---



GREAT PANTHER SILVER LIMITED

MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE YEAR ENDED
DECEMBER 31, 2012



|GREAT PANTHER SILVER
      LIMITED |  
|---------------------------------- | -
|YEAR ENDED DECEMBER 31, 2012       | 1

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TABLE OF CONTENTS

|PROFILE AND
      STRATEGY                                     | 3 
|-------------------------------------------------------------- | --
|SIGNIFICANT TRANSACTIONS AND EVENTS
      AFFECTING OPERATIONS | 8 
|FOURTH QUARTER AND
      FISCAL YEAR 2012 HIGHLIGHTS           | 10
|MINE OPERATING RESULTS                                         | 12
|RESOURCE AND
      EXPLORATION UPDATE                          | 18
|SELECTED QUARTERLY INFORMATION                                 | 22
|SELECTED ANNUAL
      INFORMATION                              | 23
|QUARTERLY TRENDS AND MARKET DATA                               | 23
|RESULTS OF
      OPERATIONS                                    | 25
|NON-IFRS MEASURES                                              | 29
|LIQUIDITY AND CAPITAL
      RESOURCES                          | 31
|OFF-BALANCE SHEET ARRANGEMENTS                                 | 32
|FINANCIAL
      INSTRUMENTS                                    | 32
|OUTLOOK                                                        | 34
|TRANSACTIONS WITH
      RELATED PARTIES                        | 35
|CRITICAL ACCOUNTING POLICIES AND
      ESTIMATES               | 35
|CHANGES IN ACCOUNTING
      STANDARDS                          | 37
|SECURITIES OUTSTANDING                                         | 38
|INTERNAL CONTROLS
      OVER FINANCIAL REPORTING               | 38
|DISCLOSURE CONTROLS AND
      PROCEDURES                       | 39
|RISKS AND
      UNCERTAINTIES                                  | 39
|CAUTIONARY STATEMENT ON
      FORWARD-LOOKING STATEMENTS       | 41
|QUALIFIED PERSON                                               | 43
|CAUTIONARY NOTE TO U.S. INVESTORS                              | 43
|ADDITIONAL SOURCES OF
      INFORMATION                        | 44

|GREAT PANTHER SILVER
      LIMITED |  
|---------------------------------- | -
|YEAR ENDED DECEMBER 31, 2012       | 2

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This Managements Discussion and Analysis (MD&A) prepared
as of March 13, 2013 reviews the financial condition and results of operations
of Great Panther Silver Limited (Great Panther or the Company) for the year
ended December 31, 2012, and other material events up to the date of this
report. The information in this MD&A is as at March 13, 2013 unless
otherwise indicated. The following discussion should be read in conjunction with
the annual audited consolidated financial statements and related notes for the
year ended December 31, 2012.

The financial data included in the discussion provided in this
report has been prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board.
All dollar amounts are in Canadian dollars, unless otherwise noted.

This MD&A contains forward-looking statements and should be
read in conjunction with the risk factors described in the Risks and
Uncertainties and Cautionary Statement on Forward-Looking Statements sections
at the end of this MD&A, as well as Description of the Business  Risk
Factors in the Companys Annual Information Form (AIF) for the year ended
December 31, 2012.

This MD&A also makes reference to Cash Cost per Ounce,
EBITDA, and Adjusted EBITDA. These are considered Non-IFRS Measures. Please
refer to the Non-IFRS Measures section of this MD&A for an explanation of
these measures and a reconciliation to the Companys reported financial
results.

PROFILE AND STRATEGY

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.

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 Metalicos 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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, is 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.

Goals and Objectives

Great Panther's mission is to become a leading primary silver
producer by acquiring, developing and profitably mining precious metals in Latin
America.

The Companys primary goal is that of profitable growth, as
management feels this is the key to maximizing long-term shareholder value.
Managements specific objectives are to grow production and earnings from
existing mining operations and realize positive cash flow while continuing to
actively pursue the acquisition of new mining operations and exploration and
development opportunities in Latin America.

Great Panther is committed to achieving the highest standards
in Corporate Social Responsibility for its operations at every stage of project
development, from early stage exploration to mature mining operations. The Company recognizes that the ability to generate long-term value
for shareholders is firmly rooted in the manner in which the Company conducts
itself, how employees are treated, how the Company interacts with the
communities in which Great Panther operates, and how the Company respects the
environment.

|GREAT PANTHER SILVER
      LIMITED |  
|---------------------------------- | -
|YEAR ENDED DECEMBER 31, 2012       | 3

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Great Panther is committed to working diligently with its
stakeholders to achieve the responsible development of the Companys projects
and operations, and to contribute to the sustainable development of the
communities in which the Company works.

Key Performance Drivers

Great Panthers ability to continue to successfully achieve its
goals of increasing production while generating positive cash flow is dependent
on a number of factors. These factors are regularly measured and monitored, with
timely feedback provided about progress toward achieving our goals. The
Companys key performance drivers are the following:

Volume

The Company operates two producing mines in Mexico -one in
Guanajuato and the second in Topia. Since commencing operations at these two
mines in 2006, Great Panther achieved continuous growth in metal production in
excess of 20% per year until 2010 when the Company achieved record production of
2.3 million silver equivalent ounces (Ag eq oz).

For 2011, the Company increased mined and processed ore by 19%,
however, final metal production was impacted by lower ore grades which limited
metal production for the year to 2.2 million silver equivalent ounces. For 2012,
Great Panther increased metal production by 8% to 2.4 million silver equivalent
ounces, primarily by increased ore production and improved gold grades.

Fundamental to the growth in production is the increase in
Mineral Resources through exploration of the mineralized zones in the existing
mines and also through the exploration and/or acquisition of other projects.
Great Panther is committed to seeking out new opportunities to grow and develop
its business.

Resources

Definition of resources is essential to the future production
capability of the Company. When Great Panther acquired its two mines in Mexico
in 2005, there were no NI 43-101 compliant resources on either property. Over
the past eight years, the Company has incurred $13.7 million and $18.3 million
on mineral property exploration expenditures at Topia and Guanajuato,
respectively, as it continues to build its internal and NI 43-101 compliant
resources.

The Company plans approximately 30,000 metres of exploration
drilling in 2013 to further define resources, look for vein extensions and test
new targets.

For more details on the Companys resources, refer to the
Resource and Exploration Update section.













|GREAT PANTHER SILVER
      LIMITED |  
|---------------------------------- | -
|YEAR ENDED DECEMBER 31, 2012       | 4

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Operating Costs

Attaining and maintaining a low unit operating cost structure
has been critical to achieving profitability. Metal prices can be volatile as
experienced through recent years. Having a low silver production cost base
increases mine net earnings and allows the Company to remain profitable during
times of low commodity prices.

During 2012, the Company experienced an increase in unit
operating costs per silver ounce produced relative to the prior year. The
Company measures and reports these as cash cost per ounce of silver, net of
by-product credits. Cash cost per ounce of silver is a common metric reported by
companies in the mining industry however it is a non-IFRS measure.

The increase in cash cost per ounce of silver in 2012 was the
result of an increase in site costs, a decrease in ore grades at Topia resulting
from variability in mineralization, and increases in smelting and refining costs
due to higher cost contracts. Please refer to the Mine Operating Results and
Non-IFRS Measures sections of this document for a more detailed discussion of
cash cost per silver ounce. The Companys reported cash cost per silver ounce is
also affected by changes in metal prices of non-silver by-products, specifically
gold at Guanajuato and lead, zinc and gold at Topia, relative to the silver
price.

Prices

One of the Companys objectives is to provide shareholders with
leverage to future increases in the price of silver. To this end, the Company
does not engage in any hedging arrangements on silver prices. As a result, Great
Panthers share price tends to correlate very strongly with the price of silver.
Additional leverage comes through the participation in the growth of the Company
itself.

While the average price of silver for 2012 decreased by 11% on
a year-over-year basis, it has fluctuated significantly in recent years, and it
continued to be volatile in 2012 reaching a high of $37.23 in February and low
of $26.67 in July1.

The Companys financial results are very sensitive to the price
of silver. The following table summarizes the effect of changes in the silver
price on the Companys 2013 revenue outlook, based on an assumed production of
2.5 million silver equivalent ounces2.

Revenue Sensitivity to Change in Silver Price (in 000's
except for silver price per ounce)

|Silver price
      per ounce | US$20.00       | US$25.00       | US$30.00       | US$35.00       | US$40.00       | US$45.00       | US$50.00      
|---------------------------- | -------------- | -------------- | -------------- | -------------- | -------------- | -------------- | --------------
|Guanajuato Revenue (USD)     | $ 37,314       | $ 41,690       | $ 46,067       | $ 50,242       | $ 54,354       | $ 58,465       | $ 62,576      
|Topia Revenue (USD)          | $
      13,365 | $
      16,501 | $
      19,638 | $
      22,597 | $
      25,290 | $
      27,984 | $
      30,677
|                             |                |                |                |                |                |                |               
|Total
      Revenue (CAD)    | $
      48,966 | $
      56,225 | $
      63,484 | $
      70,378 | $
      76,953 | $
      83,527 | $
      90,102

Assumes gold price of US$1,680 per ounce, and zinc and lead
prices of US$0.85/lb.

The Companys reported cash cost per silver ounce is affected
by changes in metal prices of the by-products of silver, specifically gold at
Guanajuato and lead, zinc and gold at Topia, relative to the silver price (refer
to Non-IFRS Measures section for discussion of cash cost per silver ounce).
The following tables summarize the effect of changes in prices of gold, lead and zinc on the Companys
2013 estimated combined cash cost per ounce of silver based on an assumed
production of approximately 2.5 million Ag eq oz:

__________________________________1London Spot
Fix2  2.5 million silver equivalent ounces represents the top of
the Companys production guidance range of 2.4  2.5 million silver equivalent
ounces for 2013.

|GREAT PANTHER SILVER
      LIMITED |  
|---------------------------------- | -
|YEAR ENDED DECEMBER 31, 2012       | 5

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Cash Cost per Payable Ounce of Silver: Sensitivity to
Change in Gold Price

|Gold price per
      ounce          |   | US $1,500 |  |   | US $1,600 |  |   | US $1,700 |  |   | US $1,800 |  |   | US $1,900 | 
|----------------------------------- | - | --------- |  | - | --------- |  | - | --------- |  | - | --------- |  | - | --------- | 
|Cash cost per ounce of silver (USD) | $ | 11.82     |  | $ | 10.96     |  | $ | 10.09     |  | $ | 9.23      |  | $ | 8.37      | 

Assumes silver price of US$28 per ounce, and zinc and lead
prices of US$0.85 per pound.

Cash Cost per Payable Ounce of Silver: Sensitivity to
Change in Zinc Price

|Zinc price per
      pound          |   | US $0.60 |  |   | US $0.70 |  |   | US $0.80 |  |   | US $0.90 |  |   | US $1.00 | 
|----------------------------------- | - | -------- |  | - | -------- |  | - | -------- |  | - | -------- |  | - | -------- | 
|Cash cost per ounce of silver (USD) | $ | 10.66    |  | $ | 10.50    |  | $ | 10.33    |  | $ | 10.22    |  | $ | 10.11    | 

Assumes silver price of US$28 per ounce, gold price of US$1,680
per ounce, and lead price of US$0.85 per pound.

Cash Cost per Payable Ounce of Silver: Sensitivity to
Change in Lead Price

|Lead price per
      pound          |   | US $0.60 |  |   | US $0.70 |  |   | US $0.80 |  |   | US $0.90 |  |   | US $1.00 | 
|----------------------------------- | - | -------- |  | - | -------- |  | - | -------- |  | - | -------- |  | - | -------- | 
|Cash cost per ounce of silver (USD) | $ | 10.62    |  | $ | 10.48    |  | $ | 10.34    |  | $ | 10.20    |  | $ | 10.08    | 

Assumes silver price of US$28 per ounce, gold price of US$1,680
per ounce, and zinc price of US$0.85 per pound.

Capabilities to Deliver Results

Great Panther continues to emphasize three key elements of its
business in order to achieve its goals and objectives. The Company believes that
the emphasis of these three key elements will enable it to successfully execute
its growth strategy.

People

One of Great Panthers key strategies is to build the team that
will help achieve the Companys goals. This includes recruiting, training and
developing the right people, as well as enhancing the productivity of the team
by providing the tools and training needed to be effective.

The Companys ability to attract and retain qualified employees
is critical to its success. In addition to experienced key personnel, the
Company looks for bright, hard-working individuals with positive attitudes, and
is committed to providing its people with a great workplace and opportunities to
grow with the Company.

As part of Great Panthers commitment to its employees, the
Company has a policy of granting stock options to all employees to build loyalty
as well as align their performance with corporate goals and objectives.

Mining Operations and Exploration

Great Panthers operations focus on silver mining, processing
and exploration. The Guanajuato and Topia operations depend on the discovery of
new mineralization and therefore the Company invests in the continued
development of these properties. In 2013, the Company will be focused on the
development of its San Ignacio Project which is approximately 20 kilometres by
road from its Guanajuato processing plant.

The Company also owns two exploration stage properties: the
Santa Rosa Project, located approximately 15 kilometres northeast of Guanajuato,
and the recently acquired El Horcon Project, located 60 kilometres northwest of
Guanajuato. New discoveries that are close to the existing operations mean that
the time from discovery to production is reduced and capital requirements are
lower as existing infrastructure can be utilized.

|GREAT PANTHER SILVER
      LIMITED |  
|---------------------------------- | -
|YEAR ENDED DECEMBER 31, 2012       | 6

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The performance of the mining and processing operations builds
on a sound base and continues to improve to new record levels. Great Panther is
fortunate to have a highly experienced team of underground miners and
metallurgists. The Company processed a record 230,120 tonnes of ore in 2012, a
6% increase from the prior year.

Mine development focuses on accessing near term production
targets and providing underground drilling platforms for deeper exploration to
ensure resources and mine life are extended. At Guanajuato, targets include
Rayas, Santa Margarita, Los Pozos, Valenciana, Deep Cata and the Guanajuatito
North Zone, as well as the recently discovered silver-gold veins at the San
Ignacio Project.

The Company was successful at increasing throughput at Topia
however the mine experienced a decline in average silver grades in 2012. While
grade variability is expected to continue, the Company is taking steps to
improve its mine planning activities which should result in better operating
efficiency. Over the years, the Company has also been successful in adding
resources at Topia through a combination of underground development and surface
exploration drilling and will continue to invest in these activities in the
future.

Ore processing at both operations is supported by metallurgical
testwork programs under the direction of the Companys Country Manager,
Metallurgy. This, together with the local expertise, has resulted in continuous
improvement in processing performance.

Location of Operations

Great Panther is focused on Mexico for several reasons. Mexico
has consistently been the leading silver producing country in the world and has
a rich mineral endowment and a long history of mining. This mining culture
continues today and mining companies in Mexico typically enjoy strong support
from all levels of government and from the local people.

As part of the North American Free Trade Agreement, Mexico has
a stable political and economic environment in which to operate. In addition,
due to the climate, most projects can be worked on throughout the year and many
can be reached in a single day from Vancouver by flight. Great Panthers
Guanajuato mine is serviced by an international airport in Leon, only 30 minutes
away by road.

Although there are more than 200 mining/exploration companies
working in Mexico, Great Panther has the advantage of extensive experience in
Mexico and has a broad base of contacts that benefits its mining operations,
exploration programs and provides access to new opportunities. The Companys
executive team has extensive experience and knowledge of business in Mexico to
capitalize on future opportunities.

|GREAT PANTHER SILVER
      LIMITED |  
|---------------------------------- | -
|YEAR ENDED DECEMBER 31, 2012       | 7

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SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING
OPERATIONS

During the year ended December 31, 2012, Great Panther
continued to invest in its wholly-owned Mexican properties as part of its growth
strategy to expand production and resources. Important developments in the
Companys business during the year are as follows.

On February 6, 2012, the Company announced the appointment of
R. W. (Bob) Garnett, CA, ICD.D. as Independent Chairman of the Company's Board
of Directors. Mr. Garnett has served as an independent Director of Great Panther
since May 3, 2011 and is Chairman of the Audit Committee. Mr. Garnett replaced
Kaare Foy, who retired after serving more than 18 years as a Director of the
Company and almost eight years as Executive Chairman.

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. 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 June 28, 2012, the Company announced the re-election of
Robert A. Archer, Kenneth W. Major and R.W. (Bob) Garnett and the election of
new nominees John Jennings and J. Richard H. (Dick) Whittington as Directors of
the Company. Former director John Kopcheff, of Australia, did not stand for
re-election. John Jennings has almost three decades of experience in Canadian
and international investment banking, having held positions at firms including
BMO Nesbitt Burns, Lehman Brothers International, RBC Financial, HSBC Group and
CIBC. Mr. Jennings recently joined Korn/Ferry International, the worlds largest
executive search and talent management firm. Mr. Whittington is a mining
engineer with over 35 years of experience in Canada and abroad. He was
previously president, CEO and a director of PNG Gold, an advanced stage gold
exploration company located in Papua New Guinea. Prior to this, he was
president, CEO and a director of Farallon Mining, where he brought Farallons
G-9 polymetallic zinc mine in Guerrero State, Mexico into production in less
than four years. In November 2012, Mr. Whittington accepted the position of
President and CEO of Northern Vertex Mining Corp. and resigned from the Board of
Directors of Great Panther in January 2013.

On July 18, 2012, the Company announced a number of changes to
its senior management structure. The changes included the separation of the
President and CEO role, under which Mr. Robert Archer retained the role of CEO
and Mr. Martin Carsky was appointed President of the Company. Mr. Carsky served
as the Companys Executive Vice President and CFO since May of 2011. Jim Zadra,
CA, was appointed Chief Financial Officer of Great Panther after serving as Vice
President, Finance since September 2011. Mr. Graham Parsons was promoted to the
newly created role of Vice President, Operations based in Guanajuato, Mexico.
Mr. Charles Brown was appointed to a newly created role as Senior Vice
President, Corporate Development and his former position of Chief Operating
Officer was eliminated. Mr. Parsons subsequently left Great Panther and was
replaced by Mr. Juan Manuel Flores in March of 2013.

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 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.

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. The Company has applied for permits for a Phase
I drill program to delineate a resource and expects to commence drilling before
the end of the second quarter of 2013.

|GREAT PANTHER SILVER
      LIMITED |  
|---------------------------------- | -
|YEAR ENDED DECEMBER 31, 2012       | 8

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As of the date of this MD&A, 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.

The following events took place after the end of 2012:

On January 14, 2013, the Company announced an update to the
ongoing mineral resource development at the Company's 100% owned Topia
Silver-Gold-Lead-Zinc Mine in Durango, Mexico. The 2012 Measured & Indicated
Mineral Resources total 156,000 tonnes at 806g/t silver, 1.47g/t gold, 6.48%
lead and 4.29% zinc (5.60 million silver equivalent ounces). In addition, the
estimate includes 273,000 tonnes of 837g/t silver, 0.8g/t gold, 5.7% lead and
3.9% zinc (9.54 million Ag eq oz) in the Inferred category. Although the total
number of ounces was reduced from the 2011 estimate, the updated Resource
Estimate reflects a more robust model and a better reconciliation to mine
production. See the Resource and Exploration Update section for further
details.

On February 5, 2013, the Company announced that underground
drilling programs at the Companys wholly owned 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.

|GREAT PANTHER SILVER
      LIMITED |  
|---------------------------------- | -
|YEAR ENDED DECEMBER 31, 2012       | 9

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FOURTH QUARTER AND FISCAL YEAR 2012 HIGHLIGHTS

Highlights(in 000s except ounces, amounts per share and
    
    
    
    
    
    
    
    
    
    
    Year Ended
    
    
    Year Endedper ounce)
    
    Q4 2012
    
    
    Q4 2011
    
    
    Change
    
    
    Dec 31, 2012
    
    
    Dec 31, 2011
    
    
    ChangeRevenue
    $
    17,789
    
    $
    17,520
    
    
    2%
    
    $
    61,139
    
    $
    57,818
    
    
    6%Gross profit (Earnings from mining
      operations)
    $
    3,318
    
    $
    6,032
    
    
    -45%
    
    $
    19,206
    
    $
    26,916
    
    
    -29%Net income (loss)
    $
    (1,285)
    
    $
    (1,419)
    
    
    9%
    
    $
    5,510
    
    $
    11,506
    
    
    -52%Adjusted
      EBITDA1
    $
    3,800
    
    $
    6,265
    
    
    -39%
    
    $
    16,893
    
    $
    24,723
    
    
    -32%Earnings (loss) per share  basic
    $
    (0.01)
    
    $
    (0.01)
    
    
    0%
    
    $
    0.04
    
    $
    0.09
    
    
    -56%Earnings (loss) per share 
      diluted
    $
    (0.01)
    
    $
    (0.01)
    
    
    0%
    
    $
    0.04
    
    $
    0.08
    
    
    -50%Silver ounces produced
    
    453,934
    
    
    354,754
    
    
    28%
    
    
    1,560,040
    
    
    1,495,372
    
    
    4%Silver equivalent ounces
      produced2
    
    672,690
    
    
    545,294
    
    
    23%
    
    
    2,378,603
    
    
    2,200,013
    
    
    8%Silver payable ounces
    
    446,077
    
    
    425,225
    
    
    5%
    
    
    1,472,269
    
    
    1,332,262
    
    
    11%Total cash cost per silver ounce
      (USD)3
    $
    14.58
    
    $
    11.92
    
    
    22%
    
    $
    12.24
    
    $
    10.84
    
    
    13%Average realized silver price
      (USD)4
    $
    31.94
    
    $
    30.86
    
    
    3%
    
    $
    30.93
    
    $
    34.71
    
    
    -11%


Fiscal Year 2012 Financial and Operational Highlights
(Compared to Fiscal Year 2011)

- Revenues totalled $61.1 million for the year ended December 31, 2012, an
  increase of 6%;
- Net income was $5.5 million for 2012, a decrease of 52%;
- Cash-flow from operating activities was $13.1 million for 2012, compared to
  $19.1 million;
- Cash position at year end was $25.9 million, inclusive of short term
  investments, compared to $39.5 million;
- Net working capital at year end was $44.5 million, compared to $53.8
  million;
- Processed ore for 2012 totaled 230,120 tonnes, a 6% increase;
- Record metal production was achieved for 2012 of 2,378,603 silver
  equivalent ounces (Ag eq oz), an 8% increase;
- Silver production for 2012 increased 4% to 1,560,040 ounces;
- Gold production for 2012 increased 36% to a record of 10,924 ounces;
- Cash cost per silver ounce for 2012 increased 13% to US$12.24;

__________________________________1Adjusted
EBITDA is a non-IFRS measure in which standard EBITDA (earnings before
interest, taxes, depreciation and amortization) is adjusted for share-based
payments expense, foreign exchange gains or losses, and non-recurring items. The
Company has updated its definition of adjusted EBITDA and has restated 2011
comparative figures presented above and elsewhere in this MD&A to reflect
the exclusion of interest income. The Company does not consider these changes to
be material. Refer to the Non-IFRS Measures section for the definition and a
reconciliation of standardized and adjusted EBITDA to the financial
statements.2Silver equivalent ounces in 2012 were established
using prices of US$28 per oz, US$1,680 per oz, US$0.85 per lb, and US$0.85 per
lb for silver, gold, lead and zinc, respectively, and applied to the recovered
metal content of the concentrates that were produced by the two
operations.3Cash cost per silver ounce is a non-IFRS measure
and is used by the Company to manage and evaluate operating performance at each
of the Companys mines and is widely reported in the silver mining industry as a
benchmark for performance, but does not have a standardized meaning. Refer to
the Non-IFRS Measures section.4Average realized silver price
is prior to treatment, refining and smelting charges.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 10

---

- Average silver grades at Guanajuato for 2012 were unchanged at 199g/t,
  while average gold grades increased to 2.02g/t from 1.52g/t;
- Topia average silver grades for 2012 decreased to 345g/t from 400g/t; and
- Guanajuato maintained strong metallurgical recoveries 2012 of 90.2% and
  91.5% for silver and gold respectively.

Fourth Quarter 2012 Financial and Operational Highlights
(Compared to Fourth Quarter 2011)

- Revenues totalled $17.8 million for the three months ended December 31,
  2012 (Q4 2012) compared to $17.5 million for the three months ended December
  31, 2011 (Q4 2011), an increase of 2%;
- Net loss for Q4 2012 was $1.3 million, compared to a net loss of $1.4
  million in Q4 2011;
- Cash-flow from operating activities was $4.5 million for Q4 2012, compared
  to $9.9 million for Q4 2011;
- Processed ore for Q4 was 67,659 tonnes, representing an increase of 30%;
- Metal production for Q4 2012 was 672,690 Ag eq oz, a quarterly record and
  an increase of 23% over Q4 2011;
- Silver production for Q4 was 453,934 ounces, an increase of 28%; and
- Gold production for Q4 was 2,826 ounces, an increase of 24%.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 11

---

MINE OPERATING RESULTS

Consolidated Operations

|                                          |   |           |  |   |         |  |   | 2012    |  |   |         |  |   |         |  |   |           |  |   |         |  |   | 2011    |  |   |         |  |   |         | 
|----------------------------------------- | - | --------- |  | - | ------- |  | - | ------- |  | - | ------- |  | - | ------- |  | - | --------- |  | - | ------- |  | - | ------- |  | - | ------- |  | - | ------- | 
|                                          |   | FY        |  |   | Q4      |  |   | Q3      |  |   | Q2      |  |   | Q1      |  |   | FY        |  |   | Q4      |  |   | Q3      |  |   | Q2      |  |   | Q1      | 
|Tonnes milled                             |   | 230,120   |  |   | 67,659  |  |   | 58,307  |  |   | 52,956  |  |   | 51,198  |  |   | 216,181   |  |   | 52,170  |  |   | 53,375  |  |   | 56,643  |  |   | 53,993  | 
|                                          |   |           |  |   |         |  |   |         |  |   |         |  |   |         |  |   |           |  |   |         |  |   |         |  |   |         |  |   |         | 
|Production                                |   |           |  |   |         |  |   |         |  |   |         |  |   |         |  |   |           |  |   |         |  |   |         |  |   |         |  |   |         | 
|Silver (ounces)                           |   | 1,560,040 |  |   | 453,934 |  |   | 371,857 |  |   | 374,723 |  |   | 359,526 |  |   | 1,495,372 |  |   | 354,754 |  |   | 343,768 |  |   | 386,210 |  |   | 410,640 | 
|Gold (ounces)                             |   | 10,924    |  |   | 2,826   |  |   | 3,015   |  |   | 2,354   |  |   | 2,729   |  |   | 8,016     |  |   | 2,281   |  |   | 1,494   |  |   | 1,931   |  |   | 2,310   | 
|Lead (tonnes)                             |   | 962       |  |   | 289     |  |   | 226     |  |   | 245     |  |   | 202     |  |   | 941       |  |   | 212     |  |   | 222     |  |   | 266     |  |   | 241     | 
|Zinc (tonnes)                             |   | 1,478     |  |   | 446     |  |   | 369     |  |   | 351     |  |   | 312     |  |   | 1,314     |  |   | 327     |  |   | 294     |  |   | 348     |  |   | 345     | 
|                                          |   |           |  |   |         |  |   |         |  |   |         |  |   |         |  |   |           |  |   |         |  |   |         |  |   |         |  |   |         | 
|Silver equivalent
      ounces1           |   | 2,378,603 |  |   | 672,690 |  |   | 592,586 |  |   | 555,721 |  |   | 557,606 |  |   | 2,200,013 |  |   | 545,294 |  |   | 484,550 |  |   | 562,944 |  |   | 607,225 | 
|                                          |   |           |  |   |         |  |   |         |  |   |         |  |   |         |  |   |           |  |   |         |  |   |         |  |   |         |  |   |         | 
|Silver payable ounces                     |   | 1,472,269 |  |   | 446,077 |  |   | 314,146 |  |   | 395,405 |  |   | 316,641 |  |   | 1,332,262 |  |   | 425,225 |  |   | 364,684 |  |   | 193,914 |  |   | 348,439 | 
|                                          |   |           |  |   |         |  |   |         |  |   |         |  |   |         |  |   |           |  |   |         |  |   |         |  |   |         |  |   |         | 
|Cash cost per silver ounce
      (USD)2,3 | $ | 12.24     |  | $ | 14.58   |  | $ | 13.16   |  | $ | 11.42   |  | $ | 9.05    |  | $ | 10.84     |  | $ | 11.92   |  | $ | 9.02    |  | $ | 12.85   |  | $ | 10.33   | 

Total processed ore for the year ended December 31, 2012 was
230,120 tonnes, an increase of 6% over the prior year, with increases realized
at both of the Companys mines. The Guanajuato Mine Complex achieved an increase
of 3% in throughput, and the Topia mine achieved a 19% increase in throughput as
a result of increased mining activity.

Processed ore for the consolidated operations for the fourth
quarter of 2012 was 67,659 tonnes, an increase of 16% compared to the third
quarter of 2012, and an increase of 30% compared to the fourth quarter of 2011.
The increase in throughput over the third quarter of 2012 included an increase
of 17% at Topia as ore stockpiled due to water shortages in the first half of
2012 was processed during the second half of the year. The Guanajuato Mine
Complex achieved a 16% increase in throughput over the third quarter due in part
to the move from a six to seven day per week workweek. The increase in
throughput over the third quarter of 2012 included a 42% increase at Topia and a
26% increase at Guanajuato.

Overall metal production for the year ended December 31, 2012
was a record 2,378,603 Ag eq oz, representing an increase of 8% over the prior
year. The increase is attributable to increases in mined ore and throughput at
both mines and increased gold grades at the Guanajuato Mine Complex. Overall
metal production for the fourth quarter of 2012 was a quarterly record of
672,690 Ag eq oz, an increase of 14% from the third quarter of 2012 and an
increase of 23% compared to the fourth quarter in 2011. The increased metal
production is primarily the result of higher mined ore and throughput at both
operations and higher average gold grades at Guanajuato.

Consolidated cash cost per silver ounce was US$12.24 for the
year ended December 31, 2012, a 13% increase compared to US$10.84 for the year
ended December 31, 2011. The increase is attributable to higher site costs and
lower grades at Topia which resulted in higher unit production costs. In
addition, the Company saw an increase in overall smelting and refining charges
as a result of higher contractual charges for the Topia concentrates. The higher
unit production costs and smelting and refining charges were offset somewhat by
higher by-product credits as a result of higher gold production at
Guanajuato.

Consolidated cash cost per silver ounce of US$14.58 for the
fourth quarter increased from US$11.92 in the fourth quarter of 2011. Cash cost
per silver ounce at Topia increased due to lower grades which resulted in higher
unit production costs, and increased smelting and refining charges. Cash cost
per silver ounce at Guanajuato increased in the fourth quarter due to higher
unit production costs.

_________________________

|1 | Silver equivalent ounces in 2012 were established using
      prices of US$28 per oz, US$1,680 per oz, US$0.85 per lb, and US$0.85 per
      lb for silver, gold, lead and zinc, respectively, and applied to the
      recovered metal content of the concentrates that were produced by the two
  operations.                                       
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | Cash cost per silver ounce is a non-IFRS measure and is
      used by the Company to manage and evaluate operating performance at each
      of the Companys mines and is widely reported in the silver mining
      industry as a benchmark for performance, but does not have a standardized
  meaning. Refer to the Non-IFRS Measures section.
|3 | Cash cost per silver ounce for the second quarter of 2011
      presented in the table has been restated from amounts previously reported
      to reflect the application of correct foreign exchange
  rates.                                                                                                                                       

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 12

---



Topia Mine

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. Ore processed in the fourth quarter of 2012
was 17,109 tonnes of ore, representing an increase of 17% compared to the third
quarter of 2012 and also a 42% increase over the fourth quarter of the prior
year. Throughput increased over the fourth quarter of 2011 as a result of
increased mining activity and processing  which was stockpiled in the first
half of 2012 when drought conditions caused water shortages and limited the
Companys ability to process ore. Processing of the stockpiled ore commenced in
the third quarter of 2012 and the stockpile was completely processed by year
end.

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. Metal production at Topia
for the fourth quarter of 2012 was 214,598 Ag eq oz comprising 155,185 Ag oz,
171 Au oz, 289 Pb tonnes, and 446 Zn tonnes. Metal production on a Ag eq oz
basis increased 19% compared to the third quarter of 2012 as a result of higher
throughput and higher grades for all metals. Production on an Ag eq oz basis
increased 20% in the fourth quarter of 2012 compared to the fourth quarter of
2011 due mainly to increased throughput and higher gold, lead and zinc
grades.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 13

---

Topia Mine Production Data

|                                |  |         |  |  |         |  |  | 2012    |  |  |         |  |  |         |  |  |         |  |  |         |  |  | 2011    |  |  |         |  |  |         | 
|------------------------------- |  | ------- |  |  | ------- |  |  | ------- |  |  | ------- |  |  | ------- |  |  | ------- |  |  | ------- |  |  | ------- |  |  | ------- |  |  | ------- | 
|                                |  | FY      |  |  | Q4      |  |  | Q3      |  |  | Q2      |  |  | Q1      |  |  | FY      |  |  | Q4      |  |  | Q3      |  |  | Q2      |  |  | Q1      | 
|Tonnes milled                   |  | 56,098  |  |  | 17,109  |  |  | 14,593  |  |  | 11,992  |  |  | 12,404  |  |  | 46,968  |  |  | 12,056  |  |  | 12,004  |  |  | 11,895  |  |  | 11,013  | 
|                                |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         | 
|Production                      |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         | 
|Silver (ounces)                 |  | 555,710 |  |  | 155,185 |  |  | 131,865 |  |  | 148,439 |  |  | 120,221 |  |  | 535,882 |  |  | 117,182 |  |  | 137,707 |  |  | 143,774 |  |  | 137,219 | 
|Gold (ounces)                   |  | 574     |  |  | 171     |  |  | 149     |  |  | 140     |  |  | 114     |  |  | 500     |  |  | 136     |  |  | 147     |  |  | 124     |  |  | 93      | 
|Lead (tonnes)                   |  | 962     |  |  | 289     |  |  | 226     |  |  | 245     |  |  | 202     |  |  | 941     |  |  | 212     |  |  | 222     |  |  | 266     |  |  | 241     | 
|Zinc (tonnes)                   |  | 1,478   |  |  | 446     |  |  | 369     |  |  | 351     |  |  | 312     |  |  | 1,314   |  |  | 327     |  |  | 294     |  |  | 348     |  |  | 345     | 
|                                |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         | 
|Silver equivalent
      ounces1 |  | 753,298 |  |  | 214,598 |  |  | 180,627 |  |  | 196,658 |  |  | 161,415 |  |  | 789,610 |  |  | 179,008 |  |  | 197,688 |  |  | 212,108 |  |  | 200,806 | 
|                                |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         | 
|Silver payable ounces           |  | 503,559 |  |  | 129,802 |  |  | 129,101 |  |  | 137,884 |  |  | 106,772 |  |  | 453,569 |  |  | 119,155 |  |  | 113,297 |  |  | 108,487 |  |  | 112,630 | 
|                                |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         | 
|Average ore grade               |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         | 
|Silver (g/t)                    |  | 345     |  |  | 319     |  |  | 316     |  |  | 424     |  |  | 326     |  |  | 400     |  |  | 345     |  |  | 420     |  |  | 418     |  |  | 420     | 
|Gold (g/t)                      |  | 0.55    |  |  | 0.57    |  |  | 0.55    |  |  | 0.56    |  |  | 0.45    |  |  | 0.41    |  |  | 0.44    |  |  | 0.47    |  |  | 0.40    |  |  | 0.33    | 
|Lead (%)                        |  | 1.86    |  |  | 1.86    |  |  | 1.69    |  |  | 2.18    |  |  | 1.71    |  |  | 2.13    |  |  | 1.85    |  |  | 2.02    |  |  | 2.34    |  |  | 2.32    | 
|Zinc (%)                        |  | 2.91    |  |  | 2.87    |  |  | 2.78    |  |  | 3.21    |  |  | 2.73    |  |  | 3.05    |  |  | 2.97    |  |  | 2.67    |  |  | 3.18    |  |  | 3.42    | 
|                                |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         | 
|Metal recoveries                |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         | 
|Silver                          |  | 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 grades              |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         | 
|Lead                            |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         | 
|Silver (g/t)                    |  | 8,409   |  |  | 7,493   |  |  | 8,997   |  |  | 8,708   |  |  | 8,757   |  |  | 8,837   |  |  | 8,528   |  |  | 9,205   |  |  | 8,463   |  |  | 9,167   | 
|Gold (g/t)                      |  | 7.48    |  |  | 7.19    |  |  | 8.60    |  |  | 7.35    |  |  | 6.88    |  |  | 6.97    |  |  | 8.05    |  |  | 8.80    |  |  | 6.27    |  |  | 4.93    | 
|Lead (%)                        |  | 49.86   |  |  | 48.69   |  |  | 52.82   |  |  | 48.79   |  |  | 49.80   |  |  | 52.77   |  |  | 52.83   |  |  | 50.31   |  |  | 53.33   |  |  | 54.61   | 
|Zinc (%)                        |  | 10.48   |  |  | 11.48   |  |  | 10.33   |  |  | 10.49   |  |  | 9.16    |  |  | 8.84    |  |  | 9.78    |  |  | 10.68   |  |  | 8.65    |  |  | 9.46    | 
|Zinc                            |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         |  |  |         | 
|Silver (g/t)                    |  | 715     |  |  | 779     |  |  | 692     |  |  | 735     |  |  | 636     |  |  | 656     |  |  | 619     |  |  | 640     |  |  | 674     |  |  | 687     | 
|Gold (g/t)                      |  | 1.62    |  |  | 1.65    |  |  | 1.74    |  |  | 1.38    |  |  | 1.68    |  |  | 1.63    |  |  | 2.07    |  |  | 1.66    |  |  | 1.44    |  |  | 1.40    | 
|Lead (%)                        |  | 1.72    |  |  | 1.77    |  |  | 1.75    |  |  | 1.67    |  |  | 1.68    |  |  | 1.35    |  |  | 1.26    |  |  | 0.83    |  |  | 1.50    |  |  | 1.68    | 
|Zinc (%)                        |  | 51.31   |  |  | 50.66   |  |  | 50.02   |  |  | 51.71   |  |  | 53.45   |  |  | 53.93   |  |  | 53.60   |  |  | 55.49   |  |  | 52.89   |  |  | 54.08   | 



_____________________

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

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 14

---

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. The average grades
of ore processed from Topia in the fourth quarter of 2012 were 319g/t Ag,
0.57g/t Au, 1.86% Pb and 2.87% Zn, which represent increases of 1%, 4%, 10%, and
3% for Ag, Au, Pb and Zn, respectively over the third quarter of 2012. Compared
to the fourth quarter of 2011, these average grades represented an 8% and 3%
decrease for Ag and Zn, respectively, and an increase of 30% and 1% for Au and
Pb, respectively.

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. Plant metallurgical performance was satisfactory in the fourth quarter
of 2012 with metal recoveries of 88.4% for Ag, 54.1% for Au, 91.0% for Pb and
90.7% for Zn.

Topia Mine Cash Cost per Silver Ounce

|                                                                   |   | 2012   |   |   | 2011   |  
|------------------------------------------------------------------ | - | ------ | - | - | ------ | -
|(in 000s of CAD except per ounce amounts or
      noted otherwise) |   | FY     |   |   | Q4     |  
|                                                                   |   |        |   |   |        |  
|Cost of sales                                                      | $ | 11,943 |   | $ | 3,478  |  
|                                                                   |   |        |   |   |        |  
|Smelting and refining charges                                      |   | 3,536  |   |   | 953    |  
|                                                                   |   |        |   |   |        |  
|Gross by-product
      revenue1                                    |   | (4,407 | ) |   | (1,194 | )
|                                                                   |   |        |   |   |        |  
|Cost of custom milling                                             |   | (302   | ) |   | (130   | )
|                                                                   |   |        |   |   |        |  
|Cash operating costs                                               | $ | 10,770 |   | $ | 3,107  |  
|                                                                   |   |        |   |   |        |  
|                                                                   |   |        |   |   |        |  
|Cash operating costs (USD)                                         | $ | 10,787 |   | $ | 3,135  |  
|                                                                   |   |        |   |   |        |  
|Silver payable ounces (000s)                                       |   | 504    |   |   | 130    |  
|Cash cost per silver
      ounce2,3(USD)                           | $ | 21.42  |   | $ | 24.15  |  

Cash cost per silver ounce for Topia for the year ended
December 31, 2012 was US$21.42, an increase of 33% from the cash cost per silver
ounce of US$16.06 for the year ended December 31, 2011, primarily as a result of
lower silver grades in the year and increased smelting and refining charges.

Cash cost per silver ounce for Topia increased to US$24.15 in
the fourth quarter of 2012 from US$22.23 in the third quarter of 2012 due to
higher site costs and lower recoveries. Cash cost per silver ounce for Topia in
the fourth quarter of 2012 increased by 33% to US$24.15 from US$18.19 in the
fourth quarter of 2011. The increase is mainly attributable to lower silver
grades as well as higher smelting and refining charges.

Guanajuato Mine Complex

Processed ore at Guanajuato for the year ended December 31,
2012 was 174,022 tonnes, an increase of 3% over the prior year. Processed ore at
Guanajuato was 50,550 tonnes for the fourth quarter of 2012, an increase of 16%
compared to the third quarter of 2012, and an increase of 26% compared to the
fourth quarter of 2011. The increase over the same period from the prior year is
due in part to the move from a six day to seven day per week workweek, which
began in June 2012.

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. Metal production of 458,092 Ag eq oz for the fourth
quarter of 2012 represented an increase of 11% compared to the third quarter of
2012 and an increase of 25% over the same quarter in the prior year due
primarily to increased throughput as a result of increases in mining
activity.

_______________________

|1 | Gross by-product revenue is defined as revenue from the
      by-products of silver, specifically gold at Guanajuato and gold, lead and
      zinc at Topia, net of the respective smelting and refining
  charges.                                                                                                                                   
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | Cash cost per silver ounce is a non-IFRS measure and is
      used by the Company to manage and evaluate operating performance at each
      of the Companys mines and is widely reported in the silver mining
      industry as a benchmark for performance, but does not have a standardized
  meaning. Refer to the Non-IFRS Measures section.
|3 | Cash cost per silver ounce for the second quarter of 2011
      presented in the table has been restated from amounts previously reported
      to reflect the application of correct foreign exchange
  rates.                                                                                                                                       

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 15

---

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. Silver production for the fourth quarter of 2012 of 298,750 ounces was
up 24% compared to the third quarter of 2012, and up 26% compared to the fourth
quarter of 2011. Gold production for 2012 at Guanajuato was 10,350 ounces, a
record and an increase of 38% over the prior year. Guanajuatos gold production
for the fourth quarter of 2,656 ounces, represented a decrease of 7% compared to
the third quarter of 2012 and an increase of 24% compared to the fourth quarter
of 2011. 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
199g/t Ag and 2.02g/t Au, as compared to 199g/t Ag and 1.52g/t Au for 2011.
Average ore grades for the fourth quarter of 2012, of 206g/t Ag and 1.80g/t Au,
represented an increase of 10% and a decrease of 23% over the Ag and Au grades,
respectively, for the third quarter of 2012. Compared to the fourth quarter of
2011, the fourth quarter 2012 ore grades represent a 0.5% and 2% decrease from
207g/t Ag and 1.84g/t Au, respectively.

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. Recoveries
of 89.2% for silver and 90.9% for gold were achieved in the quarter ended
December 31, 2012.

Guanajuato Mine Complex Production Data

|                                |  |           |  |  |         |  |  | 2012    |  |  |         |  |  |         |  |  |           |  |  |         |  |  | 2011    |  |  |         |  |  |         | 
|------------------------------- |  | --------- |  |  | ------- |  |  | ------- |  |  | ------- |  |  | ------- |  |  | --------- |  |  | ------- |  |  | ------- |  |  | ------- |  |  | ------- | 
|                                |  | FY        |  |  | Q4      |  |  | Q3      |  |  | Q2      |  |  | Q1      |  |  | FY        |  |  | Q4      |  |  | Q3      |  |  | Q2      |  |  | Q1      | 
|Tonnes milled                   |  | 174,022   |  |  | 50,550  |  |  | 43,714  |  |  | 40,964  |  |  | 38,794  |  |  | 169,213   |  |  | 40,114  |  |  | 41,371  |  |  | 44,748  |  |  | 42,980  | 
|                                |  |           |  |  |         |  |  |         |  |  |         |  |  |         |  |  |           |  |  |         |  |  |         |  |  |         |  |  |         | 
|Production                      |  |           |  |  |         |  |  |         |  |  |         |  |  |         |  |  |           |  |  |         |  |  |         |  |  |         |  |  |         | 
|Silver (ounces)                 |  | 1,004,331 |  |  | 298,750 |  |  | 239,992 |  |  | 226,284 |  |  | 239,305 |  |  | 959,490   |  |  | 237,572 |  |  | 206,061 |  |  | 242,436 |  |  | 273,421 | 
|Gold (ounces)                   |  | 10,350    |  |  | 2,656   |  |  | 2,866   |  |  | 2,213   |  |  | 2,615   |  |  | 7,516     |  |  | 2,145   |  |  | 1,347   |  |  | 1,807   |  |  | 2,217   | 
|                                |  |           |  |  |         |  |  |         |  |  |         |  |  |         |  |  |           |  |  |         |  |  |         |  |  |         |  |  |         | 
|Silver equivalent
      ounces1 |  | 1,625,305 |  |  | 458,092 |  |  | 411,958 |  |  | 359,063 |  |  | 396,192 |  |  | 1,410,403 |  |  | 366,286 |  |  | 286,862 |  |  | 350,836 |  |  | 406,419 | 
|                                |  |           |  |  |         |  |  |         |  |  |         |  |  |         |  |  |           |  |  |         |  |  |         |  |  |         |  |  |         | 
|Silver payable ounces           |  | 968,710   |  |  | 316,275 |  |  | 185,045 |  |  | 257,521 |  |  | 209,869 |  |  | 878,693   |  |  | 306,070 |  |  | 251,387 |  |  | 85,427  |  |  | 235,809 | 
|                                |  |           |  |  |         |  |  |         |  |  |         |  |  |         |  |  |           |  |  |         |  |  |         |  |  |         |  |  |         | 
|Average ore grade               |  |           |  |  |         |  |  |         |  |  |         |  |  |         |  |  |           |  |  |         |  |  |         |  |  |         |  |  |         | 
|Silver (g/t)                    |  | 199       |  |  | 206     |  |  | 188     |  |  | 189     |  |  | 213     |  |  | 199       |  |  | 207     |  |  | 175     |  |  | 193     |  |  | 222     | 
|Gold (g/t)                      |  | 2.02      |  |  | 1.80    |  |  | 2.22    |  |  | 1.82    |  |  | 2.30    |  |  | 1.52      |  |  | 1.84    |  |  | 1.12    |  |  | 1.38    |  |  | 1.75    | 
|                                |  |           |  |  |         |  |  |         |  |  |         |  |  |         |  |  |           |  |  |         |  |  |         |  |  |         |  |  |         | 
|Metal recoveries                |  |           |  |  |         |  |  |         |  |  |         |  |  |         |  |  |           |  |  |         |  |  |         |  |  |         |  |  |         | 
|Silver                          |  | 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 grades              |  |           |  |  |         |  |  |         |  |  |         |  |  |         |  |  |           |  |  |         |  |  |         |  |  |         |  |  |         | 
|Silver (g/t)                    |  | 10,284    |  |  | 9,912   |  |  | 10,845  |  |  | 10,641  |  |  | 9,917   |  |  | 10,099    |  |  | 10,910  |  |  | 9,280   |  |  | 10,485  |  |  | 9,797   | 
|Gold (g/t)                      |  | 106       |  |  | 88      |  |  | 130     |  |  | 104     |  |  | 108     |  |  | 79        |  |  | 99      |  |  | 61      |  |  | 78      |  |  | 79      | 

_______________________

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

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 16

---



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. 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. Further improvements in ore quality are expected in
the first quarter of 2013.

Production in the Guanajuatito area for the year totaled 16,611
tonnes at grades of 168g/t Ag and 0.89g/t Au. 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
Vicente 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.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 17

---

Guanajuato Mine Complex Cash Cost per Silver Ounce

|                                                                   |   | 2012    |   |   | 2011   |  
|------------------------------------------------------------------ | - | ------- | - | - | ------ | -
|(in 000s of CAD except per ounce
      amounts or noted otherwise) |   | FY      |   |   | Q4     |  
|                                                                   |   |         |   |   |        |  
|Cost of sales                                                      | $ | 20,920  |   | $ | 7,639  |  
|                                                                   |   |         |   |   |        |  
|Smelting and refining
      charges                                |   | 3,012   |   |   | 891    |  
|                                                                   |   |         |   |   |        |  
|Gross by-product
      revenue1                                    |   | (16,698 | ) |   | (5,187 | )
|                                                                   |   |         |   |   |        |  
|Cash operating
      costs                                         |   | 7,234   |   | $ | 3,343  |  
|                                                                   |   |         |   |   |        |  
|Cash operating costs (USD)                                         |   | 7,234   |   | $ | 3,370  |  
|                                                                   |   |         |   |   |        |  
|Silver payable ounces
      (000s)                                 |   | 969     |   |   | 316    |  
|                                                                   |   |         |   |   |        |  
|Cash cost per silver
      ounce2,3 (USD)                          | $ | 7.47    |   | $ | 10.66  |  

Cash cost per silver ounce for the year ended December 31, 2012
of US$7.47 represented an 8% decrease compared to the year ended December 31,
2011. The decrease in cash cost per silver ounce is mainly attributable to
higher gold by-product revenues per silver payable ounce.

Cash cost per silver ounce at Guanajuato for the fourth quarter
of 2012 was US$10.66, compared to US$6.84 realized in the third quarter of 2012
and US$9.48 in the fourth quarter of 2011. The increase was primarily due to
increased site costs which translated to an increase in unit production
costs.

RESOURCE AND EXPLORATION UPDATE

Topia Mine

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).

The surface drilling in 2012, along with fourth quarter
development on the 1510 level at Durangueno has given a better understanding of
the anastomosing nature of the San Gregorio, Oxidada, San Pablo, and Higueras
veins. Surface drilling was also conducted along the south-west extension of the
El Rosario vein. The shallow holes had good vein intersections while the deeper
intersects were too low in the epithermal system. ST12-195 (El Rosario) had the
widest intersection of any at Topia mine to date with a 3.4 metre intersection
of barite breccia and excellent galena and sphalerite. Surface drilling during
2012 targeted the Argentina, Santa Cruz (hanging wall vein to Argentina), San
Gregorio, Oxidada, Oxi, Higueras, El Rosario, Animas, and Australia veins.

Drilling during the fourth quarter of 2012 was conducted on the
Madre, Argentina, Recompensa, Don Benito, and La Oliva veins.

On January 14, 2013, the Company announced the completion of
the Mineral Resource estimate from the Topia Mine. This updated Mineral Resource
estimate is valid as of June 30, 2012.

_____________________

|1 | Gross by-product revenue is defined as revenue from the
      by-products of silver, specifically gold at Guanajuato and gold, lead and
      zinc at Topia, net of the respective smelting and refining
  charges.                                                                                                                                   
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | Cash cost per silver ounce is a non-IFRS measure and is
      used by the Company to manage and evaluate operating performance at each
      of the Companys mines and is widely reported in the silver mining
      industry as a benchmark for performance, but does not have a standardized
  meaning. Refer to the Non-IFRS Measures section.
|3 | Cash cost per silver ounce for the second quarter of 2011
      presented in the table has been restated from amounts previously reported
      to reflect the application of correct foreign exchange
  rates.                                                                                                                                       

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 18

---

Topia
      Measured, Indicated and Inferred Mineral Resources  June 30, 2012Tonnage (t)
    Ag (g/t)
    Au (g/t)
    Pb (%)
    Zn (%)
    Ag eq (oz)Measured
    60,400
    801
    1.65
    6.73
    5.20
    2,230,000Indicated
    95,400
    809
    1.35
    6.33
    3.70
    3,370,000Inferred
    273,000
    837
    0.8
    5.70
    3.90
    9,540,000


The updated estimate represents a decrease over the resource
reported in 2011 (see news release March 7, 2011), however a direct comparison
of the present and past mineral resources is not accurate due to differing metal
prices and minimum Net Smelter Return (NSR) values between the two dates.
Aside from normal mine depletion, the decrease in mineral resources can be
attributed to a combination of factors, some of which resulted in some
pre-existing resource blocks being dropped out of the model. For example, 1)
change in metal prices and less silver equivalent contribution from base metals,
2) increased costs and cut-off NSR, 3) increase in the mining dilution provision
in the NSR calculation from 50 to 100%, 4) better reconciliation guiding metal
capping, and 5) a demonstrated insufficient continuity of mineralization, which
resulted in a portion of Inferred Mineral Resources from this area being
removed. This overall decrease has been partially countered by some excellent
exploration successes at El Rosario, San Pablo, Oxi, Oxidada, and Higueras.

Guanajuato Mine Complex

A total of 9,119 metres (42 holes) of underground drilling was
completed in the fourth quarter of 2012 for a total of 29,254 metres (217 holes)
for the year ended December 31, 2012. Fourth quarter drilling was completed at
the Guanajuatito, Cata, Pozos, Santa Margarita, Valenciana, and San Cayetano
(Rayas area) zones.

Drilling in the Guanajuatito area, in the northwest part of the
Guanajuato Mine Complex, has intersected mineralization both to the northwest
(GTTO NW), and to the southeast (GTTO SE) of the existing development, between
the 100 and 245 metre levels. The GTTO NW zone is approximately 50 metres in
strike length, 140 metres down the dip, and open to depth and upward. The GTTO
SE zone is approximately 50 metres along strike, 70 metres down the dip, and
open to depth.

Highlights of the drilling in the GTTO NW zone include 2.25
metres grading 380g/t Ag and 1.28g/t Au in UGG12-057, and 1.10 metres grading
1,010g/t Ag and 6.67g/t Au in UGG12-061 (within a wider interval grading 285g/t
Ag and 2.61g/t Au over 4.40 metres). Drilling in the GTTO SE zone was
highlighted by an intercept of 1.15 metres grading 1,460g/t Ag and 4.79g/t Au in
UGG12-070.

In the Valenciana Mine area, remnants of old stope walls and
pillars intersected in drilling above the 390 metre level include 7.45 metres
grading 275g/t Ag and 2.47g/t Au in UGV12-039, 1.10 metres grading 299g/t Ag and
3.66g/t Au in UGV 12-050, and 1.30 metres grading 2,900g/t Ag and 26.00g/t Au in
UGV12-051. Drilling below the 390 metre level has intersected new mineralization
including 3.10 metres grading 624g/t Ag and 4.59g/t Au in UGV12-012.

The pillars and hanging wall and footwall stope walls are being
tested mainly from drill stations on a new footwall ramp connecting the 320 Cata
level (southeast side of the Valenciana deposit) to the 245 Valenciana level
(northwest side of the Valenciana deposit). Drilling in 2013 will continue to
test the old Valenciana Mine area that extends approximately 400 metres along
strike and 280 metres on the dip.

Detailed exploration drilling northwest of the stoping on Veta
Madre has intersected multiple zones. Drill hole UG12-172 intersected 1.2 metre
grading, 382g/t Ag and 0.56g/t Au in the Contact zone, and 2.8 metre grading,
596g/t Ag and 1.35g/t Au in the Veta Madre zone. From the same location, drill
hole UGC12-043 intersected 2.85 metre grading, 318g/t Ag and 5.97g/t Au in the
Contact zone, and 2.10 metre grading 303g/t Ag and 0g/t Au in the Veta Madre
zone.

Drilling at Santa Margarita down to the 510 metre level
continues to improve ore definition of the multiple gold-rich veins and
stockworks, hence guiding mine development.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 19

---

On May 9, 2012, the Company announced the completion of two
Mineral Resource estimates at the Companys Guanajuato Mine Complex and its San
Ignacio Project in Guanajuato, Mexico (refer to May 9, 2012 news release and the
corresponding technical reports filed on SEDAR dated June 25, 2012 and June 26,
2012, respectively).

The new Measured and Indicated Mineral Resource at the
Guanajuato Mine Complex contains 5,649,000 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. For now, the Inferred resources are being reported separately
as different parameters were used in their estimation.

The Measured and Indicated Mineral Resources of 5,649,000 Ag eq
oz and Inferred mineral resources estimated at 2,503,000 Ag eq oz, are contained
in the Cata Clavo, Los Pozos, Santa Margarita and Guanajuatito zones. The
Guanajuatito zone, with its first estimate, has been greatly expanded from
present mining on the 120 and 160 metre levels to the 390 metre level and is
open to depth, illustrating that additional mineralization may be found and
could add to inventory with systematic and focused drilling.

The new resource base replaces production from the Guanajuato
Mine Complex during the past year and a half, and adds additional resources of
the San Ignacio Project.

The updated Mineral Resource estimate for the Guanajuato Mine
Complex is valid as of January 31, 2012.

Guanajuato Measured, Indicated and Inferred
      Mineral Resources  January 31, 2012 (Cut-off 50 g/t Ag eq)Tonnage (Kt)
    Ag (g/t)
    Ag (oz)
    Au (g/t)
    Au (oz)
    Ag eq (oz)Measured
    275.8
    264
    2,339,900
    2.21
    19,570
    3,530,000Indicated
    232.6
    122
    909,781
    2.66
    19,890
    2,119,000Inferred
    223.2
    221
    1,587,000
    2.10
    15,060
    2,503,000


Exploration drilling 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. For
2013, the Company plans approximately 24,000 metres of exploration drilling at
the Guanajuato Mine Complex.

San Ignacio Project

The San Ignacio Project covers approximately four kilometres of
strike length on the La Luz vein system, which is parallel to, and five
kilometres west of, the principal Veta Madre structure that hosts Great
Panther's Guanajuato Mine Complex.

The property was part of the Guanajuato Mine purchase by Great
Panther in 2005 from a mining cooperative called the Sociedad Cooperativa
Minero Metalúrgica Santa Fe de Guanajuato which owned these since 1939. Due to
the Companys focus on the main Guanajuato Mine Complex, it did not commence any
work at San Ignacio until 2010.

The Company did not conduct any drilling on San Ignacio in the
third and fourth quarters of 2012 but completed 9,310 metres of drilling at the
Project in the first half of 2012. Further surface drilling has been deferred,
awaiting the completion of preliminary underground development on the Melladito,
Intermediate, and Nombre de Dios zones.

During the first quarter of 2012, a total of 4,535 metres of
drilling in 18 holes was completed on the San Ignacio Project. This was
sufficient to infill, and to extend the combined strike length of the four
dominant known veins to 700 metres. This includes the initial 73 drill holes and
is the basis for the second version of the San Ignacio Mineral Resource
estimate.

Highlights from section 1000N include an intersection from the
Nombre de Dios 2 vein of 3.9 metres (2.99 metres true width) grading 195g/t Ag
and 3.70g/t Au in ESI12-067. Fill-in hole ESI12-073 includes an intersection
from the Intermediate vein of 4.30 metres (2.76 metres true width) grading
252g/t Ag and 3.97g/t Au, and an intersection from the Melladito vein of 4.70
metres (2.70 metres true width) grading 102g/t Ag and 1.95g/t Au.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 20

---

During the second quarter of 2012, surface drilling focused on
an area from 300-400N and on an area from 0-200S. The drilling continued to
extend the limits of the known mineralized zones beyond the resource model.

In the 300-400N area the mineralized Intermediate vein
continues south of the model. Mineralization in the Nombre de Dios, Melladito,
and Intermediate is typical with highly variable widths and grades in the
structures. Highlights include 2.65 metres grading 533g/t Ag and 7.59g/t Au in
the Intermediate vein and 1.15 metres grading 249g/t Ag and 2.99g/t Au in the
Nombre de Dios vein. In addition, new but as yet irregular, high grade
silver-gold veins between the Intermediate and Nombre de Dios vein structures
have also been discovered. These zones returned intercepts of 794g/t Ag and
3.70g/t Au over 2.22 metres, as well as 422g/t Ag and 10.50g/t Au over 0.60
metres, and 131g/t Ag and 19.20g/t Au over 0.50 metres.

As noted above, the Company released an updated Mineral
Resource estimate to March 31, 2012 for the San Ignacio Project on May 9, 2012
(refer to May 9, 2012 news release and the corresponding technical report filed
on SEDAR dated June 26, 2012). This updated Mineral Resource estimate at San
Ignacio supersedes the original estimate. The new Inferred Mineral Resource is
estimated to contain 6,894,000 Ag eq oz in 826,000 tonnes averaging 121g/t Ag
and 2.28g/t Au (using a 125g/t Ag eq cut-off). This updated estimate both fills
in and expands the strike length of the mineralized zones to 650 metres. This
estimate increases the tonnage by 35%, the silver content by 29%, the gold
content by 51% and the Ag eq oz by 53% over the previous estimate. It should be
noted that this estimate used only four of the seven previously identified
zones, leaving three zones to be more thoroughly tested at a later date.

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


El Horcon Project

On September 5, 2012, the Company completed the purchase of a
100% interest in the El Horcon Silver-Gold Project in Jalisco State, Mexico for
total cash consideration of US$1.6 million. El Horcon covers 7,908 hectares in
17 contiguous mining concessions and is located 60 kilometres northwest of the
Companys Guanajuato Mine Complex, allowing for the potential to become a
satellite mine for the Companys Guanajuato operations. El Horcon is a past
producing mine and the Company expects to commence a drill program before the
end of the second quarter of 2013 to delineate a resource.

During the fourth quarter of 2012, exploration activities
included the re-sampling of historical underground workings, geological mapping,
and surface sampling of all veins and mineralized structures. In total, 1,187
samples have been submitted for assay and 16 underground workings have been
geologically mapped and sampled. The majority of the sampling corresponds to
surface exposures of veins and mineralized structures. Geological mapping has
outlined multiple vein zones along a northwest trend of five kilometers. The
baseline studies for the Ministry of Environmental and Natural Resources in
Mexico (SEMARNAT) have been completed, along with the location of 24 drill
sites, and the permit to drill at El Horcon has been submitted for approval.

A surface drill program is planned to commence before the end
of the second quarter of 2013. It will consist of 30 drill holes for a total of
3,000 metres. The program is laid out along an 800 metre length of the
Diamantillo vein, and will test the Diamantillo vein as well as various splays
and nearby parallel structures and veins.

As of the date of this MD&A, 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.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 21

---

Santa Rosa Project

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.

SELECTED QUARTERLY INFORMATION

The following table sets out selected quarterly financial
results which have been prepared in accordance with International Financial
Reporting Standards (IFRS) except as noted:

|(in thousands, except per share                                                  |   |         |  |   |         |  |   |         |  |   |         |  |   |         |  |   |         |  |   |         |  |   |         | 
|-------------------------------------------------------------------------------- | - | ------- |  | - | ------- |  | - | ------- |  | - | ------- |  | - | ------- |  | - | ------- |  | - | ------- |  | - | ------- | 
|amounts)                                                                         |   | Q4 2012 |  |   | Q3 2012 |  |   | Q2 2012 |  |   | Q1 2012 |  |   | Q4 2011 |  |   | Q3 2011 |  |   | Q2 2011 |  |   | Q1 2011 | 
|Revenue                                                                          | $ | 17,789  |  | $ | 15,286  |  | $ | 14,439  |  | $ | 13,625  |  | $ | 17,520  |  | $ | 16,278  |  | $ | 8,560   |  | $ | 15,460  | 
|Cost of sales (excluding amortization,
      depletion and share-based payments) |   | 11,117  |  |   | 7,566   |  |   | 8,346   |  |   | 5,835   |  |   | 8,870   |  |   | 6,581   |  |   | 4,193   |  |   | 5,831   | 
|Earnings from mining
      operations1                                           |   | 3,319   |  |   | 5,791   |  |   | 3,771   |  |   | 6,325   |  |   | 6,032   |  |   | 8,320   |  |   | 3,951   |  |   | 8,613   | 
|Net income (loss) for the period                                                 |   | (1,285) |  |   | 1,758   |  |   | 354     |  |   | 4,683   |  |   | (1,419) |  |   | 3,415   |  |   | 2,501   |  |   | 7,009   | 
|Basic earnings (loss) per
      share                                            |   | (0.01)  |  |   | 0.01    |  |   | 0.00    |  |   | 0.03    |  |   | (0.01)  |  |   | 0.03    |  |   | 0.02    |  |   | 0.06    | 
|Diluted earnings (loss) per share                                                |   | (0.01)  |  |   | 0.01    |  |   | 0.00    |  |   | 0.03    |  |   | (0.01)  |  |   | 0.02    |  |   | 0.02    |  |   | 0.05    | 
|Adjusted
      EBITDA2                                                           |   | 3,800   |  |   | 4,961   |  |   | 3,691   |  |   | 4,441   |  |   | 6,265   |  |   | 7,752   |  |   | 2,833   |  |   | 7,874   | 
|Cash and cash equivalents (including
      short-term investments)               |   | 25,899  |  |   | 26,827  |  |   | 28,675  |  |   | 40,322  |  |   | 39,437  |  |   | 35,074  |  |   | 36,760  |  |   | 15,166  | 
|Total assets                                                                     |   | 116,729 |  |   | 114,057 |  |   | 110,717 |  |   | 110,024 |  |   | 102,944 |  |   | 95,513  |  |   | 91,938  |  |   | 66,154  | 
|Total non-current liabilities                                                    |   | 8,193   |  |   | 5,569   |  |   | 6,128   |  |   | 5,997   |  |   | 3,978   |  |   | 1,758   |  |   | 1,917   |  |   | 1,901   | 
|Working capital                                                                  | $ | 44,539  |  | $ | 45,911  |  | $ | 49,889  |  | $ | 53,537  |  | $ | 53,810  |  | $ | 53,783  |  | $ | 51,947  |  | $ | 29,291  | 

Refer to the Results of Operations section for a complete
discussion of the financial results for the quarter and year ended December 31,
2012.

____________________________

|1 | Earnings from mining operations are defined as gross
  profit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | Adjusted EBITDA is a non-IFRS measure in which standard
      EBITDA (earnings before interest, taxes, depreciation and amortization) is
      adjusted for share- based payments expense, foreign exchange gains or
      losses, and non-recurring items. The Company has updated its definition of
      adjusted EBITDA and has restated 2011 comparative figures presented above
      and elsewhere in this MD&A to reflect the exclusion of interest
      income. The Company does not consider these changes to be material. Refer
      to the Non-IFRS Measures section for the definition and a reconciliation
      of standardized and adjusted EBITDA to the financial
  statements.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 22

---

SELECTED ANNUAL INFORMATION

The following table sets out selected annual financial results
which have been prepared in accordance with International Financial Reporting
Standards (IFRS) except as noted:

|(in thousands, except per share amounts)                                         |  |   |         |  |   |         |  |   |        | 
|-------------------------------------------------------------------------------- |  | - | ------- |  | - | ------- |  | - | ------ | 
|                                                                                 |  |   | 2012    |  |   | 2011    |  |   | 2010   | 
|Revenue                                                                          |  | $ | 61,139  |  | $ | 57,818  |  | $ | 42,206 | 
|Cost of sales (excluding amortization, depletion and
      share-based payments) |  |   | 32,864  |  |   | 25,475  |  |   | 21,161 | 
|Earnings from mining
      operations1                                           |  |   | 19,206  |  |   | 26,916  |  |   | 16,447 | 
|Net income for the year                                                          |  |   | 5,510   |  |   | 11,506  |  |   | 10,660 | 
|Basic earnings per share                                                         |  |   | 0.04    |  |   | 0.09    |  |   | 0.09   | 
|Diluted earnings per share                                                       |  |   | 0.04    |  |   | 0.08    |  |   | 0.09   | 
|Adjusted EBITDA2                                                                 |  |   | 16,893  |  |   | 24,723  |  |   | 15,068 | 
|Cash and cash equivalents (including short-term
      investments)               |  |   | 25,899  |  |   | 39,517  |  |   | 13,967 | 
|Total assets                                                                     |  |   | 116,729 |  |   | 102,944 |  |   | 55,451 | 
|Total non-current liabilities                                                    |  |   | 8,193   |  |   | 3,978   |  |   | 2,160  | 
|Working capital                                                                  |  | $ | 44,539  |  | $ | 53,810  |  | $ | 18,812 | 

QUARTERLY TRENDS AND MARKET DATA

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 mineral 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 produced, metal prices and terms of
sales agreements.

There can also be significant variances in the Companys
reported net income from quarter to quarter arising from factors that are often
difficult to anticipate in advance or to predict from past results. For example,
the granting of incentive stock options, which results in the recording of
amounts for share-based payments can be quite large in any given quarter.
Fluctuations in foreign currency, specifically the Mexican peso and US dollar
against the Canadian dollar may also result in considerable variances in foreign
exchange gains and losses due primarily to a significant intercompany loan which
is re-valued for each period end. Fluctuations in the price of silver and gold,
and to a lesser extent, lead and zinc, can also have a significant impact on the
Companys net income.

________________________

|1Earnings from mining operations are defined
      as gross profit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2Adjusted EBITDA is a non-IFRS measure in
      which standard EBITDA (earnings before interest, taxes, depreciation and
      amortization) is adjusted for share- based payments expense, foreign
      exchange gains or losses, and non-recurring items. The Company has updated
      its definition of adjusted EBITDA and has restated 2011 comparative
      figures presented above and elsewhere in this MD&A to reflect the
      exclusion of interest income. The Company does not consider these changes
      to be material. Refer to the Non-IFRS Measures section for the
      definition and a reconciliation of standardized and adjusted EBITDA to the
      financial statements.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 23

---

The Companys past quarterly mineral sales revenue is as
follows:



The Companys average realized metal prices and the average
Canadian exchange rates against the United States dollar and Mexican peso for
the quarter and year ended December 31, 2012 and 2011 are as follows:

Year Ended
    
    
    Year Ended2012 Q4
    
    
    2011 Q4
    
    
    Dec 31, 2012
    
    
    Dec 31, 2011Silver (U.S. $ / oz.)
    $
    31.94
    
    $
    30.86
    
    $
    30.93
    
    $
    34.71Gold (U.S. $ / oz.)
    $
    1,697.32
    
    $
    1,655.99
    
    $
    1,671.88
    
    $
    1,627.04Lead (U.S. $ / lb.)
    $
    1.01
    
    $
    0.91
    
    $
    0.95
    
    $
    1.07Zinc (U.S. $ / lb.)
    $
    0.90
    
    $
    0.87
    
    $
    0.89
    
    $
    1.00USD / CAD
    
    1.0087
    
    
    0.978
    
    
    1.0007
    
    
    1.011MXP / CAD
    
    13.053
    
    
    13.330
    
    
    13.154
    
    
    12.542


|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 24

---

RESULTS OF OPERATIONS

Year Ended December 31, 2012

Revenue from the sale of metals in concentrate is recognized in
the financial statements when it is probable that the economic benefits
associated with the transaction will flow to the Company, the risks and rewards
of ownership are transferred to the customer and the revenue can be reliably
measured. Revenues from the sale of metals in concentrate are recorded in the
statements of comprehensive income net of treatment, refining and penalty charges paid to the
buyer under the terms of the sales contract and are recognized based on quoted
market prices in periods subsequent to the date of sale. The estimated revenue
on the sale of metals in concentrate is recorded based on forward metal prices
for the expected date of final settlement. As a result, revenues include
estimated prices for sales in the period, adjusted at period-end based on
expected silver, gold, lead and zinc prices for final settlement, as well as
price adjustments for sales that occurred in prior periods, based on the actual
prices received. These adjustments also reflect changes arising from final
weight and assay calculations.

Details of revenue, cost of sales and gross profit are as
follows:

2012
    
    
    %
      of
    
    
    2011
    
    
    %
      of(in thousands)
    
    
    
    
    Revenue
    
    
    
    
    
    RevenueRevenue
    $
    61,139
    
    
    100%
    
    $
    57,818
    
    
    100%Cost of salesProduction costs
    
    32,864
    
    
    54%
    
    
    25,475
    
    
    44%Amortization and depletion
    
    8,684
    
    
    14%
    
    
    4,465
    
    
    7%Share-based payments
    
    385
    
    
    1%
    
    
    962
    
    
    2%41,933
    
    
    69%
    
    
    30,902
    
    
    53%Gross profit
    $
    19,206
    
    
    31%
    
    $
    26,916
    
    
    47%


For the year ended December 31, 2012, the Company earned
revenues of $61.1 million, compared to $57.8 million for the year ended December
31, 2011, an increase of 6%. The increase is primarily due to the result of a
16% increase in silver equivalent ounces sold in 2012 as compared to 2011,
offset by a decrease in average realized metals prices ($30.93 in 2012 compared
to $34.71 in 2011). The Company recognized revenue on shipments representing 2.2
million silver equivalent ounces in 2012 as compared to 1.9 million silver
equivalent ounces in 2011.

Revenue related to contained metals in concentrates for the
years ended December 31, 2012 and 2011 is comprised as follows:

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


For 2012, the Company had contracts in place for all of its
planned concentrate production by the start of the second quarter of the year.
The Companys concentrate inventory balances arise due to shipments which are in
transit at the end of the reporting period.

Cost of sales, excluding amortization and depletion and
share-based payments, was $32.9 million for the year ended December 31, 2012
compared to $25.5 million for 2011. The increase in cost of sales, excluding
amortization and depletion and share-based payments is attributable to increased
silver payable ounces sold, higher site costs at Guanajuato and Topia, and lower grades at
Topia which resulted in higher unit cost of sales. Silver grades at Topia were
345g/t in 2012, a 14% decrease from the silver grades realized in 2011.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 25

---

Cost of sales before non-cash items as a percentage of revenues
was 54% for 2012, compared to 44% in 2011. The increase is a due to an increase
in unit production costs.

Amortization and depletion of mineral properties, plant and
equipment relating to cost of sales for the year ended December 31, 2012 was
$8.7 million, compared to $4.5 million for the year ended December 31, 2011. The
increase in amortization expense is due to  increased
investments in mine development, exploration of operating mines, and plant and
equipment during 2012. Share-based payments relating to cost of sales for the
year ended December 31, 2012 were $0.4 million compared to $1.0 million for the
year ended December 31, 2011.

For the year ended December 31, 2012, the Company earned gross
 profit of $19.2 million compared to $26.9 million for the year ended December
31, 2011. The decrease in gross profit is due to higher unit cost of sales and
higher amortization and depletion charges realized as a result of increased
investment in mineral properties, plant and equipment over the past year.

For the year ended December 31, 2012, the Company had a gross
profit percentage of 31% compared to 47% for the year ended December 31, 2011.
The lower gross profit percentage is attributed to lower average realized silver
prices, higher unit cost of sales, and higher amortization and depletion
charges.

General and administrative expenses were $10.1 million for the
year ended December 31, 2012, compared to $8.6 million for the year ended
December 31, 2011. The increase over the prior year is the result of a one-time
payment of $0.7 million in connection with the retirement of an executive
director and a $0.3 million increase in occupancy costs reflecting a new office
lease and the remaining payments on the lease for the former premises. Other
factors in the increase include a one-time tax assessment in Mexico and an
increase in salaries and wages.

Exploration and evaluation expenses were $2.4 million for the
year ended December 31, 2012 compared to $0.9 million for the year ended
December 31, 2011. The increase over the prior year is primarily due to an
increase in exploration and business development activities outside of the
Companys operating mines. These include exploration activities at Santa Rosa
and the El Horcon Project and increased evaluation activities in connection with
prospective acquisitions.

Finance and other income was $3.0 million for the year ended
December 31, 2012, as compared to finance and other expense  of $3.9 million
for the year ended December 31, 2011. The increase is primarily attributable to
favourable fluctuations in foreign exchange rates, primarily the US dollar and
Mexican peso compared to the Canadian dollar. In 2012, the Company recorded a
foreign exchange gain of $2.8 million compared to a foreign exchange loss of
$4.6 million in 2011. Foreign exchange gains and losses arise from the
translation of foreign denominated transactions and balances relative to the
functional currency of the Companys subsidiaries and the Companys reporting
currency. The Company has significant Canadian and US dollar loans receivable
from one of its Mexican subsidiaries and fluctuations in the Mexican peso create
significant unrealized foreign exchange gains and losses on the loans owing to
the Canadian parent. These unrealized gains and losses are recognized in the
consolidated net income of the Company.

The Company recorded income tax expense of $4.2 million for
year ended December 31, 2012, consisting of $0.6 million in current income tax
expense and $3.6 million in deferred tax expense. This compares to $2.0 million
in income tax expense for the year ended December 31, 2011, consisting of $0.1
million current tax expense and $1.9 million deferred tax expense. The Company
incurs deferred income tax expense as a result of capital expenditures which,
for tax purposes, are deductible at a faster rate than for accounting purposes.
During 2012 the Company saw in increase in such expenditures.

Net income for the year ended December 31, 2012 was $5.5
million, which compares to net income of $11.5 million for the year ended
December 31, 2011. The decrease in net income is primarily attributable to a
decrease in gross profit of $7.7 million, an increase in general and
administrative expenses of $1.5 million, an increase in exploration and
evaluation expenses of $1.5 million, and an increase in tax expense of $2.2
million. These were offset by an increase in finance and other income of $6.9
million resulting primarily from foreign exchange gains.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 26

---

Adjusted EBITDA1was $16.9 million for the year
ended December 31, 2012 compared to $24.7 million for the year ended December
31, 2011. The decrease in adjusted EBITDA primarily reflects a decrease in gross
profit and an increase in general and administrative expenses before
amortization and share-based payment expenses, as well as an increase in
exploration and evaluation expenses.

Three Months Ended December 31, 2012

Details of revenue, cost of sales and gross profit for the
three months ended December 31, 2012 and 2011 are as follows:

Q4
      2012
    
    
    %
      of
    
    
    Q4
      2011
    
    
    %
      of(in thousands)
    
    
    
    
    Revenues
    
    
    
    
    
    RevenuesRevenue
    $
    17,789
    
    
    100%
    
    $
    17,520
    
    
    100%Cost of salesProduction costs
    
    11,117
    
    
    63%
    
    
    8,870
    
    
    51%Amortization and depletion
    
    3,256
    
    
    18%
    
    
    1,656
    
    
    10%Share-based payments
    
    98
    
    
    0%
    
    
    962
    
    
    5%14,471
    
    
    81%
    
    
    11,488
    
    
    66%Gross profit
    $
    3,318
    
    
    19%
    
    $
    6,032
    
    
    34%


For the three months ended December 31, 2012, the Company
earned revenues of $17.8 million, compared to $17.5 million for the same period
in 2011, an increase of 2%, due to an increase in silver equivalent ounces sold
and higher average realized metal prices, offset by increased treatment and
refining charges. Revenue of $17.8 million for the fourth quarter of 2012
increased by $2.5 million, or 16%, compared to the third quarter of 2012. The
increase over the third quarter is primarily the result of higher silver
equivalent ounces sold, offset by lower average realized metal prices.

During the fourth quarter of 2012, the Company recognized
revenue on shipments representing 681,000 silver equivalent ounces, compared to
628,000 silver equivalent ounces for the same period in 2011, an increase of 8%.
Average realized silver prices increased, with prices of US$31.94 for the
quarter ended December 31, 2012 compared to US$30.86 for the quarter ended
December 31, 2011. During the third quarter of 2012, the Company recognized
revenue on shipments representing 470,000 silver equivalent ounces at an average
realized silver price of US$31.92.

Revenue related to contained metals in concentrate for the
three months ended December 31, 2012 and 2011 is comprised as follows:

Q4 2012
    
    
    Q4 2011(in thousands)
    
    Guanajuato
    
    
    Topia
    
    
    Total
    
    
    Guanajuato
    
    
    Topia
    
    
    TotalSilver revenue
    $
    9,117
    
    $
    3,845
    
    $
    12,962
    
    $
    9,715
    
    $
    3,779
    
    $
    13,494Gold revenue
    
    5,187
    
    
    126
    
    
    5,313
    
    
    4,566
    
    
    146
    
    
    4,712Lead revenue
    
    -
    
    
    523
    
    
    523
    
    
    -
    
    
    410
    
    
    410Zinc revenue
    
    -
    
    
    545
    
    
    545
    
    
    -
    
    
    424
    
    
    424Ore processing revenue and other
    
    -
    
    
    290
    
    
    290
    
    
    -
    
    
    291
    
    
    291Treatment charges, refining charges and deductions
    
    (890)
    
    
    (954)
    
    
    (1,844)
    
    
    (1,208)
    
    
    (603)
    
    
    (1,811)Total Revenue
    $
    13,414
    
    $
    4,375
    
    $
    17,789
    
    $
    13,073
    
    $
    4,447
    
    $
    17,520


Cost of sales excluding amortization and depletion and
share-based payments was $11.1 million for the three months ended December 31,
2012, compared to $8.9 million for the same period in 2011, an increase of 25%.
The increase in cost of sales is due in part to an 8% increase in metal sales
volume to 681,000 silver equivalent ounces. Higher site costs and unit cost of
sales, particularly at Topia, also contributed to the increase in cost of sales
excluding amortization and depletion and share-based payments. Cost of sales
excluding amortization and depletion and share-based payments of $11.1 million for the
fourth quarter of 2012 compares to $7.6 million for third quarter of 2012, an
increase of 46%. The increase was primarily due to an increase in metal sales
volume to 681,000 silver equivalent ounces from 470,000 silver equivalent ounces
in the third quarter of 2012.

______________________

|1 | Adjusted EBITDA is a non-IFRS measure. Please refer to
      the Non-IFRS Measures section for the reconciliation of reported
  financial results to Non-IFRS measures.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 27

---

Cost of sales before non-cash items as a percentage of revenues
was 63% for Q4 2012, compared to 51% for Q4 2011. The increase is due to higher
unit production costs.

Amortization and depletion of mineral properties, plant and
equipment relating to cost of sales for the three months ended December 31, 2012
was $3.3 million, compared to $1.7 million for the same period in 2011. The
increase in amortization expense is primarily due to higher sales volume and
increased investments in mine development, exploration of operating mines, and
plant and equipment during 2012. Amortization and depletion of mineral
properties, plant and equipment relating to cost of sales for the fourth quarter
of 2012 of $3.3 million, compared to $1.7 million in the third quarter of
2012.

Share-based payments relating to cost of sales for the three
months ended December 31, 2012 were $0.1 million, compared to $1.0 million for
the three months ended December 31, 2011. The higher expense in the fourth
quarter of 2011 is the result of share options which were only granted in the
fourth quarter of that year. In 2012, the Company adopted a policy of quarterly
grants and vesting.

For the three months ended December 31, 2012, the Company had
gross profit of $3.3 million or 19% compared to $6.0 million or 34% in the same
period in 2011. Despite an increase in unit sales, the Company saw a decrease in
gross profit and gross profit percentage as a result of lower average realized
metal prices, higher unit production costs, higher smelting and refining charges
and increased unit amortization and depletion costs. From the third quarter of
2012 to the fourth quarter of 2012, gross profit decreased by $2.5 million, or
43%.

General and administrative expenses, before amortization and
share-based payments, were $1.8 million for the three months ended December 31,
2012, compared to $2.0 million for the same period in 2011. Share-based payments
expense related to general and administrative expenses was $0.03 million for the
three months ended December 31, 2012, compared to $1.2 million for the fourth
quarter of 2011. As noted above, during 2011 the Company only granted share
options in the fourth quarter, whereas in 2012 the Company granted options
throughout the year. In 2012, the Company also introduced longer vesting
schedules for options which resulted in lower share-based payments expense in
the current period.

Exploration and evaluation expenses were $0.7 million for the
three months ended December 31, 2012 compared to $0.3 million for the same
period in 2011. The increase over the prior year is primarily due to exploration
costs associated with the El Horcon and Santa Rosa Projects, and increased
business development activities outside of the Companys existing
properties.

Finance and other income was $0.3 million for the three months
ended December 31, 2012 compared to finance and other expense of $2.1 million
for the same period in 2011. The increase is primarily attributable to a foreign
exchange gain of $0.6 million recognized in the three months ended December 31,
2012, as compared to a foreign exchange loss of $2.1 million recognized in the
three months ended December 31, 2011. Foreign exchange gains and losses arise
from the translation of foreign denominated transactions and balances relative
to the functional currency of the Companys subsidiaries and the Companys
reporting currency. The Company has significant Canadian and US dollar loans
receivable from one of its Mexican subsidiaries and fluctuations in the Mexican
peso create significant unrealized foreign exchange gains and losses on the
loans owing to the Canadian parent. These unrealized gains and losses are
recognized in the consolidated net income of the Company.

The Company recorded an income tax expense of $2.3 million for
the three months ended December 31, 2012, consisting of $2.0 million in deferred
tax expense and $0.3 million in current tax expense. This compares to $1.9
million in primarily deferred tax expense recognized in the same period in 2011.
The Company incurs deferred income tax expense as a result of capital
expenditures which, for tax purposes, are deductible at a faster rate than for
accounting purposes. During 2012 the Company saw an increase in such
expenditures.

Net loss for the three months ended December 31, 2012 was $1.3
million, compared to net loss of $1.4 million for the same period in 2011. The
decrease in net loss is primarily attributable to a decrease in share-based
payment expense and favourable foreign exchange movements in the fourth quarter
of 2012 as compared to the same period in 2011. These were offset by an increase in tax expense
in the fourth quarter of 2012 as compared to the same quarter in 2011.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 28

---

Adjusted EBITDA1was $3.8 million for the three
months ended December 31, 2012 compared to adjusted EBITDA of $6.3 million for
the comparable period in 2011. The decrease is primarily attributable to a
decrease in gross profit and an increase in exploration and evaluation
expenses.

NON-IFRS MEASURES

Throughout this MD&A references are made to cash cost per
silver ounce, EBITDA, and adjusted EBITDA, each as defined in this section.
These are not recognized measures under IFRS, but are provided by the Company as
supplemental measures of performance and to provide a basis for comparison to
similar measures commonly reported in the industry. As there are no standardized
methods of calculating these measures, the Companys methods may differ from
those used by others and, accordingly, the Companys use of these measures may
not be directly comparable to similarly titled measures used by others.

Cash Cost per Silver Ounce

The non-IFRS measure of cash cost per silver ounce is used by
the Company to manage and evaluate operating performance at each of the
Companys mines and is widely reported in the silver mining industry as a
benchmark for performance, but does not have a standardized meaning.

Management of the Company believes that the Companys
ability to control the cash cost per silver ounce is one of its key performance
drivers impacting both the Companys financial condition and results of
operations. Having a low silver production cost base allows the Company to
remain profitable even during times of declining commodity prices and provides
more flexibility in responding to changing market conditions. In addition, a
profitable operation results in the generation of positive cash flows, which
then improves the Companys financial condition.

To facilitate a better understanding of this measure as
calculated by the Company, a detailed reconciliation between the cash cost per
silver ounce and the Companys cost of sales as reported in the Companys
Condensed Interim Consolidated Statements of Comprehensive Income is
provided.

Reconciliation of Cash Cost per Silver Ounce

(in 000s, except ounces and
    
    Guanajuato
    
    
    Topia
    
    
    Consolidatedamounts per ounce)
    
    2012 Q4
    
    
    2011 Q4
    
    
    2012 Q4
    
    
    2011 Q4
    
    
    2012 Q4
    
    
    2011 Q4CAD Cost of sales
    $
    7,639
    
    $
    6,128
    
    $
    3,477
    
    $
    2,741
    
    $
    11,116
    
    $
    8,869Smelting and refining
    
    891
    
    
    1,287
    
    
    953
    
    
    262
    
    
    1,844
    
    
    1,549CAD Gross by-product
      revenue2
    
    (5,187
    )
    
    (4,514
    )
    
    (1,194
    )
    
    (684
    )
    
    (6,381
    )
    
    (5,198
    )Cost of custom milling
    
    -
    
    
    -
    
    
    (130
    )
    
    (118
    )
    
    (130
    )
    
    (118
    )CAD Cash operating costs
    $
    3,343
    
    $
    2,901
    
    $
    3,106
    
    $
    2,201
    
    $
    6,449
    
    $
    5,102USD Cash operating costs
    $
    3,370
    
    $
    2,901
    
    $
    3,135
    
    $
    2,167
    
    $
    6,553
    
    $
    5,068Silver payable ounces
    
    316,275
    
    
    306,070
    
    
    129,802
    
    
    119,155
    
    
    446,077
    
    
    425,225Cash cost per silver ounce (USD)
    $
    10.66
    
    $
    9.48
    
    $
    24.15
    
    $
    18.19
    
    $
    14.58
    
    $
    11.92


______________________

|1 | Adjusted EBITDA is a non-IFRS measure. Please refer to
      the Non-IFRS Measures section for the reconciliation of reported
  financial results to Non-IFRS measures.                                        
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | Gross by-product revenue is defined as revenue from the
      by-products of silver, specifically gold at Guanajuato and gold, lead and
      zinc at Topia, net of the respective smelting and refining
  charges.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 29

---

(in 000s, except ounces and
    
    Guanajuato
    
    
    Topia
    
    
    Consolidatedamounts per ounce)
    
    Year Ended,
    
    
    Year Ended,
    
    
    Year Ended,
    
    
    Year Ended,
    
    
    Year Ended,
    
    
    Year Ended,Dec
      31, 2012
    
    
    Dec
      31, 2011
    
    
    Dec
      31, 2012
    
    
    Dec
      31, 2011
    
    
    Dec
      31, 2012
    
    
    Dec
      31, 2011CAD Cost of sales
    $
    20,921
    
    $
    15,763
    
    $
    11,943
    
    $
    9,712
    
    $
    32,864
    
    $
    25,475Smelting and refining
    
    3,012
    
    
    2,381
    
    
    3,536
    
    
    1,755
    
    
    6,548
    
    
    4,136CAD Gross by-product
      revenue1
    
    (16,699
    )
    
    (11,063
    )
    
    (4,407
    )
    
    (3,885
    )
    
    (21,107
    )
    
    (14,948
    )Cost of custom milling
    
    -
    
    
    -
    
    
    (302
    )
    
    (378
    )
    
    (301
    )
    
    (378
    )CAD Cash operating costs
    $
    7,234
    
    $
    7,081
    
    $
    10,770
    
    $
    7,204
    
    $
    18,004
    
    $
    14,285USD Cash operating costs
    $
    7,234
    
    $
    7,162
    
    $
    10,787
    
    $
    7,286
    
    $
    18,020
    
    $
    14,448Silver payable ounces
    
    968,710
    
    
    878,693
    
    
    503,559
    
    
    453,569
    
    
    1,472,270
    
    
    1,332,262Cash cost per silver ounce (USD)
    $
    7.47
    
    $
    8.15
    
    $
    21.42
    
    $
    16.06
    
    $
    12.24
    
    $
    10.84


EBITDA and Adjusted EBITDA

EBITDA is a non-IFRS measure that provides an indication of the
Companys continuing capacity to generate income from operations before taking
into account managements financing decisions and costs of amortizing capital
assets. Accordingly, EBITDA comprises revenue less operating expenses before
interest expense, interest income, capital asset amortization and impairment
charges, and income taxes.

Adjusted EBITDA is a non-IFRS measure in which standard EBITDA
(earnings before interest expense, interest income, taxes, and depreciation and
amortization) is adjusted for share-based payments expense, foreign exchange
gains or losses, and non-recurring items. Foreign exchange gains or losses may
consist of both realized and unrealized losses. Under IFRS, entities must
reflect in compensation expense the cost of share-based payments. In the
Companys circumstances, share-based payments involve a significant accrual of
amounts that will not be settled in cash but are settled by the issuance of
shares in exchange. The Company discloses adjusted EBITDA to aid in
understanding the results of the Company and is meant to provide further
information about the Companys financial results to investors.

The following table provides a reconciliation of EBITDA and
adjusted EBITDA to the 2012 and 2011 financial statements:

|                                                                            |   |               |   |   |               |   |   | Year
      Ended |   |   | Year
      Ended |  
|--------------------------------------------------------------------------- | - | ------------- | - | - | ------------- | - | - | ---------------- | - | - | ---------------- | -
|(in 000s)                                                                   |   | Q4
      2012 |   |   | Q4
      2011 |   |   | Dec 31, 2012     |   |   | Dec 31, 2011     |  
|Income (loss)
      for the period                                          | $ | (1,285        | ) | $ | (1,419        | ) | $ | 5,510            |   | $ | 11,506           |  
|Provision for income taxes                                                  |   | 2,257         |   |   | 1,872         |   |   | 4,200            |   |   | 1,985            |  
|Interest
      income                                                       |   | (78           | ) |   | (146          | ) |   | (442             | ) |   | (435             | )
|Interest expense                                                            |   | 7             |   |   | 16            |   |   | 34               |   |   | 324              |  
|Amortization and depletion of mineral properties, plant and
      equipment |   | 3,326         |   |   | 1,658         |   |   | 8,890            |   |   | 4,561            |  
|EBITDA                                                                      |   | 4,227         |   |   | 1,981         |   |   | 18,192           |   |   | 17,941           |  
|Foreign
      exchange                                                      |   | (559          | ) |   | 2,074         |   |   | (2,828           | ) |   | 4,572            |  
|Share-based payments                                                        |   | 132           |   |   | 2,210         |   |   | 1,529            |   |   | 2,210            |  
|Adjusted EBITDA                                                             | $ | 3,800         |   | $ | 6,265         |   | $ | 16,893           |   | $ | 24,723           |  

_______________________

|1 | Gross by-product revenue is defined as revenue from the
      by-products of silver, specifically gold at Guanajuato and gold, lead and
      zinc at Topia, net of the respective smelting and refining
  charges.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|GREAT PANTHER SILVER
        LIMITED |   
|------------------------------------ | --
|YEAR ENDED DECEMBER 31, 2012         | 30

---

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2012, the Company had net working capital of
$44.5 million and cash and cash equivalents, including short term investments,
of $25.9 million compared to net working capital of $53.8 million and cash and
cash equivalents, including short term investments, of $39.5 million at December
31, 2011. The decrease in cash and cash equivalents, including short term
investments, during the year ended December 31, 2012 is attributed to investing
activities which exceeded cash provided from operations by $14.4 million.

Operating Activities

Net cash flows provided by operating activities for the year
ended December 31, 2012 were $13.1 million, as compared to cash flows provided
by operating activities of $19.1 million in the prior year. The decrease is
attributable primarily to a decrease in gross profit for the year before the
impact of amortization and depletion as a result of rising unit operating costs,
decreased average realized silver prices, and increased treatment and refining
charges.

Investing Activities

For the year ended December 31, 2012, the Company had net cash
outflows related to investing activities of $27.5 million, compared to outflows
related to investing activities of $28.8 million for the year ended December 31,
2011. Investing activities for 2011 included $5.2 million of short term
investments in guaranteed investment certificates. Excluding such activities,
cash-flows from investing activities were $27.5 million for 2012 compared to
$23.5 million for 2011. Excluding short-term investments, the increase in
investment activities were primarily related to the development of mineral
properties, capitalized exploration and evaluation expenditures, and the
purchase of plant and equipment relating to the Companys two operating mines.
Investing activities for the year ended December 31, 2012 also include $1.6
million paid for the purchase of the El Horcon Project.

Financing Activities

Cash flows provided by financing activities were $0.4 million
for the year ended December 31, 2012, compared to $30.1 million in the year
ended December 31, 2011. During the year ended December 31, 2012, the Company
received proceeds from the exercise of options of $0.5 million and repaid
capital lease obligations in the amount of $0.1 million. During the year ended
December 31, 2011, the Company issued shares for total proceeds, net of share
issuance costs, of $22.5 million, received proceeds from the exercise of options
and warrants of $8.5 million, and repaid capital lease obligations, promissory
notes and convertible loan notes in the aggregate amount of $0.9 million.

Trends in Liquidity and Capital Resources

Cash necessary to fund the Companys short-term operating needs
are invested in highly liquid short-term investments with maturities of three
months or less. The funds are not exposed to liquidity risk and there are no
restrictions on the ability of the Company to use these funds to meet its
obligations.

Although the Company made significant investments in its
existing mines and purchased the El Horcon Project which drew on cash reserves
in 2012, the Company anticipates that cash flow generated from mining activities
along with working capital will be sufficient to fund the Companys operations
without requiring any additional capital to meet its planned growth and to fund
development activities during the next twelve months. The Company had $25.9
million in cash and short-term investments at December 31, 2012 and expects to
generate cash-flow from operations of between $15 million and $18 million in
2013 based on budgeted silver prices of $28 and production of 2.4 to 2.5 million
Ag eq oz. Based on achieving overall operating cash-flow targets, the Company
expects to invest approximately $15 to $20 million in capital expenditures in
2013, including mine development and capitalized exploration and evaluation
expenditures. These investments will include development of the San Ignacio
Project with the view to commencing production from this area in 2014, continued
mine development and diamond drilling at both Guanajuato and Topia,
rehabilitation of the Rayas Shaft at Guanajuato, and the acquisition of new
mining and plant equipment.

The Companys 2013 operating cash-flow forecast provided above
is very sensitive to the price of silver and the Company may adjust its capital
spending plans in response to fluctuations in cash-flow. An increase in average
silver prices from the budgeted $28.00 could result in more
aggressive expenditures in the latter half of 2013 and, conversely, weaker
average silver prices could result in a reduction of capital expenditures.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 31

---

Should the Company adopt additional expansion plans or
undertake an acquisition, the Company would need to consider the funds required
relative to the funds available in treasury at such time, including expected
cash flows from operations, to determine whether additional sources would be
required for those pending additional expansion plans.

Contractual Obligations

As of December 31, 2012 the Company had the following
commitments:

(in 000s)
    
    
    Total
    
    
    1 year
    
    
    2-3 years
    
    
    4-5 yearsDrilling services
    
    $
    293
    
    $
    293
    
    $
    -
    
    $
    -Operating lease payments
    
    
    1,333
    
    
    528
    
    
    805
    
    
    -Equipment purchases with third party
      vendors
    
    
    216
    
    
    216
    
    
    -
    
    
    -Environmental program
    
    
    32
    
    
    32
    
    
    -
    
    
    -Total commitments
    
    $
    1,874
    
    $
    1,069
    
    $
    805
    
    $
    -


OFF-BALANCE SHEET ARRANGEMENTS

At the date of this MD&A, the Company had no material
off-balance sheet arrangements that have, or are reasonably likely to have, a
current or future effect on the financial performance or financial condition of
the Company.

FINANCIAL INSTRUMENTS

|(in thousands)              | Fair
    value as at |                      |                                                    
|--------------------------- | -------------------- | -------------------- | ---------------------------------------------------
|                            | Dec 31, 2012         | Basis of Measurement | Associated Risks                                   
|Cash and cash equivalents   | $                    | 20,735               | Carrying value                                     
|                            |                      |                      |                                                    
|Short term investments      | $                    | 5,085                | Carrying value                                     
|                            |                      |                      |                                                    
|Marketable securities(1)    | $                    | 79                   | Fair value through other
      comprehensive income
|                            |                      |                      |                                                    
|Trade and other receivables | $                    | 18,099               | Carrying value                                     
|                            |                      |                      |                                                    
|Trade and other payables    | $                    | 8,111                | Carrying value                                     

(1) Classified as short-term investments in the Companys
Statement of Financial Position

The carrying values of cash and cash equivalents, short term
investments, trade and other receivables, and trade and other payables
approximate their fair values due to the short-term nature of the items. The
fair values of marketable securities are based on current bid prices at December
31, 2012.

On September 25, 2012, the Company entered into contracts with
INTL FCStone (Europe) Limited to hedge a total of 250 tonnes of lead production
from the Topia Mine between October 31, 2012 and February 28, 2013. The
derivative instruments entered into were in the form of zero-cost put/call
collars with a floor price of US $1,975 per tonne of lead and a ceiling price of
US $2,550 per tonne of lead. As at December 31, 2012, 100 tonnes of lead
remained outstanding under the lead collar contracts. These derivatives are not
designated as hedges by the Company, and are marked to their market values at
the end of each reporting date. Adjustments to the market value are included in
the statement of comprehensive income within other income. For the year ended
December 31, 2012, the Companys unrealized losses with respect to the lead
collar contracts were insignificant.

During the reporting period, the Company did not incur any
material gains or losses in respect of its financial instruments.

The Company is exposed in varying degrees to a number of risks
arising from financial instruments. Managements close involvement in the
operations allows for the identification of risks and variances from
expectations. The Companys main objectives for managing risks are to ensure
liquidity, the fulfillment of obligations, the continuation of the Companys mining
operations and exploration programs, and to limit exposure to credit and market
risks.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 32

---

The risks associated with the financial instruments used by the
Company and the way in which such exposures are managed are as follows:

| | (a) | Concentration risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | Concentration risk exists in cash and cash equivalents
      and short-term investments because significant balances are maintained
      with four financial institutions. To mitigate the risk, the Company
      diversifies its cash and cash equivalents and short-term investments by
      holding guaranteed investment certificates and similar securities with a
      number of different financial institutions. The primary investment
      products include, but are not limited to, high interest savings accounts
      and guaranteed investment certificates.                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | Concentration risk also exists in trade accounts
      receivable because the Companys revenues are currently substantially
      derived from sales to four customers. To mitigate the risk, the Company
      continues to seek other viable customers for the sale of its metal
      concentrates.                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (b) | Credit risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | Credit risk primarily arises from the Companys cash and
      cash equivalents, short-term investments, and trade and other receivables.
      The risk exposure is limited to their carrying amounts at the balance
      sheet date. The risk is mitigated by holding cash and cash equivalents
      with highly rated Canadian and Mexican financial institutions. The Company
      does not invest in asset-backed deposits or investments and does not
      expect any credit losses. The Company periodically assesses the quality of
      its investments and is satisfied with the credit rating of the financial
      institutions and the investment grade of its guaranteed investment
      certificates.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (c) | Market risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | The significant market risks to which the Company is
      exposed are currency, interest rate, commodity price and exchange
    risk.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| | (i)   | Currency risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | The operating results and financial position of the
      Company are reported in Canadian dollars. As the Company operates in an
      international environment, some of the Companys financial instruments and
      transactions are denominated in currencies other than the Canadian dollar,
      namely the US dollar and Mexican peso. The results of the Companys
      operations are subject to currency transaction and translation
    risks.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (ii)  | Interest rate risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | The Companys approach is to invest cash in high interest
      savings accounts and guaranteed investment certificates at fixed or
      floating rates of interest in order to maintain liquidity, while achieving
      a satisfactory return for shareholders. The Company manages risk by
      monitoring changes in interest rates and by maintaining a relatively short
      duration for its portfolio of cash equivalent securities. Many of these
      instruments can be immediately redeemed and those of a fixed term do not
      exceed one year.                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (iii) | Commodity price risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | The value of the Companys mineral and exploration and
      evaluation properties depends on the price of silver, gold, lead and zinc
      and the outlook for these minerals.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       | Silver and gold, as well as lead and zinc prices have
      historically fluctuated widely and are affected by numerous factors
      outside of the Companys control, including, but not limited to, market
      fluctuations, government regulations relating to prices, taxes, royalties,
      allowable production, imports, exports, supply, industrial and retail
      demand, forward sales by producers and speculators, levels of worldwide
      production and short-term changes in supply and demand because of
      speculative hedging activities. The value of trade receivables depends on
      changes in metal prices over the quotation period.
The Company has not hedged silver and gold prices. The
      Company has entered into option contracts to mitigate the price risk
      associated with the sales of its lead and zinc by-products for periods not
  exceeding one year.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 33

---

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

OUTLOOK

The Companys primary focus for the 2013 fiscal year is to
improve and strengthen the operational efficiency of the existing operations and
build the platform for more significant growth in 2014 and beyond. The Companys
goals are to:

| | 1. | Increase cash flow from mine operations by cutting costs
      and improving operating efficiency;                                                                    
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | Aggressively drive the development of the San Ignacio
      Project with the view to commencing production in 2014 to augment existing
      production at Guanajuato;
| | 3. | Commence the exploration drilling at the El Horcon
      Project; and                                                                                                 
| | 4. | Develop acquisition
opportunities.                                                                                                                                    

The Company expects metal production for 2013 to be in the
range of 2.4 to 2.5 million Ag eq oz, and cash costs to be in the range of
US$10.00 to US$11.00 per silver ounce.

2013 Production and Cash Cost per Silver Ounce Guidance
    2012 Actual
    2013 Guidance RangeSilver Equivalent Ounces
    2,378,603
    2,400,000  2,500,000Cash costs per silver ounce (USD)
    $ 12.24
    $ 10.00  11.00


On August 21, 2012, the Company purchased surface rights
totalling 19.4 hectares on its wholly-owned San Ignacio Project in Guanajuato,
Mexico allowing sufficient space for the development of a ramp, waste dumps, and
for auxiliary infrastructure. With the acquisition of the surface rights, the
Company has applied for the 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.

Great Panther continues to seek out opportunities to add
production in the districts within which it is already operating. The Company
expects to commence a drill program before the end of the second quarter of 2013
with the goal of delineating a resource at the recently acquired El Horcon
Project located 60 kilometres northwest of the Guanajuato Mine Complex.

In addition, the Company is continually evaluating acquisition
opportunities outside of its existing operations, with the goal of adding
near-term production.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 34

---

TRANSACTIONS WITH RELATED PARTIES

The Company has entered into the following transactions with
related parties:

|                                                                                                          |   |               |  |   |               |  |   | Year
      Ended |  |   | Year
      Ended | 
|--------------------------------------------------------------------------------------------------------- | - | ------------- |  | - | ------------- |  | - | ---------------- |  | - | ---------------- | 
|(in 000s)                                                                                                |   | Q4
      2012 |  |   | Q4
      2011 |  |   | Dec 31, 2012     |  |   | Dec 31, 2011     | 
|Consulting fees paid or accrued to companies
      controlled by directors of the Company                 | $ | 99            |  | $ | 343           |  | $ | 1,045            |  | $ | 781              | 
|                                                                                                          |   |               |  |   |               |  |   |                  |  |   |                  | 
|Consulting fees paid or accrued to companies
      controlled by officers of the Company                  |   | -             |  |   | 137           |  |   | -                |  |   | 290              | 
|                                                                                                          |   |               |  |   |               |  |   |                  |  |   |                  | 
|Director fees paid or accrued                                                                             |   | 70            |  |   | 189           |  |   | 233              |  |   | 189              | 
|                                                                                                          |   |               |  |   |               |  |   |                  |  |   |                  | 
|Consulting fees paid or accrued to a company
      with a common director of the Company                  |   | -             |  |   | -             |  |   | 34               |  |   | -                | 
|                                                                                                          |   |               |  |   |               |  |   |                  |  |   |                  | 
|Office and administration fees paid or
      accrued to a company controlled by a director of the Company |   | -             |  |   | 21            |  |   | 21               |  |   | 85               | 
|                                                                                                          |   |               |  |   |               |  |   |                  |  |   |                  | 
|                                                                                                          | $ | 169           |  | $ | 690           |  | $ | 1,333            |  | $ | 1,345            | 

As at December 31, 2012, $30,000 (December 31, 2011 - $42,000)
was due to companies controlled by officers and directors of the Company and was
included in accounts payable. Amounts due from companies with common directors
were $17,000 (December 31, 2011 - $24,000) and were included in trade and other
receivables.

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

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of the consolidated financial statements in
conformity with International Financial Reporting Standards (IFRS) requires
management to make judgments, estimates and assumptions which affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. The
Company is not required to make any significant judgments in the application of
its accounting policies.

Estimates are based on historical experience and other factors
considered to be reasonable, and are reviewed on an ongoing basis. Revision to
estimates and the resulting effects on the carrying amounts of the Companys
assets and liabilities are accounted for prospectively. A summary of the
Companys significant accounting policies is set out in Note 3 of the
consolidated financial statements for the year ended December 31, 2012.

The Company has identified the following areas where estimates
and assumptions are made and where actual results may differ from the estimates
under different assumptions and conditions and may materially affect financial
results of the Companys statement of financial position reported in future
periods.

Useful lives of mineral properties, plant and
equipment

The Company estimates the remaining lives of its producing
mineral properties using a combination of quantitative and qualitative factors
including historical results, mineral resources reported under National
Instrument 43-101 (NI 43-101), estimates of ore production from areas not
included in the NI 43-101 reports, and managements intent to operate the
property. The estimated remaining lives of the producing mineral properties are
used to calculate amortization and depletion expense, assess impairment charges
and the carrying values of assets, and for forecasting the timing of the payment
of reclamation and remediation costs.

There are numerous uncertainties inherent in the estimation of
the remaining lives of the producing mineral properties, and assumptions that
are valid at the time of estimation may change significantly when new
information becomes available. Changes in the forecast prices of commodities,
exchange rates, or production costs may change the economic status of the
resources, estimates of production from areas not included in the NI 43-101
reports, and managements intent to operate the property and may ultimately have
a material impact on the estimated remaining lives of the properties.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 35

---

Reclamation and remediation provisions

The amounts recorded for reclamation and remediation provisions
are based on estimates prepared by third party environmental specialists, if
available, or by persons within the Company who have the relevant skills and
experience. These estimates are based on remediation activities required by
environmental laws in Mexico, the expected timing of cash flows, and the pre-tax
risk free interest rates on which the estimated cash flows have been discounted.
These estimates also include an assumption of the rate at which costs may
inflate in future periods. Actual results could differ from these estimates. The
estimates require extensive judgment about the nature, cost and timing of the
work to be completed, and may change with future changes to costs, environmental
laws and regulations and remediation practices.

Review of asset carrying values and assessment of
impairment

The Company reviews each asset or cash generating unit at each
reporting date to determine whether there are any indicators of impairment. If
any such indication exists, a formal estimate of recoverable amount is performed
and an impairment loss is recognized to the extent that the carrying amount
exceeds the recoverable amount. The recoverable amount of an asset or cash
generating unit is measured at the higher of fair value less costs to sell and
value in use.

The determination of fair value and value in use requires
management to make estimates and assumptions about expected production and sales
volumes, metal prices, ore tonnage and grades, operating costs, reclamation and
remediation costs, future capital expenditures and appropriate discount rates
for future cash flows. The estimates and assumptions are subject to risk and
uncertainty, and as such there is the possibility that changes in circumstances
will alter these projections, which may impact the recoverable amount of the
assets. In such circumstances, some or all of the carrying value of the assets
may be further impaired or the impairment charge reduced with the impact
recorded in the statement of comprehensive income.

Allocation of costs between mine development and
production

The Company performs capital mine development and production activities within the same areas of the Guanajuato mine.  Therefore, the Company is required to allocate costs between mine development and production.  The Company allocates costs between mine development and production using the percentage of cubic metres of material moved. The allocation requires estimates about the nature of the work performed and the volume of material moved.  Actual costs could vary from the estimated costs.

Revenue from concentrate sales

Revenue from the sale of metals in concentrate is recorded at
the time when it is probable that the economic benefits associated with the
transaction will flow to the Company, the risks and rewards of ownership are
transferred to the customer and the revenue can be reliably measured. Variations
between the sales price recorded at the initial recognition date and the actual
final sales price at the settlement date caused by changes in market metals
prices result in an embedded derivative in the related trade accounts
receivable. The embedded derivative is recorded at fair value each period until
final settlement occurs, with changes in fair value classified as a component of
revenue. During periods of high price volatility, the effect of mark-to-market
price adjustments related to the concentrate shipments which remain to be
settled could be significant. In addition, actual settlement prices could vary
significantly from the estimated prices at each reporting date.

Income taxes and recoverability of deferred tax
assets

In assessing the probability of realizing income tax assets,
the Company makes estimates related to expected future taxable income, potential
tax planning opportunities, estimated timing of reversals of temporary
differences, and the likelihood that tax positions taken will be sustained upon
examination by applicable tax authorities. Where applicable tax laws and
regulations are unclear or subject to ongoing varying interpretations, it is
reasonably possible that changes in these estimates can occur which may
materially affect the amounts of income tax assets recognized. In addition,
future changes in tax laws could limit the Companys ability to realize the
benefits from deferred tax assets.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 36

---

CHANGES IN ACCOUNTING STANDARDS

The following are accounting standards anticipated to be
effective January 1, 2013 or later:

Presentation of Items of Other Comprehensive Income
(OCI)

IAS 1 Presentation of Financial Statements will be amended to
change the disclosure of items presented in OCI, including a requirement to
separate items presented in OCI into two groups based on whether or not they may
be recycled to profit or loss in the future. This amendment is effective for
annual periods beginning on or after July 1, 2012. The Company is currently
evaluating the impact the final standard is expected to have on its consolidated
financial statements.

Financial Instruments

The IASB intends to replace IAS 39 Financial Instruments:
Recognition and Measurement (IAS 39) in its entirety with IFRS 9 Financial
Instruments (IFRS 9) in three main phases. IFRS 9 will be the new standard for
the financial reporting of financial instruments that is principles-based and
less complex than IAS 39, and is effective for annual periods beginning on or
after January 1, 2015, with earlier adoption permitted. IFRS 9 requires that all
financial assets be classified as subsequently measured at amortized cost or at
fair value based on the Companys business model for managing financial assets
and the contractual cash flow characteristics of the financial assets. Financial
liabilities are classified as subsequently measured at amortized cost except for
financial liabilities classified as at fair value through profit or loss,
financial guarantees and certain other exceptions.

In December 2011, the IASB amended the IFRS 7 (Financial
Instruments: Disclosures) requiring additional disclosures on offsetting of
financial assets and financial liabilities. This amendment is effective for
annual periods beginning on or after January 1, 2013. This standard also
requires additional disclosures about the initial application of IFRS 9. This
amendment is effective for annual periods beginning on or after January 1, 2015
(or otherwise when IFRS 9 is first applied). IAS 32 (Financial Instruments:
Presentation) was amended in December 2011 relating to application guidance on
the offsetting of financial assets and financial liabilities. This standard is
effective for annual periods beginning on or after January 1, 2014.

The Company is currently evaluating the impact these standards
are expected to have on its consolidated financial statements.

Consolidation

IFRS 10 Consolidated Financial Statements establishes
principles for the presentation and preparation of consolidated financial
statements when an entity controls one or more other entities. This standard (i)
requires a parent entity (an entity that controls one or more other entities) to
present consolidated financial statements; (ii) defines the principle of
control, and establishes control as the basis for consolidation; (iii) sets out
how to apply the principle of control to identify whether an investor controls
an investee and therefore must consolidate the investee; and (iv) sets out the
accounting requirements for the preparation of consolidated financial
statements. IFRS 10 supersedes IAS 27 Consolidated and Separate Financial
Statements and SIC-12 Consolidation Special Purpose Entities and is effective
for annual periods beginning on or after January 1, 2013, with early application
permitted. IAS 27 and IAS 28  Investments in Associates were revised and
reissued as IAS 27 Separate Financial Statements and IAS 28  Investments in
Associates and Joint Ventures to align with the new consolidation guidance. The
Company is currently evaluating the impact the final standard is expected to
have on its consolidated financial statements.

Joint Arrangements

IFRS 11 Joint Arrangements establishes the core principle that
a party to a joint arrangement determines the type of joint arrangement in which
it is involved by assessing its rights and obligations and accounts for those
rights and obligations in accordance with that type of joint arrangement. This
standard is effective for annual periods beginning on or after January 1, 2013,
with early application permitted. The Company does not expect this standard to
have significant impact on its consolidated financial statements.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 37

---

Disclosure of Involvement with Other Entities

IFRS 12 Disclosure of Involvement with Other Entities requires
the disclosure of information that enables users of financial statements to
evaluate the nature of, and risks associated with, its interests in other
entities and the effects of those interests on its financial position, financial
performance and cash flows. This standard is effective for annual periods
beginning on or after January 1, 2013, with early application permitted. The
Company is currently evaluating the impact the final standard is expected to
have on its consolidated financial statements.

Fair Value Measurement

IFRS 13 Fair Value Measurement defines fair value, sets out in
a single IFRS framework for measuring fair value and requires disclosures about
fair value measurements. IFRS 13 applies when another IFRS requires or permits
fair value measurements or disclosures about fair value measurements (and
measurements, such as fair value less costs to sell, based on fair value or
disclosures about those measurements), except for: share-based payment
transactions within the scope of IFRS 2 Share-based Payment; leasing
transactions within the scope of IAS 17 Leases; and, measurements that have some
similarities to fair value but that are not fair value, such as net realizable
value in IAS 2 Inventories or value in use in IAS 36 Impairment of Assets. This
standard is effective for annual periods beginning on or after January 1, 2013,
with early application permitted. The Company is currently evaluating the impact
the final standard is expected to have on its consolidated financial
statements.

Stripping Costs in the Production Phase of a Mine

In October of 2011, the IASB issued IFRIC 20  Stripping Costs
in the Production Phase of a Mine, which clarifies the requirements for
accounting for costs of stripping activities in the production phase when two
benefits accrue: (1) usable ore that can be used to produce concentrate
inventory and (2) improved access to further quantities of material that will be
mined in future periods. IFRIC 20 is effective for annual reporting periods
beginning on or after January 1, 2013 with earlier application permitted and
includes guidance on transition for pre-existing stripping costs. The Company
does not expect this standard to have significant impact on its consolidated
financial statements.

SECURITIES OUTSTANDING

At the date of this MD&A, the Company had 137,860,052
common shares issued, 316,250 warrants and 5,332,600 options outstanding.

INTERNAL CONTROLS OVER FINANCIAL REPORTING

The Companys management is responsible for establishing and
maintaining adequate internal control over financial reporting, and have
designed such internal controls over financial reporting to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of the financial statements for external purposes in accordance with
International Financial Reporting Standards. Any system of internal control over
financial reporting, no matter how well designed, has inherent limitations.
Therefore even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and
presentation.

The Companys management, including the Chief Executive
Officer, the President and the Chief Financial Officer, conducted an evaluation
of the effectiveness of the Companys internal control over financial reporting
based on the framework in Internal Control  Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway  Commission. Based on this
evaluation, management has concluded that, as of December 31, 2012, the
Companys internal control over financial reporting was effective.

There have been no changes in the Companys internal control
over financial reporting during the year ended December 31, 2012 that have
materially affected, or are reasonably likely to materially affect the Companys
internal control over financial reporting.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 38

---

DISCLOSURE CONTROLS AND PROCEDURES

The Companys management is responsible for the design and
effectiveness of disclosure controls and procedures which are designed to
provide a reasonable level of assurance that information required to be
disclosed in reports filed or submitted under securities laws is recorded,
processed, summarized and reported accurately and within the time periods
specified.

Management, including the Chief Executive Officer, the
President, and the Chief Financial Officer, has evaluated the effectiveness of
the design and operation of the Companys disclosure controls and procedures as
at December 31, 2012. Based on this evaluation, management has concluded that
the Companys disclosure controls and procedures were effective as at December
31, 2012.

RISKS AND UNCERTAINTIES

Commodity Price Risk

The market price of precious metals and other minerals is
volatile and cannot be controlled. Our profitability and long-term viability
will depend on the market price of silver, gold, lead and zinc. If these prices
should drop significantly, the economic prospects of the projects in which the
Company has an interest 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. Factors beyond the Companys
control may affect the marketability of any minerals discovered.

The marketability of minerals is also affected by numerous
other factors beyond the Companys control, including government regulations
relating to royalties, allowable production and importing and exporting of
minerals, regional or global consumption, expectations for inflation, and
economic and political conditions, including currency fluctuations and interest
rates, the effect of which cannot be accurately predicted.

Mineral prices have fluctuated widely, particularly in recent
years. As noted in the Profile and Strategy section above, metal price changes
can significantly affect the cost per ounce. Management, from time to time, will
explore entering into possible hedging arrangements to limit the Companys
exposure to changes in prices of base metals, specifically lead and zinc.

Currency Risk

As the Company operates in an international environment, some
of the Companys financial instruments and transactions are denominated in
currencies other than the Canadian dollar, and as a result fluctuations in
currency exchange rates may significantly impact the Companys earnings and cash
flows. Revenues from the sale of concentrates are primarily denominated in US
dollars, while operating costs are primarily denominated in Canadian dollars and
Mexican pesos. The appreciation of the Mexican peso against the Canadian dollar
would increase the cost of exploration, development and operations at the
Companys mineral properties in Mexico. The Company does not actively manage its
foreign exchange risk with hedging instruments.

Interest Rate Risk

The Companys exposure to interest rate risk is limited to cash
invested in high interest savings accounts and guaranteed investment
certificates at fixed rates of interest and cash equivalents that are maintained
in floating rates of interest. The Company manages the risk by monitoring
changes in interest rates in comparison to prevailing market rates. The Company
does not carry any material financial liabilities which bear interest.

Credit Risk

The Companys credit risk exposure is limited to the carrying
amounts of cash and cash equivalents and amounts receivable. Cash and cash
equivalents are held as cash deposits or invested in high interest savings
accounts and guaranteed investment certificates with various maturity dates. The
Company does not invest in asset-backed deposits or investments and does not
expect any credit losses. The Company periodically assesses the quality of its investments and is satisfied with the credit
rating of the financial institutions and the investment grade of its guaranteed
investment certificates.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 39

---

The Company also assesses the collectability of its trade
receivables by reviewing the creditworthiness of its customers. The Company
historically has not had difficulty collecting receivables from its customers,
nor have customers defaulted on any payments.

Concentration of Customers

The Company sells refined concentrates containing silver, gold,
lead and zinc to metal traders and smelters. 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 metal 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.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to
meet its financial obligations as they become due. The Company ensures there is
sufficient working capital to meet short term business requirements. One of
managements goals is to maintain an optimal level of liquidity through the
active management of the Companys assets, liabilities and cash flows. The
Company prepares annual budgets which are approved by the Board of Directors and
prepares cash flows and liquidity forecasts on a quarterly basis.

For the year ended December 31, 2012, cash flows provided by
operations were used to fund the operating costs associated with the producing
properties as well as mineral property exploration expenditures, capital
expenditures and head office costs. The Companys cash and cash equivalents are
invested in high interest savings accounts and guaranteed investment
certificates which are available on demand to fund the Companys operating costs
and other financial demands.

Exploration and Development Stage of the Properties

The Company has made a significant investment to expand the NI
43-101 compliant Mineral Resource estimates for both the Guanajuato and Topia
mines. Exploration work on the Companys mines and mineral properties has
expanded as the Company seeks to define additional resources. Even in the event
commercial quantities of minerals are discovered, exploration and development
stage properties, such as San Ignacio, El Horcon and Santa Rosa, might not be
brought into a state of commercial production. The search for valuable minerals
as a business is extremely risky. Finding mineral deposits is dependent on a
number of factors, not the least of which is the technical skill of exploration
personnel involved.

The commercial viability of a mineral deposit, once discovered,
is also dependent on a number of factors, some of which are the particular
attributes of the deposit, such as size, grade and proximity to infrastructure,
as well as metal prices. Most of these factors are beyond the control of the
entity conducting such mineral exploration. There can be no assurance that
operations will be profitable in the future.

The Company is subject to risks associated with exploration and
development stages of the properties including the timing and cost of the
construction of mining and processing facilities, the availability and cost of
skilled labour and mining equipment, the availability and cost of appropriate
smelting and refining arrangements, the need to obtain necessary environmental
and other governmental approvals and permits, and potential increases in
construction and operating costs due to changes in the cost of fuel, materials
and supplies.

Competition and Agreements with Other Parties

The mineral industry is intensely competitive in all phases.
The Company competes with many companies possessing greater financial resources
and technical facilities than ourselves for the acquisition of mineral
concessions, claims, leases and other mineral interests as well as for the
recruitment and retention of qualified employees.

|GREAT
      PANTHER SILVER LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 40

---

The Companys management consists of individuals with vast
experience, knowledge, and contacts to capitalize on future opportunities.

Market Forces Outside the Control of the Company

The marketability of minerals is affected by numerous factors
beyond the control of the entity involved in their mining and processing. These
factors include market fluctuations, government regulations relating to prices,
taxes, royalties, allowable production, imports, exports and supply and demand.
One or more of these risk elements could have an impact on costs of an operation
and if significant enough, reduce the prospects of profitability of operations
and threaten commercial continuation.

To mitigate these risks and uncertainties that affect our
operations and improve on predictability, the Company enters into contracts with
customers and vendors.

Environmental Factors

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. 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 trend towards criminal
liability for officers and directors for violations of environmental laws,
whether inadvertent or not.

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.

Inherent Dangers with Mining

The development and operation of a mine involves risks that
even experience and knowledge may not be able to overcome. These risks include
unusual or unexpected geological formations, metallurgical and other processing
problems, environmental hazards, power outages, labour disruptions, accidents,
weather condition interruptions, explosions, fires and the inability to obtain
suitable or adequate machinery, equipment or labour.

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 the Companys highest priority 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.

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

Certain of the statements and information in this document
constitute forward-looking statements within the meaning of the United States
Private Securities Litigation Reform Actof 1995 and forward-looking
information within Canadian securities laws (collectively forward-looking
statements). All statements, other than statements of historical fact, that
address activities, events or developments that the Company expects or
anticipates will or may occur in the future are forward-looking statements.
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.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 41

---

In particular, this MD&A includes forward-looking
statements, principally under the section titled Outlook, but also elsewhere
in this document relating 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. Examples of specific
information in this MD&A that may constitute forward looking statements are:

- The Companys objective to acquire additional mines or projects in Latin
  America
- Plans and targets for exploration drilling for 2013
- Silver equivalent ounce production guidance for 2013
- Cash cost per silver ounce guidance for 2013
- Expectations for grade variability
- Expectations for permitting and construction for the Companys San Ignacio
  project
- Permitting expectations, plans to commence drilling, and expectations to reinstate certain claims at the Company’s El Horcon project
- Capital expenditure forecasts for 2013
- Expected cash-flows for 2013
- Expectation to start production at San Ignacio in 2014

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, as described
below. These assumptions made by the Company in preparing the forward looking
information contained in this MD&A, 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.

This list is not exhaustive of the factors that may affect any
of the Companys forward-looking statements or information. 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.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 42

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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 MD&A, 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.

Further information can be found in the section entitled
Description of the Business  Risk Factors in the Companys Annual Information
Form (AIF) for the year ended December 31, 2012, which is available on SEDAR
at http://www.sedar.com,and in Risks and
Uncertainties in this MD&A. Readers are advised to carefully review and
consider the risk factors identified in the AIF 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 the AIF.

QUALIFIED PERSON

Robert F. Brown, P. Eng., a Qualified Person as defined by
National Instrument 43-101 and the Company's Vice President of Exploration, has
reviewed and approved the technical disclosure contained in this MD&A.

CAUTIONARY NOTE TO U.S. INVESTORS

This MD&A has 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 Act of 1933, as amended (the Securities
Act). 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.

Accordingly, information contained in this MD&A and the
documents incorporated by reference herein contain descriptions of our 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.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 43

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ADDITIONAL SOURCES OF INFORMATION

Additional information relating to Great Panther Silver Limited
can be found on SEDAR at http://www.sedar.comand EDGAR at http://www.sec.gov/edgar.shtmlor the Companys website at http://www.greatpanther.com.

|GREAT PANTHER SILVER
      LIMITED |   
|---------------------------------- | --
|YEAR ENDED DECEMBER 31, 2012       | 44

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