillow structures that are locally
flattened. In a few localities, inter-pillow hyaloclastite is present and is
characterized by a fine breccia composed of devitrified glass shards in a fine
groundmass. Primary layering and tops-up indicators are generally difficult to
determine from the small outcrops typical of the property, but according to
Stewart (2006), the San Ignacio property stratigraphy is not overturned.

Andesite is generally massive to locally feldspar-phyric to
laminated (very rarely), and was probably formed by accumulation of a series of
extrusive flows and ash falls.

Locally, these volcanic rocks have interbeds composed of
sandstone, siltstone, or fine, pale ash layers (generally sericite-quartz). A
more coarse-grained felsic (possibly dacite) unit is exposed northwest of the
San Jose Mine in the southern part of the property. Where observed, bedding is
generally shallowly dipping.

The mapped distribution of basalt and andesite units is
consistent with a lower unit of pillowed basalt, overlain and broadly in-folded
with andesite. Although Stewart (2006) mapped mostly Kbas across the San Ignacio
property, he also reported that the stratigraphy east of Guanajuato generally
consists of a lower pillowed basalt unit overlain by varied andesite volcanic
rocks, so it is likely that similar stratigraphy is present at San Ignacio.

The mapped distribution of basalt and andesite units is
consistent with open, shallowly plunging, property-scale folding.

Two types of dykes are present on the property, and both are
quite rare. In the northern part of the property, a few fine-grained mafic dykes
are exposed and preserve foliation and fractures similar to the host volcanic
rocks, so these dykes are probably quite early. Fine-grained felsic dykes occur
locally near the Veta Nombre de Dios structure, and are generally moderately
silicified with minor fine-grained pyrite.

The most important phase of mineralization in the Guanajuato
district consists of epithermal silver-gold veins contained within
northwest-trending, Cenozoic-age faults. La Luz structure consists of numerous
mineralized fractures in a northwesterly-trending orientation, which extends for
a known strike of approximately 8 km long. Historically productive veins on the
property include the Veta Nombre de Dios, Veta Melladito, and Veta Plateros.
Other veins identified in Great Panthers drilling are the Veta Intermediate,
and Veta Nombre de Dios 2. Within the veins, mineralization is contained within
tabular veins, vein stockworks, and breccias. The four veins with structural
continuity inferred from surface mapping and diamond drilling from surface have
been defined up to 650 metres along strike and 350 metres down dip. Two of the
veins are very steeply dipping and two are shallowly dipping and are likely
off-shoots of the other veins. The veins are accompanied by hydrothermal
alteration, consisting of argillic, phyllic, silicic, and propylitic facies.

The primary economic components are silver and gold, with
silver the more important of the two. Base metals do not occur in significant
concentrations, and the mineralized material is lead-poor. Economic mineralization consists of fine-grained disseminations of
acanthite and pyrargerite, with accessory pyrite, and relatively minor
sphalerite, and chalcopyrite. Mineral textures in this zone are typically
fracture filling, drusy, and colloform masses.

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57

Average silver grades of the four veins range from 55g/t Ag to
150g/t Ag; average gold grades from 1.2g/t Au to 2.5g/t Au.

The mineral deposit type being investigated on the San Ignacio
property is classic fissure-hosted, low-sulphidation epithermal
gold-silver-bearing veins and stockworks. Epithermal systems form near surface,
usually in association with hot springs, and to depths of around a few hundred
metres below the paleosurface. Hydrothermal processes are driven by remnant heat
from volcanic activity, which in the case of the Guanajuato mining district,
occurred in the middle to late Tertiary. Fluids rising up through fissures reach
an elevation at which the hydrostatic pressure is low enough to allow boiling to
occur. This emplacement model explains why there can be a limit to the vertical
extent of the mineralization, as the boiling and deposition of minerals is
confined to a relatively narrow band of thermal and hydrostatic conditions.

Epithermal type precious metal deposits in the La Luz vein
system and specifically on the San Ignacio property are strongly vertically
controlled and pinch to centimetre scale at surface, associated with weak shear
zones, minor argillic alteration, and weakly anomalous precious metal values.
The mineralized vertical interval typically is 100 metres to 150 metres;
however, it can range from 50 metres to 250 metres.

Exploration

Great Panther has conducted geological and structural mapping,
including sampling of outcrops, and exposures from underground workings.

A total of 147 surface samples and 57 underground samples were
collected by chip and channel sampling. A coarse blanket was laid out to collect
at least 1 kg of broken rock chips falling from the sample site and the rock was
transferred into a clear rock sample bag. Each sample was identified by a
plastic numbered sample tag and the sample bag was labelled with the same
number. The blanket was shaken vigorously in between sample sites to minimize
contamination. Samples were grouped together into rice bags and shipped to the
SGS lab at the Cata plant. Standard chain of custody documents were used
including forms requiring signature upon receipt of shipment by the lab.

Dr. Darcy Baker of Equity Exploration Consultants completed
structural mapping and logging of one diamond core hole in February 2011.

The exploration work has confirmed that the top of the
mineralized epithermal system is below surface, estimated at approximately 2,350
masl. This vertical limit was indicated on longitudinal sections from the
historical operations of the Cooperative on veins on the San Ignacio property,
and from longitudinal sections of deposits on an adjacent property owned by
Endeavour Silver Corp. The strong vertical control on mineralization is
characteristic of the area and the mineralized intervals are typically 100
metres to 150 metres in vertical range; however, it can range from 50 metres to
250 metres.

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58

Detailed geological mapping, structural geological studies,
outcrop sampling, and re-sampling of old underground workings are ongoing to
highlight additional priority targets along the 4 km of prospective structures.
Drilling completed since close of the database included in the Technical Report
consisted of 6,403 metres drilled from surface in 31 holes on the San Francisco
de Pili, Purisma, and San Antonio mineral claims.

Drilling

The drilling program completed in March 2012 successfully
delineated four veins in the northern portion of the property between grid line
450N and 1100N. The four veins with structural continuity Inferred from diamond
drill hole intersections, and to some extent surface mapping, have been
delineated up to 650 metres along strike and 350 metres down dip. Two of the
veins are very steeply dipping and two are shallowly dipping and are likely
off-shoots of the other veins.

To the south of line 450N there are historical workings and
drilling in this area is not included in the San Ignacio Technical Report. One
drill hole (ESI11-039) on section 450N intersected a void, which was interpreted
to represent the northern extent of these historical workings.

Overall, the core recovery was excellent with 99% of all
samples having recoveries greater than 85%. There are no other drilling or
sampling factors that could materially influence the accuracy and reliability of
the results.

Veta Melladito is a steeply dipping narrow vein with true width
ranging 0.25 metres to 4.5 metres. It has been delineated to a maximum of 650
metres along strike and 350 metres below surface. The structure is open at depth
and along strike; however, the strongest mineralization has been observed in a
core zone 250 metres in strike length and from surface to 150 down dip. The
mineralization is possibly open to the south nearer to surface.

Veta Intermediate is also steeply dipping and narrow with true
width ranging 0.25 metres to 8.5 metres. It has been delineated a maximum of 400
metres along strike and 350 metres below surface. It is open at depth and along
strike with strong mineralization observed in all directions.

Veta Nombre de Dios 1 is shallowly dipping at 45 to 60 degrees
to the southwest and also narrow with true width ranging 0.25 metres to 4
metres. It has been delineated a maximum of 400 metres along strike and 180
metres down dip. The vein is open to the south. At depth, Nombre de Dios 1
appears to intersect Veta Intermediate and is therefore limited in its potential
down dip extent. To the north it terminates at line 850N where it may continue
in Nombre de Dios 2 with a 40 metres offset to the east.

Veta Nombre de Dios 2 is shallowly dipping at 45 degrees to the
southwest and also narrow with true width ranging 0.25 metres to 4 metres. It
has been delineated a maximum of 200 metres along strike and 100 metres down
dip. The vein is open to the north. To the south it terminates at line 900N
where it may continue in Nombre de Dios 1 with a 40 metres offset to the
west.

All drill hole data was stored in Great Panthers proprietary
DataShed database (the database). The database contents were backed up every
two hours and the database copied daily to a master database in Great Panthers
head office.

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59

The contractor BD Drilling of Guadalajara, Mexico, drilled all
diamond core holes at San Ignacio.

Drill hole collar locations were determined using a total
station instrument and the location data was uploaded directly into the
database.

Bore hole deviation surveys were completed at 50 metres
intervals using a single shot instrument by Reflex. Survey data was recorded
onto paper logs by the driller or drillers helper.

Drill core was transported twice per day from the drill site by
pick-up truck to the core storage and logging facility located at the companys
Guanajuato Mine plant site, which is gated, guarded, and secure.

Core boxes were laid out by field technicians onto angled
tables suitable for logging. The technicians fitted the core pieces together and
cleaned the core surface in preparation for logging by the geologist. Depth
markers were checked for proper labelling, and the boxes were labelled with the
drill core intervals. The technicians also completed measurements of core
recovery and rock quality designation (RQD) and recorded the data onto paper
logs.

Geological logging was completed by the geologists and recorded
directly into a local database using LogChief Software installed on Toughbook
computers for later upload to the database.

Sample intervals for assaying were marked on the core boxes by
the geologists. Sample lengths were generally determined by mineralogical or
lithological characteristics and the protocol is for maximum sample lengths to
be 1.5 metres and the minimum length to be 0.5 metres. Field technicians then
photographed the core.

The field technician selected samples for bulk density
measurements from several locations within the mineralized intervals, usually
one density sample per assay sample interval. The water immersion procedure was
followed and the data was recorded onto paper logs. The samples were returned to
the core box after the tests were completed.

Core samples for assaying were collected by the field
technicians. Sample interval data was recorded in a numbered ticket book. Each
ticket had three portions: a stub and two tags. All portions of the sample
ticket shared the same unique identification number. The two tag portions of
each ticket were detached from the stub and stapled to the core tray at the
start of the sample interval. The drill core was then cut using a diamond-tipped
blade with clean water being used to lubricate and cool the blade. Half of the
sample interval was placed inside a clear plastic rock sample bag labelled with
the same ID as the ticket number. One tag was then removed from the core box and
inserted into the sample bag along with the cut sample. The remaining stub,
retained in the sample book, was completed with details such as drill hole ID
and depth interval. The bag was then sealed and 25 samples were inserted into
rice sacks and delivered with other samples from the same hole. One sample
submission sheet per hole accompanied the samples to the on-site SGS assay
laboratory. Samples were usually sent every other day.

Assay certificates were received directly from SGS laboratory
via email. Site geologists reviewed quality control sample results for out of
tolerance failures prior to merging the assay results with sample intervals in
the database.

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60

The first nine diamond core holes at San Ignacio (ESI10-001 
ESI11-009) were completed under the management of the Guanajuato Mine Geology
Department. Mine geologists logged and sampled the core. Following an internal
audit by the company, which identified deficiencies in core handling and
sampling procedures, the responsibility for diamond drilling and exploration at
San Ignacio changed to Great Panthers exploration department. The exploration
staff re-logged and re-sampled all nine drill holes. The remaining drill holes
were completed under the management and direction of the exploration
department.

Sampling and Analysis and Security of Samples

Sample preparation prior to dispatch to the analytical
laboratories consisted of splitting the sample in half by cutting the core using
a rock saw.

Quality control measures included the insertion of quarter-core
duplicates, standard reference materials, and blanks into the sample stream.

Chain of custody was established upon sample collection with
the use of unique sample ID, documentation of samples per shipment to the lab,
and sign-off forms for receipt of samples by the laboratory.

Prior to dispatch, the samples were stored within the core
storage and logging facility located at the companys Guanajuato Mine plant
site, which is a gated, guarded, and secure compound. The site security is of a
reasonable standard, consistent with common practical industry standards.

Most of the analytical work was completed by the SGS Lakefield
Laboratory (SGS) located on the company-owned Cata mine site.

Sample preparation consisted of crushing through a two-stage
crusher to 10 mesh and then split to a 200g sub-sample for pulverizing to 98%
passing 200 mesh. Samples are analyzed by fire assay with an AA finish using a
30 g aliquot, and any that report greater than 10g/t Au or 300g/t Ag are
reanalyzed by fire assay using a gravimetric finish. The laboratory can also
perform AAS determinations for As, Cu, Pb, Sb, and Zn.

Samples from holes ESI11-014 to 017 were sent to ALS Chemex in
Guadalajara for sample preparation and then for analysis in Vancouver, Canada.
Gold and silver was determined by fire assay using a 30g aliquot and gravimetric
finish (ALS method ME-GRA21) and a 33 element ICP package was also selected
using a four acid near-total digestion (ALS method ME-ICP61).

The SGS laboratory manager conducted routine Quality
Assurance/Quality Control (QA/QC) tests and instrument calibrations, and
maintains a database of the results. SGS Group conducts a monthly round robin
comparison against three other laboratories, and Laboratory Quality Services
International conducts monthly checks as well.

Great Panthers geological personnel inserted quarter-core
duplicates, standard reference material, and blanks into the sample stream each
at a frequency of one in twenty samples. Analytical results of control samples
were reviewed immediately upon receipt of the assay certificates. A sample batch
was rejected if any blank returned a result greater than 0.05g/t Au or 3g/t Ag,
or if a standard returned a result greater than three standard deviations from the expected mean or two
sequential results greater than two standard deviations away from, both above or
both below, the mean. Batches were also re-run if the field duplicate grades
were greater than 10% from the original sample grade.

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61

A total of 11 failures due to out of tolerance assay values
were observed and corrective actions were followed. The pulps of the batches in
question were returned to the laboratory for re-assay, with new standards and
blanks inserted. A reasonable correlation between the silver and gold grades of
the original pulps and re-assayed pulps provided confidence in the original
silver and gold values and no failures with respect to the additional inserted
standards and blanks were observed.

The standard reference materials (SRM) used were sourced from
two 100kg bulk samples of material from Great Panthers Cata Mine in Guanajuato
with expected values, which reflect grade ranges present on the property. SRM
GTS03 was produced from one of the bulk samples by SGS in Durango, and SRM GTS04
by Skyline laboratories in Tucson, Arizona.

The blank material was sourced from barren Rhyolite at roadside
cuts on the Guanajuato to San Miguel de Allende route in Guanajuato State,
Mexico. The material was assayed to ensure values of gold and silver were
present in trace amounts only and then packaged in small bags of 60 g each.

Quarter core duplicate sample results were compared with the
original quarter core sample results to see if the two results fall within 10%
of each other. A total of nine failures lead to sample batch re-runs and the new
values were accepted as final if the new values were within 10%; otherwise, the
original values were used since the perceived problem persisted. This is because
the duplicate sample may actually contain different mineralization and since
both values may be equally valid results, the company used the first pass the
post approach.

Mr. Waldegger is of the opinion that the results of the
analytical procedures for sample grade determination are suitable for use in
resource estimation.

Samples approximately 10 cm in length were selected from whole
or half-core (NQ or HQ) by the field technician and returned to the core box
after bulk density determinations were completed.

The testwork was completed on site by field technicians and
followed the water submersion method on air-dried samples (not in an oven).
Non-friable, non-porous core samples were weighed in air and then weighed while
suspended from the scale in a basket, which was submerged in water. The raw
information was recorded on paper logs.

Although no formal QC program was in place to provide
confidence in the precision or accuracy of the results, the results are within
the range of expected density values for the material tested. Mr. Waldegger
recommends duplicate samples selected at a standard frequency be sent to an
external laboratory for testing and the scale monitored regularly using a
standard weight to add confidence to the dataset.

Mr. Waldegger is of the opinion that the bulk density testwork
was conducted using appropriate procedures and is reliable for resource
estimation.

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62

Mineral Resource Estimates

Only mineral resources have been determined for the San Ignacio
Project and no estimate of reserves on the property has been completed for the
San Ignacio Technical Report.

The mineral resource estimates for the San Ignacio project are
tabulated below. The effective date of the estimates is March 31, 2012.

San Ignacio Measured Mineral Resources  March 31,
      2012 (Cut-off 125 g/t Ag eq)Tonnage (Kt)
    Ag (g/t)
    Ag (oz)
    Au (g/t)
    Au (oz)
    Ag Eq (oz)Inferred
    826
    121
    3,205,000
    2.28
    60,700
    6,894,000


The geological interpretation and resource modelling was
carried out using 3D geological modelling software provided by Gemcom Software
International Inc. (Gemcom) of Vancouver. Modelling was completed using GEMS
Version 6.3. MFW received drill hole data from Great Panther for 73 diamond
drill holes. No surface or underground rock samples were used in the resource
estimate. It is reasonable to assume that the continuity of the veins has been
demonstrated sufficient to support the Inferred category of resources through
Great Panthers drilling on sections spaced 50 metres apart. Therefore, groups
of blocks generally falling within 50 metres of a composite were selected on
long section for each domain and classified as Inferred. Blocks beyond the
outlined regions were left unclassified.

Equivalent grades are commonly used to simplify the problem of
mineral inventory tabulation in polymetalic deposits. An equivalent grade is one
that is a combination of two or more grade variables in an arbitrary manner to
produce a single variable for reporting tonnes and grades above the equivalent
grade cutoff. At San Ignacio, the silver equivalent grade was calculated as a
function of gold and silver grades in the block model and based on the value
ratio of 60.8 to 1 (Ag to Au). The ratio was being used at Great Panthers
underground operation at the Cata Mine in Guanajuato State, and is considered
applicable for use in this estimate. The ratio considers metallurgical
recoveries. The equation used for silver equivalent grade was: Ag Equivalent
grade = Ag grade + (Au grade x 60.8) .

Mining Operations

As the San Ignacio Project is a satellite of the Guanajuato
Mine Complex (20 kilometres by road), any mineralization extracted from there
will be processed at the Cata plant. Mining operations at the Cata plant are
described in the Guanajuato Mine Complex section of this document.

Exploration and Development

Planned costs for 2013 are approximately $2.0 million for
exploration. The Company has applied for the permits required for underground
development and expects receive permits by the end of the second quarter of 2013
and begin construction of a portal and ramp shortly thereafter.

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63

Other Exploration Properties

(1) Santa Rosa Project

Location and Accessibility

The Santa Rosa property consists of four mining concessions
located approximately 10 to 15 kilometres northeast of the city of Guanajuato
and is accessible by paved roads from Guanajuato. The city of Guanajuato is 380
kilometres northwest of Mexico City in central Mexico. Guanajuato is situated in
the Central Plateau of Mexico in the mountains of Sierra de Guanajuato at
elevations ranging from 1,600 to 2,200 metres.

Excellent access is availed to Guanajuato with an international
airport 30 minutes to the west near Silao/Leon. Toll freeways skirt the city
linking it with Leon, Guadalajara, and Mexico City. All of the facilities of the
Guanajuato mine are accessed from city streets.

The municipality of Guanajuato is on an electrical power grid
and has telephone services provided by TelMex. Water and drainage systems are
also present.

History

On July 18, 2011, the Company announced the acquisition of four
mining concessions, totalling 1,514 hectares, approximately 10 to 15 kilometres
northeast of Guanajuato (collectively called the Santa Rosa Project). The four
claims were purchased from Minera Blanca Alicia, S.A. de C.V., a private Mexican
company, for US$1.5 million with 50% payable on signing of the purchase
agreement and 50% on the registration of the contract with the Direccion General
de Minas (Mexico), which is now complete. A royalty of 1.3% is payable from ore
produced from the four claims.

Geology and Mineralization

The Company completed considerable due diligence work on the
Santa Rosa claims prior to the acquisition. Multiple veins with argillic
alteration and erratic silver and gold values have been identified.

Exploration History

The Santa Rosa project is within the Sierra vein system, a
parallel vein system to the Veta Madre at Guanajuato Mine. The Sierra vein
system has seen exploration and exploitation over the last 400 years, including
the present day exploitation of gold and silver from the El Cubo Mine (located
southeast of the Santa Rosa project) owned by Endeavour Silver Corp.

Drilling

After the completion of a drill program (five drill holes
totaling 1,653 metres) in the first quarter of 2012, no further drilling has
been completed at Santa Rosa. A reassessment of the property and regional
geology, involving geological mapping and sampling will be undertaken in order
to better understand the structural controls on mineralization before planning
another drill program.

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64

Sampling and Analysis and Security of Samples

All sampling and analytical work is conducted by employees,
contractors, or designates of Great Panther. The samples are in the custody of
Great Panther personnel or stored in a secure area within the Guanajuato Mine
Complex site at all times. The site security is of a reasonable standard,
consistent with common practical industry standards. Sampling on the Santa Rosa
project consisted of hammer and chisel chipping surface rock exposures, and
diamond drill coring.

Drill core sample preparation prior to dispatch to the
analytical laboratory consisted of splitting the sample in half by cutting the
core using a rock saw.

Quality control measures included the insertion of quarter-core
duplicates, standard reference materials, and blanks into the sample stream.

Chain of custody was established upon sample collection with
the use of unique sample ID, documentation of samples per shipment to the lab,
and sign-off forms for receipt of samples by the laboratory.

Prior to dispatch, the samples were stored within the core
storage and logging facility located at the companys Guanajuato Mine Complex
plant site, which is a gated, guarded, and secure compound. The site security is
of a reasonable standard, consistent with common practical industry
standards.

The analytical work was completed at the Company-owned
laboratory, independently operated by the SGS Group, located on the
Company-owned Cata mine site.

The Cata mine site laboratory is equipped to do fire assay and
atomic absorption spectroscopy (AA). Samples are prepared on site, run through a
two-stage crusher and then split to a 200g Sub-sample for pulverizing to 98%
passing 200 mesh. Samples are analyzed by fire assay with an AA finish using a
30 gram aliquot, and any that report greater than 10g/t Au or 300g/t Ag are
reanalyzed by fire assay using a gravimetric finish. The laboratory can also
perform determinations for arsenic, copper, lead, zinc, and antimony and these
elements were analyzed for drill hole cores and surface rock samples from Santa
Rosa.

Robert Brown, Vice President, Exploration and the Companys
Qualified Person (QP) inspected the laboratory and found it to be orderly and
appropriately configured for the analytical work required. The assay protocols
are conventional methods, commonly used in the industry, and a reasonable level
of QA/QC monitoring is applied to assure that the results are accurate.

Mineral Resource and Mineral Reserve Estimates

There are no known mineral reserves or resources estimated for
the property. The Company commenced exploratory drilling on the property in
2012.

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65

Exploration and Development

In 2013, a reassessment of the property and regional geology
involving geological mapping and sampling will be undertaken in order to better
understand the structural controls on mineralization before planning another
drill program.

(2) El Horcon Project

Location and Accessibility

The El Horcon property consists of 17 contiguous mining
concessions located approximately 60 kilometres northwest of the city of
Guanajuato and is accessible by paved and gravel roads from Guanajuato. The city
of Guanajuato is 380 kilometres northwest of Mexico City in central Mexico.
Guanajuato is situated in the Central Plateau of Mexico in the mountains of
Sierra de Guanajuato at elevations ranging from 1,600 to 2,200 metres.

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

History

On September 5, 2012, the Company announced its purchase of a
100% interest in the El Horcon Silver-Gold Project in Jalisco State, Mexico from
Compañía Minera El Dore, S.A. de C.V., a private Mexican company, for total
consideration of US$1,600,000 in cash. El Horcon covers 7,908 hectares in 17
contiguous mining concessions and is located 60 kilometres northwest of Great
Panther's Guanajuato Mine Complex.

Geology and Mineralization

Multiple epithermal type silica veins have been geologically
mapped on the El Horcon project. These veins occur over a strike length of
>4km, and are oriented north-northwest with steep to modest west dips and
east-northeast with steep south dips. Gold and silver mineralization is
associated with pyrite, galena, sphalerite and chalcopyrite particularly in the
Daimantillo, San Guillermo, and Los Ratones veins. The veins are hosted either
in a batholith of porphyritic granodiorite or the enclosing Esperanza or La Luz
Formation sediments.

Exploration History

The El Horcon project is northwest of the La Luz vein system, a
parallel vein system to the Veta Madre at Guanajuato Mine. Formal mining and
milling at El Horcon took place by the Jesuits in the sixteenth and seventeenth centuries, since then small scale mining and
exploration has taken place, sporadically, up to 2009. This would include
shallow mining along the Diamantillo and San Guillermo veins  which will be the
focus of the Companys 2013 drill program. El Horcon is a historic mining
operation but the extent of past production is unknown. The property hosts
similar silver-gold mineralized epithermal veins to those observed at Great
Panther's existing operations. El Horcon hosts nine known veins, with the
Diamantillo vein traceable on surface for more than four kilometres. Several
underground workings exist, the most extensive of which is the Diamantillo
Tunnel.

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66

Chip channel sampling by a previous operator, Exmin Resources
Inc. (2006 - 2009), returned average grades for the Diamantillo Tunnel of
1.97g/t Au and 99g/t Ag (217g/t Silver Equivalent (Ag Eq) using a 60:1 ratio)
over a strike length of 80 metres. For the San Guillermo vein at the La Luz
workings (300 metres to the northwest of the Tunnel) sampling returned 3.70g/t
Au and 56g/t Ag (278g/t Ag Eq) over a strike length of 55 metres. The
Diamantillo vein at the El Horcon workings (45 metres to the northwest of the
Tunnel) returned average grades of 1.50g/t Au and 20g/t Ag (110g/t Ag Eq).

Approximately 6,500 metres of diamond drilling were completed
by Exmin and then-partner Hochschild Mining plc. The most representative diamond
drill hole to the Diamantillo Tunnel, HOR-07-01, intercepted 3.60 metres at
2.88g/t Au and 61g/t Ag (234g/t Ag Eq), 45 metres directly below the tunnel.

Great Panthers sampling to date is consistent with these
historic results. Preliminary metallurgical testing at the Companys facilities
in Guanajuato shows the El Horcon mineralization to be compatible with the
existing mill feed. While further testing is required, it is anticipated that
recoveries from El Horcon should be approximately 92% for gold and 80% for
silver.

Present-day exploitation of gold and silver from the Bolanitos
and Lucero Mine (located southeast of the El Horcon project) in the La Luz
district is ongoing by Endeavour Silver Corp.

Sampling and Analysis and Security of Samples

All sampling and analytical work is conducted by employees,
contractors, or designates of Great Panther. The El Horcon samples are in the
custody of Great Panther personnel or stored in a secure area within the
Guanajuato Mine Complex site at all times. The site security is of a reasonable
standard, consistent with common practical industry standards. Sampling on the
El Horcon project consisted of hammer and chisel chipping of surface rock and
tunnel exposures of mineralized structures.

Chain of custody was established upon sample collection with
the use of unique sample ID, documentation of samples per shipment to the lab,
and sign-off forms for receipt of samples by the laboratory.

Quality control measures included the insertion of quarter-core
duplicates, standard reference materials, and blanks into the sample stream.

Prior to dispatch, the samples were stored within the core
storage and logging facility located at the companys Guanajuato Mine Complex
plant site, which is a gated, guarded, and secure compound. The site security is
of a reasonable standard, consistent with common practical industry
standards.

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67

The analytical work was completed at the Company-owned
laboratory, independently operated by the SGS Group, located on the
Company-owned Cata mine site.

The Cata mine site laboratory is equipped to do fire assay and
atomic absorption spectroscopy (AA). Samples are prepared on site, run through a
two-stage crusher and then split to a 200g Sub-sample for pulverizing to 98%
passing 200 mesh. Samples are analyzed by fire assay with an AA finish using a
30 gram aliquot, and any that report greater than 10g/t Au or 300g/t Ag are
reanalyzed by fire assay using a gravimetric finish. The laboratory can also
perform determinations for arsenic, copper, lead, zinc, and antimony and these
elements were analyzed for drill hole cores and surface rock samples from El
Horcon.

Robert Brown, Vice President of Exploration, and Company
Qualified Person (QP) inspected the laboratory and found it to be orderly and
appropriately configured for the analytical work required. The assay protocols
are conventional methods, commonly used in the industry, and a reasonable level
of QA/QC monitoring is applied to assure that the results are accurate.

Mineral Resource and Mineral Reserve Estimates

There are no known mineral reserves or resources estimated for
the property. The Company commenced property scale geological mapping, and
surface and underground rock sampling along the known veins on the property in
the fourth quarter of 2012.

Exploration and Development

At the El Horcon Project exploration expenditures of
approximately $600,000 are planned for 2013 including approximately 3,000 metres
of surface drilling in the Diamantillo and San Guillermo veins.

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68

DIVIDENDS

Holders of the Companys common shares are entitled to receive
such dividends as may be declared from time to time by the board of directors,
in its discretion, out of funds legally available for that purpose. The Company
intends to retain future earnings, if any, for use in the operation and
expansion of its business and does not intend to pay any cash dividends in the
foreseeable future.

DESCRIPTION OF CAPITAL STRUCTURE

The Companys authorized share capital consists of an unlimited
number of common shares without par value, an unlimited number of Class A
preferred shares without par value issuable in series, and an unlimited number
of Class B preferred shares without par value issuable in series. As at December
31, 2012, the issued share capital consisted of 137,860,052 common shares
(December 31, 2011 -137,408,912 common shares). No Class A preferred shares or
Class B preferred shares are issued or outstanding.

Common Shares

Subject to the rights of the holders of the Class A preferred
shares and the Class B preferred shares of the Company, holders of common shares
of the Company are entitled to dividends if, as and when declared by the
directors. Holders of common shares of the Company are entitled to one vote per
common share at meetings of shareholders except at meetings at which only
holders of a specified class of shares are entitled to vote. Upon liquidation,
dissolution or winding-up of the Company, subject to the rights of holders of
the Class A preferred shares and the Class B preferred shares, holders of common
shares of the Company are to share ratably in the remaining assets of the
Company as are distributable to holders of common shares. The common shares are
not subject to redemption or retraction rights, rights regarding purchase for
cancellation or surrender, or any exchange or conversion rights.

Class A Preferred Shares

Class A preferred shares may be issued from time to time in one
or more series, and the directors may fix from time to time before such issue
the number of Class A preferred shares of each series and the designation,
rights and privileges attached thereto including any voting rights, dividend
rights, redemption, purchase or conversion rights, sinking fund or other
provisions. The Class A preferred shares rank in priority over common shares and
any other shares ranking by their terms junior to the Class A preferred shares
as to dividends and return of capital upon liquidation, dissolution or winding
up of the Company or any other return of capital or distribution of the assets
of the Company.

Class B Preferred Shares

Class B preferred shares may be issued from time to time in one
or more series, and the directors may fix from time to time before such issue
the number of Class B preferred shares of each series and the designation,
rights and privileges attached thereto including any voting rights, dividend
rights, redemption, purchase or conversion rights, sinking fund or other
provisions. The Class B preferred shares rank in priority over common shares and
any other shares ranking by their terms junior to the Class B preferred shares as to dividends and return of capital upon
liquidation, dissolution or winding up of the Company or any other return of
capital or distribution of the assets of the Company.

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69

MARKET FOR SECURITIES

The Companys common shares trade on the Toronto Stock Exchange
(TSX) and the NYSE MKT, trading under the symbols GPR and GPL respectively.
The Companys CUSIP number is 39115V 101.

TRADING PRICE AND VOLUME

The following table sets forth the price ranges in Canadian
dollars and trading volume of the common shares of the Company as reported by
the Toronto Stock Exchange for the periods indicated:

Period
    Open $
    High $
    Low $
    Close $
    VolumeDecember 2012
    1.56
    1.74
    1.48
    1.54
    2,279,400November 2012
    1.99
    2.02
    1.61
    1.71
    2,523,300October 2012
    2.31
    2.32
    1.83
    1.99
    3,760,100September 2012
    2.01
    2.40
    1.95
    2.26
    4,619,400August 2012
    1.63
    2.04
    1.56
    1.94
    3,091,900July 2012
    1.78
    1.89
    1.56
    1.64
    1,847,900June 2012
    1.84
    2.18
    1.62
    1.73
    4,079,600May 2012
    2.25
    2.28
    1.53
    1.81
    4,326,500April 2012
    2.23
    2.34
    1.81
    2.23
    3,615,900March 2012
    2.68
    2.74
    2.08
    2.24
    6,379,300February 2012
    2.71
    2.91
    2.36
    2.65
    7,217,300January 2012
    2.08
    2.80
    2.08
    2.68
    6,701,900


The following table sets forth the price ranges in US dollars
and trading volume of the common shares of the Company as reported by the NYSE
MKT for the periods indicated:

Period
    Open US$
    High US$
    Low US$
    Close US$
    VolumeDecember 2012
    1.70
    1.77
    1.38
    1.53
    11,229,800November 2012
    2.00
    2.02
    1.60
    1.72
    9,428,200October 2012
    2.33
    2.37
    1.85
    2.00
    10,227,800September 2012
    2.01
    2.48
    1.97
    2.30
    19,045,500August 2012
    1.66
    2.07
    1.57
    1.97
    12,245,800July 2012
    1.72
    1.82
    1.53
    1.66
    8,049,500June 2012
    1.78
    2.10
    1.55
    1.67
    12,692,400May 2012
    2.20
    2.30
    1.51
    1.78
    16,174,000April 2012
    2.29
    2.36
    1.82
    2.18
    12,600,300March 2012
    2.70
    2.78
    2.08
    2.25
    16,403,100February 2012
    2.74
    2.94
    2.35
    2.70
    20,044,500January 2012
    2.07
    2.80
    2.05
    2.68
    19,030,700


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70

ESCROWED SECURITIES

As at December 31, 2012, there were no escrowed securities or
securities subject to contractual restriction on transfer.

DIRECTORS AND OFFICERS

The information below sets forth the names, positions or
offices held with the Company, province/state and country of residence, and
principal occupation of the directors and executive officers of the Company as
at the date of the AIF. In addition, the principal occupations of each of the
Companys directors and executive officers within the past five years are
disclosed in their brief biographies.

Name, Position and City, Province and Country
      of Residence
    Principal Occupation or
      Employment for Past 5 years1
    Period as a Director of the
      Company
    No. and Class of
      Securities2
    Percentage of
      Class3ROBERT A. ARCHER, P.Geo. Okanagan
      Falls, BC Canada Chief Executive Officer and Director
      Non-Independent
    Chief Executive Officer of the 
      Company from
      2004 to present; President of the Company from 2004 to 2012;
      President, Chief Executive Officer of Cangold Limited; President
      of Platoro Resource Corp.; Non-Executive Director of Altair
      Ventures Incorporated.
    April 27, 2004 to present
    Common 1,251,300 Stock Options
      425,000
    Less than 1%R.W. (BOB) GARNETT, CA,
      ICD.D4 Richmond, BC, Canada Chairman
      and Director Independent
    Commissioner, Financial 
      Institutions
      Commission May 2012 to current; Director of VRX Worldwide Inc.
      since 2009; Director and Chief Financial Officer of Bitzio, Inc.
      since August 2011; President of Sagebrush Golf and Sporting
      Club September 2012 to current and CFO 2006 to 2012; Director
      of the South Coast British Columbia Transportation Authority
      (TransLink) from January 2008 to December 2011; President of PDG
      Management Partners, Inc. from April 1998 to October 2010;
      Director of Central 1 Credit Union from 2009 to 2010; Director of
      Coast Capital Savings Credit Union from 1984 to 2009.
    May 3, 2011 to present
    Common Nil Stock Options
      300,000
    0%


___________________

|1 | The information as to principal occupation and shares
      beneficially owned has been furnished by the respective
  individuals.
|- | ----------------------------------------------------------------------------------------------------------------------------------
|2 | The security holdings of the respective individuals are
      current as of December 31, 2012.                                    
|3 | Based upon 137,860,052 common shares of the Company
      issued and outstanding as of December 31, 2012.                         
|4 | Chair of the Audit Committee and member of the Nominating
      & Corporate Governance and Compensation
Committees.               

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71

Name, Position and City, Province and Country
      of Residence
    Principal Occupation or
      Employment for Past 5 years1
    Period as a Director of the
      Company
    No. and Class of
      Securities2
    Percentage of
      Class3KENNETH W. MAJOR, P.Eng.5 Maple Ridge, BC, Canada Director
      Independent
    Director of the Company from 
      2011 to
      present; director of Cangold Limited from December 2011 to
      present; Independent mineral processing consultant for precious
      and base metals mining, KWM Consulting Inc. from 2006 to present;
      associate and project manager with HATCH Engineers from 1999 to
      2006.
    March 17, 2011 to present
    Common Nil Stock Options
      200,000
    0%PETER JOHN JENNINGS,
      CFA6 West Vancouver, BC, Canada
      Director Independent
    Senior Client Partner, Korn/Ferry
      
      International since 2012; Chief Operating Officer of Anthem
      Properties Group from 2010 to 2012; Senior Director and Head
      of Mid-Market Investment Banking, Western Canada for CIBC from
      2003 to 2010.
    June 28, 2012 to present
    Common Nil Stock Options
      200,000
    0%MARTIN B. CARSKY, CA, ICD.D North
      Vancouver, BC, Canada President
    President of the Company from 
      2012 to
      present; Executive Vice President and Chief Financial Officer of
      the Company from 2011 to 2012; Chief Executive Officer of
      Con-Space Communications Ltd. from 2009 to 2011; Corporate
      Director and self-employed financial consultant from 2008 to 2009;
      Executive Vice President of Anthem Capital Corp. from 2006 to
      2008; CEO and Director of Cryopak Industries Inc. from 2004 to
      2006. Director of the Company, Chairman of the Audit Committee and
      a member of the Compensation Committee and the Nominating and
      Corporate Governance Committee from 2009 through 2011 and Lead
      Director of the Company from January 2011 through May 2011.
    February 9, 2009 to May 3, 2011
    Common Nil Stock Options
      450,000
    0%


___________________

|5 | Chair of the Safety, Health & Environment Committee
      and member of the Audit and Nominating & Corporate Governance
      Committees.
|- | -----------------------------------------------------------------------------------------------------------------------------------------
|6 | Chair of the Compensation Committee and member of the
      Audit and Safety, Health & Environment
Committees.                           

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72

Name, Position and City, Province and Country
      of Residence
    Principal Occupation or
      Employment for Past 5 years7
    Period as a Director of the
      Company
    No. and Class of
      Securities8
    Percentage of
      Class9JIM A. ZADRA, 
      CAVancouver, BC, Canada Chief Financial Officer and
      Corporate Secretary
    Chief Financial Officer and 
      Corporate
      Secretary of the Company from 2012 to present; Vice President,
      Finance of the Company from 2011 to 2012; Chief Financial Officer
      and Corporate Secretary of DDS Wireless International Inc. from
      2008 to 2011; Vice President of Finance, North America, at
      Sophos, from 2003 to 2008.
    N/A
    Common Nil Stock Options
      250,000
    0%RHONDA M. BENNETTO Vernon, BC,
      Canada Vice President, Corporate Communications
    Vice President, Corporate 
      Communications of
      the Company from 2012 to present; Vice President Investor &
      Corporate Communications TVI Pacific Inc. from 2009 to 2012;
      Senior Director Investor Communications New Gold Inc. from
      2007 to 2008; Present board member of Canadian Investor Relations
      Institute; Present Chairman, Public Relations Advisory Mount Royal
      University.
    N/A
    Common Nil Stock Options
      150,000
    0%CHARLES P. BROWN Victoria, BC, Canada
      Senior Vice President Corporate Development
    Senior Vice President, Corporate
      
      Development of the Company from July 2012 to present; Chief
      Operating Officer of the Company from 2007 to 2012.
    N/A
    Common 448,000 Stock Options
      450,000
    Less than 1.0%ROBERT F. BROWN, P.Eng. West
      Vancouver, BC, Canada Vice President, Exploration
    Vice President, Exploration of 
      the Company
      from 2004 to present; Director of Cangold Limited from 2007 to
      present, President and director of Finlay Minerals Limited from
      1999 to present.
    N/A
    Common Nil Stock Options 200,000
    0%


____________________

|7 | The information as to principal occupation and shares
      beneficially owned has been furnished by the respective
  individuals.
|- | ----------------------------------------------------------------------------------------------------------------------------------
|8 | The security holdings of the respective individuals are
      current as of December 31, 2012.                                    
|9 | Based upon 137,860,052 common shares of the Company
      issued and outstanding as of December 31,
2012.                         

---

73

Name, Position and City, Province and Country
      of Residence
    Principal Occupation or
      Employment for Past 5 years10
    Period as a Director of the
      Company
    No. and Class of
      Securities11
    Percentage of
      Class12DAVID R. ASHERAthol, Idaho, USA
      Vice President, Technology Services
    Vice President, Technology 
      Services of the
      Company from November 2011 to present. From 1999 to 2009, several
      roles at Coeur dAlene Mines Corporation, including Director
      of Corporate Development and Enterprise Systems Manager.
    N/A
    Common Nil Stock Options
      150,000
    0%FRANCISCO RÁMOS SÁNCHEZ
      Queretaro, Qro, Mexico Vice President, Business
      Development
    Vice President, Business 
      Development of the
      Company from 2007 to present; Vice President, Operations of the
      Company from 2004 to 2007. Chief Operating Officer and
      Director of Santacruz Silver Mining Ltd.
    N/A
    Common 554,275(13)Stock Options
      221,000
    Less than 1.0%ENRIQUETA HERNANDEZ DOMINGUEZ
      Leon, Guanajuato, Mexico Vice President, Accounting
      and Administration (Mexico)
    Vice President, Accounting and
      
      Administration (Mexico) from 2010 to present; Regional
      Controller of the Companys Mexican operations from 2009 to
      2010; Subsidiary Accountant for West Timmins Mining Company
      from October 2007 to June 2009.
    N/A
    Common Nil Stock Options 50,000
    0%


CEASE TRADE ORDERS, BANKRUPTCIES, PENALTIES OR
SANCTIONS

Other than as disclosed herein, no director or executive
officer of the Company nor a personal holding company of any of them:

(a) is, at the date of this AIF or has been within the 10 years
before the date of the AIF, a director, chief executive officer or chief
financial officer of any company (including the Company), that while that person
was acting in that capacity,

(i) was the subject of a cease trade
order or similar order or an order that denied the relevant company access to
any exemption under securities legislation, that was in effect for a period of
more than 30 consecutive days; or

__________________

|10 | The information as to principal occupation and shares
      beneficially owned has been furnished by the respective
  individuals.
|-- | ----------------------------------------------------------------------------------------------------------------------------------
|11 | The security holdings of the respective individuals are
      current as of December 31, 2012.                                    
|12 | Based upon 137,860,052 common shares of the Company
      issued and outstanding as of December 31,
2012.                         
|13 | The security holdings of Mr. Sánchez are current as of March 8, 2013.                                                             

---

(ii) was subject to a cease trade order
or similar order or an order that denied the relevant company access to any
exemption under securities legislation, that was in effect for a period of more
than 30 consecutive days, that was issued after the director or executive
officer ceased to be a director, chief executive officer or chief financial
officer and which resulted from an event that occurred while that person was
acting in the capacity as director, chief executive officer of chief financial
officer.

Other than as disclosed herein, no director or executive
officer of the Company nor a shareholder holding a sufficient number of common
shares of the Company to materially affect the control of the Company, nor a
personal holding company of any of them:

(a) is, at the date of this AIF or has been within the 10 years
before the date of the AIF, a director, or executive officer of any company
(including the Company), that while that person was acting in that capacity, or
within a year of that person ceasing to act in that capacity, became bankrupt,
made a proposal under any legislation relating to bankruptcy or insolvency or
was subject to or instituted any proceedings, arrangement, or compromise with
creditors, or had a receiver, receiver manager, or trustee appointed to hold its
assets; or

(b) has, within the 10 years before the date of this AIF,
become bankrupt, made a proposal under any legislation relating to bankruptcy or
insolvency, or become subject to or instituted any proceedings, arrangement or
comprise with creditors, or had a receiver, receiver manager or trustee
appointed to hold the assets of the director, officer or shareholder.

Martin Carsky, the President of the Company, was Chief
Executive Officer, President, Chief Financial Officer, Secretary and a director
of Cryopak Industries Inc. (Cryopak) in October 2006 when Cryopak was placed
into receivership. Mr. Carsky was also a director of Cryopak Corporation Ltd.
when it filed for bankruptcy protection in October 2006. All of the assets of
Cryopak Industries Inc. and Cryopak Corporation Ltd. were sold to a third party.
Cryopak failed to file its annual financial statements for the year ended March
31, 2006. On October 5, 2006, the British Columbia Securities Commission issued
a cease trade against Cryopak and its insiders and control persons prohibiting
Cryopak, its insiders and control person from trading in any securities of
Cryopak until the cease trade order is lifted. The cease trade order remains in
effect and is expected to so remain until the ten year anniversary of the
insolvency proceedings.

No director or executive officer of the Company, nor a
shareholder holding a sufficient number of common shares of the Company to
affect materially the control of the Company, nor a personal holding company of
any of them, has been subject to:

(a) any penalties or sanctions imposed by the court relating to
securities legislation or by a securities regulatory authority or has entered
into a settlement agreement with a securities regulatory authority; or

(b) any other penalties or sanctions imposed by a court or
regulatory body that would likely be considered important to a reasonable
investor in making an investment decision.

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75

CONFLICTS OF INTEREST

To the best of the Companys knowledge, and other than as
disclosed herein, there are no known existing or potential material conflicts of
interest between the Company (or a subsidiary of the Company) and any director
or officer of the Company (or a subsidiary of the Company), except that certain
of the directors and officers serve as directors, officers or members of
management of other public companies and therefore it is possible that a
conflict may arise between their duties as a director or officer of the Company
and their duties as a director, officer, promoter or member of management of
such other companies.

The directors and officers of the Company are aware of the
existence of laws governing accountability of directors and officers for
corporate opportunity and requiring disclosure by directors of conflicts of
interest and the Company relies upon such laws in respect of any directors and
officers conflicts of interest or in respect of any breaches of duty by any of
its directors and officers. All such conflicts have been disclosed by such
directors and officers in accordance with the Canada Business Corporations
Actand they have governed themselves in respect thereof to the best of
their ability in accordance with the obligations imposed upon them by law.

AUDIT COMMITTEE INFORMATION

AUDIT COMMITTEE CHARTER

The Audit Committee is ultimately responsible for the policies
and practices relating to integrity of financial and regulatory reporting, as
well as internal controls to achieve the objectives of safeguarding of corporate
assets, reliability of information, and compliance with policies and laws.

The Audit Committees charter sets out its mandate and
responsibilities, and is attached as Schedule A to this AIF.

COMPOSITION OF THE AUDIT COMMITTEE

The members of the Companys audit committee are R.W. (Bob)
Garnett (Chairman), Peter John Jennings and Kenneth W. Major. Each of Messrs.
Garnett, Jennings and Major are independent and financially literate within the
meaning of National Instrument 52-110 Audit Committees.

RELEVANT EDUCATION AND EXPERIENCE

For a description of the education and experience of each Audit
Committee member that is relevant to the performance of his responsibilities as
an audit committee member, see Directors and Officers as well as the
biographies of each member below. Such education and experience provides each
member with:

- an understanding of the accounting principles used by the Company to
  prepare its financial statements, and the ability to assess the general
  application of those principles in connection with estimates, accruals and
  reserves;

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76

- experience preparing, auditing, analyzing or evaluating financial
  statements that present a breadth and level of complexity of accounting issues
  that are generally comparable to the breadth and complexity of issues that can
  reasonably be expected to be raised by the Companys financial statements; and
- an understanding of internal controls and procedures for financial
  reporting.

R.W. (Bob) Garnett

Mr. R.W. (Bob) Garnett is a Chartered Accountant and was an
owner for ten years of US and Canadian based companies in the same-day courier
business. Previous to this, he was an owner and president of Eaglequest Golf
Centers Inc., Chief Financial Officer of the Loewen Group Inc. and held senior
financial roles in the residential and commercial real estate industry. He has
served as Vice-chair of the board of the South Coast British Columbia
Transportation Authority (TransLink) and is currently a Commissioner of the
Financial Institutions Commission and serves as President of Sagebrush Golf and
Sporting Club. Mr. Garnett received a BA (Commerce) from Simon Fraser University
and is a certified corporate director through the Institute of Corporate
Directors (ICD.D).

Kenneth W. Major

Mr. Major brings to the Company more than 36 years of
experience in the mining industry, including operations and management with
Sherritt Gordon Mines and Newmont Mining. In 1987, Mr. Major joined Kilborn
Engineering in Vancouver as a Senior Process Engineer and Project Manager. In
1994, he became an owner/partner in the start of Rescan Engineering Ltd., an
engineering company that was subsequently acquired by HATCH Engineers. In 2006,
Mr. Major left HATCH Engineers to become an independent processing consultant,
KWM Consulting Inc., and has continued to provide services to the mining
community, including major companies such as Newmont Mining, Goldcorp and
Agnico-Eagle. Mr. Major graduated from McGill University with a degree in
Metallurgical Engineering in 1976.

Peter John Jennings

Mr. Jennings is a Chartered Financial Analyst who has almost
three decades of experience in the Canadian and international financial services
sectors, as Chief Executive Officer of a Canadian investment dealer and,
thereafter, a senior investment banker providing strategic advice, raising
capital and executing mergers and acquisitions, primarily for middle-market
companies. He is currently a Senior Client Partner at Korn/Ferry and prior to
that, he was the Chief Operating Officer with a privately held real estate
development, management and investment firm. He earned a masters in business
administration from London Business School in London, England and a bachelors
degree in chemistry from the University of Western Ontario in London,
Ontario.

RELIANCE ON CERTAIN EXEMPTIONS

Since the commencement of the Companys most recently completed
financial year, the Company has not relied on: a) the exemption in section
2.4 (De Minimis Non-Audit Services) of NI 52-110; b) the exemption is
section 3.2 (Initial Public Offerings) of NI 52-110

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77

c) the exemption is section 3.4 (Events Outside the Control
of the Member) of NI 52-110; d) the exemption in section 3.5 (Death,
Disability or Resignation of Audit Committee Member) of NI 52-110; or e)
an exemption from the Instrument in whole or in part, granted under Part 8 of NI
52-110.

PRE-APPROVAL POLICY

The Audit Committee has adopted specific policies for the
engagement of non-audit services to be provided to the Company by the external
auditor.

EXTERNAL AUDITOR SERVICE FEES

The following table sets out the aggregate fees billed to the
Company by its external auditor, KPMG LLP, in each of the last two fiscal
years:

Category
    Year Ended December 31,
      2012
    Year Ended December 31,
      2011Audit Fees
    $548,400
    $297,600Audit-Related Fees
    Nil
    NilTax Fees
    $10,000
    $7,500All Other Fees
    Nil
    Nil


“Audit Fees” includes fees billed by the Company’s auditor related to the audits of the Company’s consolidated financial statements and internal control over financial reporting, and the reviews of the Company’s condensed interim consolidated financial statements.  Audit Fees in 2011 includes fees related to the Company’s IFRS transition and a short-form prospectus offering.

Tax Fees includes fees for the preparation of the Companys
corporation income tax return and related tax filings.

LEGAL PROCEEDINGS AND REGULATORY ACTIONS

During the financial year ended December 31, 2012, the Company
was not and is not currently a party to, nor is any of its property the subject
of, any legal proceedings for which the outcome is expected by management to
have a material adverse effect on the Company, nor, to the Companys knowledge,
is the Company to be a party to any contemplated legal proceedings, the outcome
of which could have a material adverse effect on the Company.

There have been no penalties or sanctions imposed against the
Company by a court relating to securities legislation or by a securities
regulatory authority during the financial year ended December 31, 2012, or any
other penalties or sanctions imposed by a court or regulatory body against the
Company that would likely be considered important to a reasonable investor
making an investment decision in the Company, and the Company has not entered into any settlement agreements
before a court relating to securities legislation or with a securities
regulatory authority during the financial year ended December 31, 2012.

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78

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL
TRANSACTIONS

Other than as elsewhere in this annual report, to the best of
the Companys knowledge, there have been no material transactions or loans from
the commencement of the 2012 fiscal year to the date of this AIF between the
Company and: (a) enterprises that directly or indirectly through one or more
intermediaries, control or are controlled by, or are under common control with,
the Company; (b) associates; (c) individuals owning, directly or indirectly, an
interest in the voting power of the Company that gives them significant
influence over the Company, and close members of any such individual's family;
(d) key management personnel of the Company, including directors and senior
management of the Company and close members of such individuals families; and
(e) enterprises in which a substantial interest in the voting power is owned,
directly or indirectly, by any person described in (c) or (d) or over which such
a person is able to exercise significant influence.

TRANSFER AGENTS AND REGISTRARS

The transfer of the Companys common shares is managed by
Computershare Investor Services (Computershare). Computershares register of
transfers for the common shares of the Company is located at 510 Burrard Street,
3rd Floor, Vancouver, British Columbia, Canada, V6C 3B9.

MATERIAL CONTRACTS

The Company is not at present party to any material contracts,
other than material contracts entered into in the ordinary course of business
and upon which the Companys business is not substantially dependent.

INTERESTS OF EXPERTS

The following is a list of the persons or companies named as
having prepared or certified a report, valuation, statement or opinion described
or included in a filing, or referred to in a filing, made under National
Instrument 51-102 Continuous Disclosure Obligations by the Company during, or
relating to, Companys most recently completed financial year, and whose
profession or business gives authority to the report, valuation, statement or
opinion made by the person or company:

1. KPMG LLP

KPMG LLP is the external auditor of the Company and reported on
the Companys audited financial statements for the years ended December 31, 2012
and 2011 filed on SEDAR.

2. RPA Inc.

RPA Inc. (RPA) was engaged to provide the February 27, 2013
technical report under NI 43-101 on the Topia mine. The technical report was
authored by David W. Rennie, P.Eng., and Tudorel Ciuculescu, M.Sc., P.Geo. of
RPA.

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79

3. Robert F. Brown, P.Eng.

Robert Brown authored the June 26, 2012 technical report under
NI 43-101 on the Guanajuato Mine Complex and supervised the preparation of
certain technical information set forth herein relating to the Companys mineral
properties. Mr. Brown is Vice President, Exploration of the Company and holds
securities of the Company as set forth under the heading Directors and
Officers above.

4. MFW Geoscience Inc.

MFW Geoscience Inc. (MFW) was engaged to provide the June 25,
2012 technical report under NI 43-101 on the San Ignacio Project. The technical
report was authored by Michael Waldegger, P.Geo. of MFW.

To the Companys knowledge, each of the aforementioned firms or
persons held less than 1% of the outstanding securities of the Company or of any
associate or affiliate of the Company when they prepared the reports referred to
above or following the preparation of such reports. None of the aforementioned
firms or persons received any direct or indirect interest in any securities of
the Company or of any associate or affiliate of the Company in connection with
the preparation of such reports.

Based on information provided by the relevant persons, none of
the aforementioned firms or persons, nor any directors, officers or employees of
such firms, are currently expected to be elected, appointed or employed as a
director, officer or employee of the Company or of any associate or affiliate of
the Company.

The Companys auditors, KPMG LLP, are independent within the
meaning of the Rules of Professional Conduct of the Institute of Chartered
Accountants of British Columbia and within the meaning of the United States
Securities Exchange Act of 1934 and the applicable rules and regulations
thereunder adopted by the U.S. Securities and Exchange Commission and the Public
Company Accounting Oversight Board (United States).

ADDITIONAL INFORMATION

Additional information relating to the Company may be found on
SEDAR at www.sedar.com.

Additional information including directors and officers
remuneration and indebtedness, principal holders of the Companys securities,
and securities authorized for issuance under equity compensation plans, as
applicable, is contained in the Companys information circular for its most
recent annual general meeting.

Additional financial information is provided in the Companys
audited financial statements and MD&A for the year ended December 31, 2012
which may be obtained upon request from Great Panthers head office, or may be
viewed on the Companys website (www.greatpanther.com) or on the SEDAR website
(www.sedar.com).

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1

SCHEDULE A

Charter of the Audit Committee

(Approved by the Board on June 4, 2012)

Article 1. Mandate

The mandate of the Audit Committee (the "Committee") of the
board of directors (the "Board") of the Company is to:

| | a. | assist the Board in fulfilling its oversight
      responsibilities in respect of:
| | -- | ----------------------------------------------------------------------------------
| |    |                                                                                   
| |    | i.                                                                                
| |    |                                                                                   
| |    | ii.                                                                               
| |    |                                                                                   
| |    | iii.                                                                              
| |    |                                                                                   
| |    | iv.                                                                               
| |    |                                                                                   
| |    | v.                                                                                

| | b. | provide and establish open channels of communication
      between the Company's management, internal accounting department, external
      auditor and directors;                                                                                                                                              
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                 
| | c. | prepare all filings and disclosure documents required to
      be prepared by the Committee and/or the Board pursuant to all applicable
      federal, provincial and state securities legislation and the rules and
      regulations of all securities commissions having jurisdiction over the
      Company;
| |    |                                                                                                                                                                                                                                                                                                                 
| | d. | review and confirm the adequacy of procedures for the
      review of all public disclosure of financial information extracted or
      derived from the Company's financial statements, and to periodically
      assess the adequacy of those procedures; and                                                 
| |    |                                                                                                                                                                                                                                                                                                                 
| | e. | establish procedures for:                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                 
| |    | i.                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                 
| |    | ii.                                                                                                                                                                                                                                                                                                             

The Committee will primarily fulfill its mandate by performing
the duties set out in Article 7 hereof.

---

2

The Board and management of the Company will ensure that the
Committee has adequate funding to fulfill its mandate.

While the Committee has the responsibilities and powers set
forth in this Charter, it is not the duty of the Committee to plan or conduct
audits, or to determine that the Company's financial statements are complete and
accurate or are in accordance with generally accepted accounting principles,
accounting standards or applicable laws and regulations. This is the
responsibility of Company's management, internal accounting department and
external auditors. Because the primary function of the Committee is oversight,
the Committee will be entitled to rely on the expertise, skills and knowledge of
the Company's management, internal accounting department, external auditors and
other external advisors and the integrity and accuracy of information provided
to the Committee by such persons in carrying out its oversight responsibilities.
Nothing in this Charter is intended to change or in any way limit the
responsibilities and duties of Company's management, internal accounting
department or external auditors.

Article 2. Composition

The Committee will be comprised of members of the Board, the
number of which will be determined from time to time by resolution of the Board.
The composition of the Committee will be determined by the Board such that the
membership and independence requirements set out in the rules and regulations,
in effect from time to time, of any securities commissions (including, but not
limited to, the Securities and Exchange Commission and the British Columbia
Securities Commission) and any exchanges upon which the Company's securities are
listed (including, but not limited to, the Toronto Stock Exchange and the
American Stock Exchange) are satisfied (the said securities commissions and
exchanges are hereinafter collectively referred to as the "Regulators").

Article 3. Term of Office

The members of the Committee will be appointed or re-appointed
by the Board on an annual basis. Each member of the Committee will continue to
be a member thereof until such member's successor is appointed, or until such
member resigns or is removed by the Board. The Board may remove or replace any
member of the Committee at any time. However, a member of the Committee will
automatically cease to be a member of the Committee upon either ceasing to be a
director of the Board or ceasing to meet the requirements established, from time
to time, by any Regulators. Vacancies on the Committee will be filled by the
Board.

Article 4. Chairman

The Board, or if it fails to do so, the members of the
Committee, will appoint a chairman from the members of the Committee. If the
chairman of the Committee is not present at any meeting of the Committee, an
acting chairman for the meeting will be chosen by majority vote of the Committee
from among the members present. In the case of a deadlock in respect of any
matter or vote, the chairman will refer the matter to the Board for resolution.
The Committee may appoint a secretary who need not be a member of the Board or
Committee.

---

3

Article 5. Meetings

The time and place of meetings of the Committee and the
procedures at such meetings will be determined, from time to time, by the
members thereof, provided that:

| | a. | quorum for meetings will be two members, present in
      person or by telephone or other telecommunication device that permits all
      persons participating in the meeting to speak to and hear each other. The
      Committee will act on the affirmative vote of a majority of members
      present at a meeting at which a quorum is present. The Committee may also
      act by unanimous written consent in lieu of meeting;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | b. | the Committee may meet as often as it deems necessary,
      but will not meet less than once annually;                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | c. | notice of the time and place of every meeting will be
      given in writing and delivered in pursuing or by facsimile or other means
      of electronic transmission to each member of the Committee at least 72
      hours prior to the time of such meeting; and                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | d. | the Committee will maintain written minutes of its
      meetings, which minutes will be filed with the minutes of the meetings of
      the Board. The Committee will make regular reports of its meetings to the
      Board, directly or through its chairman, accompanied by any
      recommendations to the Board approved by the
Committee.                                                                                      

Article 6. Authority

The Committee will have the authority to:

| | a. | retain (at the Company's expense) its own legal counsel,
      accountants and other consultants that the Committee believes, in its sole
      discretion, are needed to carry out its duties and
  responsibilities;                                                                                                             
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                    
| | b. | conduct investigations that it believes, in its sole
      discretion, are necessary to carry out its responsibilities;                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                    
| | c. | take whatever actions it deems appropriate, in its sole
      discretion, to foster an internal culture within the Company that results
      in the development and maintenance of a superior level of financial
      reporting standards, sound business risk practices and ethical behaviour;
      and                        
| |    |                                                                                                                                                                                                                                                                                                                                    
| | d. | request that any director, officer or employee of the
      Company, or other persons whose advice and counsel are sought by the
      Committee (including, but not limited to, the Company's legal counsel and
      the external auditors) meet with the Committee and any of its advisors and
      respond to their inquiries.

Article 7. Specific Duties

In fulfilling its mandate, the Committee will, among other
things:

| | a. | (i) select the external auditors, based upon criteria
      developed by the Committee; (ii) approve all audit and non-audit services
      in advance of the provision of such services and the fees and other
      compensation to be paid to the external auditors; (iii) oversee the
      services provided by the external auditors for the purpose of preparing or
      issuing an audit report or related work; and (iv) review the performance
      of the external auditors, including, but not limited to, the partner of
      the external auditors in charge of the audit, and, in its
      discretion, approve any proposed discharge of the external auditors when
      circumstances warrant, and appoint any new external auditors.
      Notwithstanding any other provision of this Charter, the external auditor
      will be ultimately accountable to the Board and the Committee, as
      representatives of the shareholders of the Company, and those
      representatives will have the ultimate authority and responsibility to
      select, evaluate and, where appropriate, replace the external auditor (or
      to nominate the external auditor to be proposed for shareholder
  approval);
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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4

| | b. | periodically review and discuss with the external
      auditors all significant relationships that the external auditors have
      with the Company to determine the independence of the external auditors.
      Without limiting the generality of the foregoing, the Committee will
      ensure that it receives, on an annual basis, a formal written statement
      from the external auditors that sets out all relationships between the
      external auditor and the Company, consistent with all professional
      standards that are applicable to the external auditors (including, but not
      limited to, those established by any securities legislation and
      regulations, the Canadian Institute of Chartered Accounts and the American
      Institute of Certified Public Accountants, and those set out in the
      "Handbook of the Canadian Institute of Chartered Accountants" and
      "Independence Standards Board Standard No. 1");
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | c. | evaluate, in consultation with the Company's management,
      internal accounting department and external auditors, the effectiveness of
      the Company's processes for assessing significant risks or exposures and
      the steps taken by management to monitor, control and minimize such risks;
      and obtain, annually, a letter from the external auditors as to the
      adequacy of such controls;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | d. | consider, in consultation with the Company's external
      auditors and internal accounting department, the audit scope and plan of
      the external auditors and the internal accounting department;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | e. | coordinate with the Company's external auditors the
      conduct of any audits to ensure completeness of coverage and the effective
      use of audit resources;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | f. | assist in the resolution of disagreements between the
      Company's management and the external auditors regarding the preparation
      of financial statements; and in consultation with the external auditors,
      review any significant disagreement between management and the external
      auditors in connection with the preparation of the financial statements,
      including management's responses thereto;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | g. | after the completion of the annual audit, review
      separately with each of the Company's management, external auditors and
      internal accounting department the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| | i.   | the Company's annual financial statements and related
      footnotes;                                                                                                                                                                                                                                                          
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                 
| | ii.  | the external auditors' audit of the financial statements
      and their report thereon;                                                                                                                                                                                                                                        
| |      |                                                                                                                                                                                                                                                                                                                                 
| | iii. | any significant changes required in the external
      auditors' audit plan;                                                                                                                                                                                                                                                    
| |      |                                                                                                                                                                                                                                                                                                                                 
| | iv.  | any significant difficulties encountered during the
      course of the audit, including, but not limited to, any restrictions on
      the scope of work or access to required information;                                                                                                                                    
| |      |                                                                                                                                                                                                                                                                                                                                 
| | v.   | the Company's guidelines and policies governing the
      process of risk assessment and risk management; and                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                 
| | vi.  | other matters related to the conduct of the audit that
      must be communicated to the Committee in accordance with the standards of
      any regulatory body (including, but not limited to, the Canadian Institute
      of Chartered Accountants and the Public Company Accounting Oversight Board
      (United States));

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5

| | h. | consider and review with the Company's external auditors
      (without the involvement of the Company's management and internal
      accounting department):
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                               
| |    | i.                                                                                                                                                            
| |    |                                                                                                                                                               
| |    | ii.                                                                                                                                                           
| |    |                                                                                                                                                               
| |    | iii.                                                                                                                                                          

| | i. | consider and review with the Company's management and
      internal accounting department:
| | -- | -------------------------------------------------------------------------------------------
| |    |                                                                                            
| |    | i.                                                                                         
| |    |                                                                                            
| |    | ii.                                                                                        
| |    |                                                                                            
| |    | iii.                                                                                       
| |    |                                                                                            
| |    | iv.                                                                                        

| | j. | establish systems for the regular reporting to the
      Committee by each of the Company's management, external auditors and
      internal accounting department of any significant judgments made by
      management in the preparation of the financial statements and the opinions
      of each as to appropriateness of such judgments;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | k. | review (for compliance with the information set out in
      the Company's financial statements and in consultation with the Company's
      management, external auditors and internal accounting department, as
      applicable) all filings made with Regulators and government agencies, and
      other published documents that contain the Company's financial statements
      before such filings are made or documents published (including, but not
      limited to: (i) any certification, report, opinion or review rendered by
      the external auditors; (ii) any press release announcing earnings
      (especially those that use the terms "pro forma", "adjusted information"
      and "not prepared in compliance with generally accepted accounting
      principles"); and (iii) all financial information and earnings guidance
      intended to be provided to analysts, the public or to rating
    agencies);
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | l. | prepare and include in the Company's annual proxy
      statement or other filings made with Regulators any report from the
      Committee or other disclosures required by all applicable federal,
      provincial and state securities legislation and the rules and regulations
      of Regulators having jurisdiction over the Company;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | m. | review with the Company's management: (i) the adequacy of
      the Company's insurance and fidelity bond coverage, reported contingent
      liabilities and management's assessment of contingency planning; (ii)
      management's plans in respect of any changes in accounting practices or
      policies and the financial impact of such changes; (iii) any major areas
      in that, in management's opinion, have or may have a significant effect
      upon the financial statements of the Company; and (iv) any litigation or
      claim (including, but not limited to, tax assessments) that could have a
      material effect upon the financial position or operating results of the
      Company;                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | n. | at least annually, review with the Company's legal
      counsel and accountants all legal, tax or regulatory matters that may have
      a material impact on the Company's financial statements, operations and
      compliance with applicable laws and regulations;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | o. | review and update periodically a Code of Ethics and
      Business Conduct for the directors, officers and employees of the Company;
      and review management's monitoring of compliance with the Code of Ethics
      and the Business Conduct;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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6

| | p. | review and update periodically the procedures for the
      receipt, retention and treatment of complaints and concerns by employees
      received by the Company regarding accounting, internal accounting controls
      or auditing matters, including, but not limited to, concerns regarding
      questionable accounting or auditing practices, as set out in the Schedule
      attached to this Charter;
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                   
| | q. | consider possible conflicts of interest between the
      Company's directors and officers and the Company; and approve in advance
      all related party transactions;                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                   
| | r. | review policies and procedures in respect of the expense
      accounts of the Company's directors and officers, including, but not
      limited to, the use of corporate assets;                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                   
| | s. | review annually and update this Charter and recommend any
      proposed changes to the Board for approval, in accordance with the
      requirements of all applicable federal, provincial and state securities
      legislation and the rules and regulations of Regulators having
      jurisdiction over the Company; and                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                   
| | t. | perform such other functions, consistent with this
      Charter, the Company's constating documents and governing laws, as the
      Committee deems necessary or appropriate.                                                                                                                                                                                                                                   

WHISTLE BLOWER POLICY
(Schedule to Charter of the Audit Committee)

Procedures for the Submission of Complaints or Concerns
regarding Accounting, Internal Accounting Controls and Auditing
Matters

1. The Company has designated the Business Ethics Officer (The
Officer) to be responsible for administering these procedures for the receipt,
retention and treatment of complaints or concerns received by the Company
regarding accounting, internal accounting controls or auditing matters in
respect of the Company, including, but not limited to, concerns regarding
questionable accounting or auditing practices on behalf of the Audit Committee
of its board of directors.

2. Any person including employee of the Company or third party
may on a confidential and anonymous basis submit complaints or concerns
regarding accounting, internal accounting controls or auditing matters in
respect of the Company by setting out such complaints or concerns in an e-mail
or a letter addressed to the Business Ethics Officer with a legend on the
envelope that indicates that the contents of the envelope are confidential (for
example, Confidential or To be Opened by the Business Ethics Officer Only).
If the complainant would like to discuss the matter directly with a member of
the Committee, the complainant should include a telephone number at which he or
she can be contacted in his or her submission to the Officer.

All submissions to the Business Ethics Officer should be
addressed as follows:

| | Great Panther Silver Limited           
| | ---------------------------------------
| | c/o Business Ethics Officer            
| | Attn: Mr. R.W. (Bob) Garnett, CA, ICD.D
| | Suite 800, 333 Seymour Street          
| | Vancouver, British Columbia V6B 5A6    
| | Canada                                 

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7

| | CONFIDENTIAL                   
| | -------------------------------
| | Or                             
| | E-mail: ethics@greatpanther.com

3. Any communications regarding complaints or concerns about
accounting, internal accounting controls or auditing matters in respect of the
Company submitted by employees to the Committee will be treated as
confidential.

4. Any complaints or concerns that are made directly to
management, whether openly, confidentially or anonymously, shall be promptly
reported to the Business Ethics Officer. The complaints will be investigated
under the direction of the Audit Committee.

5. If the complaint or concern is a serious matter with
material impact on, or involving the Companys Senior Management, the Officer
will report the issue to the Audit Committee of Great Panther within 24 hours
from the time it is received.

6. The Officer shall determine what internal resources or
professional assistance, if any, is required in order to conduct a full
investigation with the Audit Committees approval.

7. The Officer shall promptly investigate the complaint and
shall report the result of the investigation in writing, to the Audit Committee
at the end of each quarter.

8. All whistleblower complaints or concerns must be retained by
the Audit Committee for a period of seven (7) years.

9. The Company will not tolerate any termination or retaliation
by any person or group, directly or indirectly, against anyone who, in good
faith, makes a complaint, raises a concern or provides assistance to the
investigation.

10. The investigation shall not reveal the identity of any
person who makes a good faith complaint or concern and who asks that his or her
identity remain confidential.

11. Nothing herein shall be construed to protect a person from
the consequences of their own wrongdoing however a persons self disclosure or
wrongdoing that is not independently discovered through investigation shall be
taken into account when considering the consequences to such person.

12. If an employee, officer or director of the Company
legitimately and in good faith submits a complaint, the Company will not
discharge, demote, suspend, threaten, harass or otherwise discriminate or
retaliate against him or her in the terms or conditions of employment because of
that activity. However, since such allegation of impropriety may result in
serious personal repercussions for the target person or entity, the employee,
officer, or director making the allegations of impropriety should have
reasonable and probable grounds before reporting such impropriety and should
undertake such reporting in good faith, for the best interests of the Company
and not for personal gain or motivation.

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8

13. In the event that the investigation reveals that the
complaint was frivolously made or undertaken for improper motives or made in bad
faith or without a reasonable and probable basis, appropriate disciplinary
action may be taken.

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