Exhibit 99.2







Consolidated Financial Statements

(Expressed in Thousands of Canadian Dollars)

For the years ended December 31, 2016,
2015 and 2014

















March 24, 2017



Independent Auditor’s Report



To the Shareholders of Exeter Resource Corporation



We have audited the accompanying consolidated financial statements
of Exeter Resource Corporation, which comprise the consolidated statements of financial position as at December 31, 2016 and December
31, 2015 and the consolidated statements of loss and comprehensive loss, cash flows, and changes in equity for each of the years
in the three-year period ended December 31, 2016, and the related notes, which comprise a summary of significant accounting policies
and other explanatory information.



Management’s responsibility for the consolidated
financial statements

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



Auditor’s responsibility

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



An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An
audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the consolidated financial statements.



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





PricewaterhouseCoopers LLP

PricewaterhouseCoopers Place, 250 Howe Street, Suite 1400,
Vancouver, British Columbia, Canada V6C 3S7

T: +1 604 806 7000, F: +1 604 806 7806



“PwC” refers to PricewaterhouseCoopers LLP, an Ontario
limited liability partnership.







2











Opinion

In our opinion, the consolidated financial statements present
fairly, in all material respects, the financial position of Exeter Resource Corporation as at December 31, 2016 and December 31,
2015 and its financial performance and its cash flows for each of the years in the three-year period ended December 31, 2016 in
accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.



(signed) “PricewaterhouseCoopers LLP”



Chartered Professional Accountants



3







|Exeter Resource Corporation                  
|---------------------------------------------
|Consolidated Statements of Financial Position
|(Expressed in Thousands of Canadian Dollars) 





|                                         |  |           |  | December 31,
    2016 |          |   | December 31,
    2015 |  
|---------------------------------------- |  | --------- |  | --------------------- | -------- | - | --------------------- | -
|                                         |  |           |  |                       |          |   |                       |  
|Assets                                   |  |           |  |                       |          |   |                       |  
|                                         |  |           |  |                       |          |   |                       |  
|Current                                  |  |           |  |                       |          |   |                       |  
|Cash and cash equivalents                |  | (Note 7)  |  | $                     | 17,435   |   |                       | $
|Amounts receivable and prepaid expenses  |  |           |  |                       | 110      |   |                       |  
|Due from related party                   |  | (Note 12) |  |                       | 12       |   |                       |  
|Other financial assets                   |  | (Note 8)  |  |                       | 115      |   |                       |  
|                                         |  |           |  |                       | 17,672   |   |                       |  
|                                         |  |           |  |                       |          |   |                       |  
|Property and equipment                   |  |           |  |                       | 40       |   |                       |  
|                                         |  |           |  | $                     | 17,712   |   |                       | $
|                                         |  |           |  |                       |          |   |                       |  
|Liabilities                              |  |           |  |                       |          |   |                       |  
|                                         |  |           |  |                       |          |   |                       |  
|Current                                  |  |           |  |                       |          |   |                       |  
|Accounts payable and accrued liabilities |  |           |  | $                     | 469      |   |                       | $
|Due to related parties                   |  | (Note 12) |  |                       | 79       |   |                       |  
|                                         |  |           |  |                       | 548      |   |                       |  
|                                         |  |           |  |                       |          |   |                       |  
|Shareholders’ Equity                     |  |           |  |                       |          |   |                       |  
|                                         |  |           |  |                       |          |   |                       |  
|Share capital                            |  | (Note 10) |  |                       | 246,267  |   |                       |  
|Contributed surplus                      |  |           |  |                       | 46,276   |   |                       |  
|Deficit                                  |  |           |  |                       | (275,520 | ) |                       |  
|Accumulated other comprehensive income   |  |           |  |                       | 141      |   |                       |  
|                                         |  |           |  |                       | 17,164   |   |                       |  
|                                         |  |           |  | $                     | 17,712   |   |                       | $
|                                         |  |           |  |                       |          |   |                       |  
|Contractual Obligations                  |  | (Note 14) |  |                       |          |   |                       |  





Approved by the Directors:

|               |  |         
|-------------- |  | --------
|“Rob Reynolds” |  | Director
|               |  |         
|               |  |         
|“John Simmons” |  | Director



See accompanying
notes to the consolidated financial statements



4







|Exeter Resource Corporation                                    
|---------------------------------------------------------------
|Consolidated Statements of Loss and Comprehensive Loss         
|(Expressed in Thousands of Canadian Dollars, Except Share Data)



|For the years ended December
    31,                           |  | 2016             |  |   | 2015       |   |  | 2014 |           
|-------------------------------------------------------------- |  | ---------------- |  | - | ---------- | - |  | ---- | ----------
|                                                               |  |                  |  |   |            |   |  |      |           
|Income                                                         |  |                  |  |   |            |   |  |      |           
|Interest income                                                |  |                  |  | $ | 204        |   |  | $    | 291       
|Gain on sale of assets                                         |  |                  |  |   | 3          |   |  |      | -         
|                                                               |  |                  |  |   |            |   |  |      |           
|Expenses                                                       |  |                  |  |   |            |   |  |      |           
|Accounting and audit                                           |  |                  |  |   | 66         |   |  |      | 87        
|Administration salaries and consulting                         |  | (Note 11)        |  |   | 439        |   |  |      | 760       
|Amortization                                                   |  |                  |  |   | 20         |   |  |      | 35        
|Directors’ fees                                                |  | (Note 11)        |  |   | 385        |   |  |      | 639       
|Foreign exchange loss                                          |  |                  |  |   | 6          |   |  |      | 29        
|General and administration                                     |  |                  |  |   | 522        |   |  |      | 492       
|Legal fees                                                     |  |                  |  |   | 33         |   |  |      | 80        
|Impairment on available-for-sale investments                   |  | (Note 8)         |  |   | -          |   |  |      | 48        
|Management fees                                                |  | (Note 11)        |  |   | 126        |   |  |      | 165       
|Mineral property exploration expenditures                      |  | (Notes 9 and 11) |  |   | 3,935      |   |  |      | 6,340     
|Shareholder communications                                     |  |                  |  |   | 538        |   |  |      | 390       
|Stock exchange listing and filing fees                         |  |                  |  |   | 101        |   |  |      | 123       
|                                                               |  |                  |  |   | 6,171      |   |  |      | 9,188     
|Net loss for the year                                          |  |                  |  |   | (5,964     | ) |  |      | (8,897    
|Other comprehensive income for the year                        |  |                  |  |   |            |   |  |      |           
|Items that may be reclassified to profit or loss:              |  |                  |  |   |            |   |  |      |           
|Currency translation difference                                |  |                  |  |   | 8          |   |  |      | 4         
|Unrealized gain on available-for-sale investments (Note
    8) |  |                  |  |   | 89         |   |  |      | -         
|Comprehensive loss for the year                                |  |                  |  | $ | (5,867     | ) |  | $    | (8,893    
|                                                               |  |                  |  |   |            |   |  |      |           
|Basic and diluted loss per common share                        |  |                  |  | $ | (0.07      | ) |  | $    | (0.10     
|                                                               |  |                  |  |   |            |   |  |      |           
|Weighted average number of common shares outstanding           |  |                  |  |   | 88,533,333 |   |  |      | 88,407,753



See accompanying notes to the consolidated
financial statements



5







|Exeter Resource Corporation                 
|--------------------------------------------
|Consolidated Statements of Cash Flows       
|(Expressed in Thousands of Canadian Dollars)



|For the years ended December 31,                  |  |           |  |   | 2016   |   |  |   | 2015   |   |  |   | 2014    |  
|------------------------------------------------- |  | --------- |  | - | ------ | - |  | - | ------ | - |  | - | ------- | -
|                                                  |  |           |  |   |        |   |  |   |        |   |  |   |         |  
|Operating Activities                              |  |           |  |   |        |   |  |   |        |   |  |   |         |  
|Net loss for the year                             |  |           |  | $ | (5,964 | ) |  | $ | (8,897 | ) |  | $ | (10,565 | )
|Non-cash items:                                   |  |           |  |   |        |   |  |   |        |   |  |   |         |  
|Amortization                                      |  |           |  |   | 20     |   |  |   | 35     |   |  |   | 42      |  
|Impairment on available-for-sale investments      |  | (Note 8)  |  |   | -      |   |  |   | 48     |   |  |   | 39      |  
|Gain on sale of assets                            |  |           |  |   | (3     | ) |  |   | -      |   |  |   | -       |  
|Share-based compensation                          |  | (Note 11) |  |   | 693    |   |  |   | 1,231  |   |  |   | 405     |  
|                                                  |  |           |  |   | (5,254 | ) |  |   | (7,583 | ) |  |   | (10,079 | )
|Changes in non-cash working capital items:        |  |           |  |   |        |   |  |   |        |   |  |   |         |  
|Amounts receivable and prepaid expenses           |  |           |  |   | 22     |   |  |   | 41     |   |  |   | 98      |  
|Due from related parties                          |  |           |  |   | 6      |   |  |   | (9     | ) |  |   | 12      |  
|Due to related parties                            |  |           |  |   | 58     |   |  |   | (44    | ) |  |   | 22      |  
|Accounts payable and accrued liabilities          |  |           |  |   | 156    |   |  |   | (791   | ) |  |   | 284     |  
|Cash outflow from operating activities            |  |           |  |   | (5,012 | ) |  |   | (8,386 | ) |  |   | (9,663  | )
|                                                  |  |           |  |   |        |   |  |   |        |   |  |   |         |  
|Financing Activities                              |  |           |  |   |        |   |  |   |        |   |  |   |         |  
|Issue of share capital                            |  |           |  |   | 126    |   |  |   | -      |   |  |   | -       |  
|Cash flow from financing activities               |  |           |  |   | 126    |   |  |   | -      |   |  |   | -       |  
|                                                  |  |           |  |   |        |   |  |   |        |   |  |   |         |  
|Investing Activities                              |  |           |  |   |        |   |  |   |        |   |  |   |         |  
|Acquisition of property and equipment             |  |           |  |   | -      |   |  |   | (9     | ) |  |   | (2      | )
|Acquisition of marketable securities              |  |           |  |   | -      |   |  |   | (50    | ) |  |   | -       |  
|Proceeds from sale of assets                      |  |           |  |   | 3      |   |  |   | -      |   |  |   | -       |  
|Cash flows from investing activities              |  |           |  |   | 3      |   |  |   | (59    | ) |  |   | (2      | )
|                                                  |  |           |  |   |        |   |  |   |        |   |  |   |         |  
|Effect of foreign exchange rate change on cash    |  |           |  |   | 10     |   |  |   | 1      |   |  |   | (18     | )
|                                                  |  |           |  |   |        |   |  |   |        |   |  |   |         |  
|Net decrease in cash and cash equivalents         |  |           |  |   | (4,873 | ) |  |   | (8,444 | ) |  |   | (9,683  | )
|Cash and cash equivalents – beginning of the year |  |           |  |   | 22,308 |   |  |   | 30,752 |   |  |   | 40,435  |  
|Cash and cash equivalents – end of the year       |  |           |  | $ | 17,435 |   |  | $ | 22,308 |   |  | $ | 30,752  |  



See accompanying notes to the consolidated
financial statements



6







|Exeter Resource Corporation                 
|--------------------------------------------
|Consolidated Statements of Changes in Equity
|(Expressed in Thousands of Canadian Dollars)



|                                                       |  | Issued Share Capital |            |  |        |   |         |                      |  |   |         |   |  |                                                     |         
|------------------------------------------------------ |  | -------------------- | ---------- |  | ------ | - | ------- | -------------------- |  | - | ------- | - |  | --------------------------------------------------- | --------
|                                                       |  | Number of  Shares    |            |  | Amount |   |         | Contributed  Surplus |  |   | Deficit |   |  | Accumulated Other  Comprehensive 
    Income (Loss) |         
|Balance - January 1, 2014                              |  |                      | 88,407,753 |  |        | $ | 246,089 |                      |  | $ | 43,999  |   |  | $                                                   | (250,094
|Additions during the year:                             |  |                      |            |  |        |   |         |                      |  |   |         |   |  |                                                     |         
|- Share-based compensation                             |  |                      | -          |  |        |   | -       |                      |  |   | 405     |   |  |                                                     | -       
|- Other comprehensive income                           |  |                      | -          |  |        |   | -       |                      |  |   | -       |   |  |                                                     | -       
|- Net loss for the year                                |  |                      | -          |  |        |   | -       |                      |  |   | -       |   |  |                                                     | (10,565 
|Balance - December 31, 2014                            |  |                      | 88,407,753 |  |        | $ | 246,089 |                      |  | $ | 44,404  |   |  | $                                                   | (260,659
|                                                       |  |                      |            |  |        |   |         |                      |  |   |         |   |  |                                                     |         
|Balance - January 1, 2015                              |  |                      | 88,407,753 |  |        | $ | 246,089 |                      |  | $ | 44,404  |   |  | $                                                   | (260,659
|Additions during the year:                             |  |                      |            |  |        |   |         |                      |  |   |         |   |  |                                                     |         
|- Share-based compensation                             |  |                      | -          |  |        |   | -       |                      |  |   | 1,231   |   |  |                                                     | -       
|- Other comprehensive income                           |  |                      | -          |  |        |   | -       |                      |  |   | -       |   |  |                                                     | -       
|- Net loss for the year                                |  |                      | -          |  |        |   | -       |                      |  |   | -       |   |  |                                                     | (8,897  
|Balance - December 31, 2015                            |  |                      | 88,407,753 |  |        | $ | 246,089 |                      |  | $ | 45,635  |   |  | $                                                   | (269,556
|                                                       |  |                      |            |  |        |   |         |                      |  |   |         |   |  |                                                     |         
|Balance - January 1, 2016                              |  |                      | 88,407,753 |  |        | $ | 246,089 |                      |  | $ | 45,635  |   |  | $                                                   | (269,556
|Additions during the year:                             |  |                      |            |  |        |   |         |                      |  |   |         |   |  |                                                     |         
|- Exercise of stock options                            |  |                      | 252,500    |  |        |   | 126     |                      |  |   | -       |   |  |                                                     | -       
|- Contributed surplus allocated on exercise of options |  |                      | -          |  |        |   | 52      |                      |  |   | (52     | ) |  |                                                     | -       
|- Share-based compensation                             |  |                      | -          |  |        |   | -       |                      |  |   | 693     |   |  |                                                     | -       
|- Other comprehensive income                           |  |                      | -          |  |        |   | -       |                      |  |   | -       |   |  |                                                     | -       
|- Net loss for the year                                |  |                      | -          |  |        |   | -       |                      |  |   | -       |   |  |                                                     | (5,964  
|Balance - December 31, 2016                            |  |                      | 88,660,253 |  |        | $ | 246,267 |                      |  | $ | 46,276  |   |  | $                                                   | (275,520



See accompanying
notes to the consolidated financial statements

7







|Exeter Resource Corporation                         
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years ended December 31, 2016, 2015 and 2014
|(tabular amounts in $000’s)                         



| | 1. | Nature of Business
| | -- | ------------------



Exeter Resource Corporation
(“Exeter” or the “Company”) is an exploration stage company incorporated under the laws of British Columbia,
Canada with its head office in Vancouver, Canada, and, together with its subsidiaries, it is currently engaged in the acquisition
and exploration of mineral properties located in Chile. The Company is also evaluating new opportunities with the objective of
securing properties which offer near term discovery potential.



The Company is in the process
of exploring its mineral properties. The continued operation of the Company is dependent upon the existence of economically recoverable
reserves, the ability of the Company to obtain necessary financing to complete the development of such properties, and the profitable
production from or disposition of such properties.



The Company has its primary
listing on the Toronto Stock Exchange and a secondary listing on the NYSE MKT. The Company’s head office is located at 1660
- 999 West Hastings Street, Vancouver, BC, Canada, V6C 2W2.



| | 2. | Basis of Preparation
| | -- | --------------------



These consolidated financial
statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by
the International Accounting Standards Board (“IASB”). The consolidated financial statements have been prepared under
the historical cost convention except for marketable securities which are recorded at fair value through profit or loss. The Board
of Directors approved the consolidated financial statements on March 24, 2017.



| | 3. | Changes in Accounting Policy
                                         and Disclosures
| | -- | -------------------------------------------------------------------------------------



New Standards and Interpretations
Not Yet Adopted



The IASB has issued a number
of new standards, amendments to standards and interpretations which are not effective for the year ended December 31, 2016, and
have not been applied in preparing these consolidated financial statements. Those that may have a significant effect on the consolidated
financial statements of the Company are as follows:



IFRS 9–Financial
Instruments - classification and measurement



IFRS 9 Financial Instruments
(“IFRS 9”) was issued by the IASB in November 2009 with additions in October 2010 and July 2014 and will replace IAS
39 Financial Instruments: Recognition and Measurement (“IAS 39”). IFRS 9 uses a single approach to determine whether
a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9
is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow
characteristics of the financial assets. Most of the requirements in IAS 39 for classification and measurement of financial liabilities
were carried forward unchanged to IFRS 9, except that an entity choosing to measure a financial liability at fair value will present
the portion of any change in its fair value due to changes in the entity’s own credit risk in other comprehensive income,
rather than within profit or loss. The new standard also requires a single impairment method to be used, replacing the multiple
impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2018. Earlier adoption is
permitted. The Company is currently assessing the impact of the standard on its consolidated financial statements.



IFRS 16 – Leases



In January 2016, the IASB published
IFRS 16 which replaces IAS 17, Leases. IFRS 16 establishes how an entity will recognise, measure, present and disclose leases.
It is effective for annual periods beginning on or after January 1, 2019. The Company is currently evaluating the impact of the
standard on its consolidated financial statements.



8







|Exeter Resource Corporation                         
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years ended December 31, 2016, 2015 and 2014
|(tabular amounts in $000’s)                         



| | 4. | Summary of Significant Accounting
                                         Policies, Judgements and Estimation Uncertainty
| | -- | --------------------------------------------------------------------------------------------------------------------------



| | a) | Basis of presentation
| | -- | ---------------------



These
consolidated financial statements include the accounts of Exeter and its subsidiaries. Subsidiaries are those entities which Exeter
controls. The Company has control over an entity when it is exposed to, or has rights to variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity.



|                                                    |  | Incorporation |  | Percentage of  Ownership |    
|--------------------------------------------------- |  | ------------- |  | ------------------------ | ---
|Sociedad Contractual Minera Eton Chile (“Eton”)     |  | Chile         |  |                          | 100
|Sociedad Contractual Minera Retexe Chile (“Retexe”) |  | Chile         |  |                          | 100
|Minera Goldeye Chile Limitada (“Goldeye”)           |  | Chile         |  |                          | 100



The Company
does not have restrictions on its ability to transfer cash to or from its subsidiaries, or to pay dividends, advance loans or
make loan repayments between group companies. All intercompany transactions, balances and unrealized gains and losses from intercompany
transactions are eliminated on consolidation.



| | b) | Mineral property costs
| | -- | ----------------------



Mineral properties
consist of exploration and mining concessions and options to acquire interests in exploration and mining concessions. Acquisition
costs are capitalized and deferred until such time as the property is put into production or the property is disposed of, either
through sale or abandonment or becomes impaired. If a property is put into production the costs of acquisition are expensed on
a units of production basis over the life of the property based on estimated proven and probable reserves. Proceeds received from
the sale of any interest in a property will be credited against the carrying value of the property with any excess recognized
in the income statement. If a property is abandoned, the acquisition costs will be written off to the income statement.



| | c) | Mineral property exploration
                                         and evaluation expenditures
| | -- | -------------------------------------------------------------------------------------------------



The Company
expenses mineral property exploration and evaluation expenditures when incurred. When it has established that a mineral deposit
is technically feasible and commercially viable and following a decision to commence development, the costs subsequently incurred
to develop a mine on the property prior to the start of mining operations are capitalized and will be amortized on a units of
production basis following the commencement of commercial production, or written off if the property is sold, allowed to lapse
or abandoned.



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



The Company considers cash and
cash equivalents to include amounts held in banks and highly liquid investments with an initial term to maturity of ninety days
or less.



9







|Exeter Resource Corporation                         
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years ended December 31, 2016, 2015 and 2014
|(tabular amounts in $000’s)                         



| | 4. | Summary of Significant Accounting
                                         Policies, Judgements and Estimation Uncertainty (Continued)
| | -- | --------------------------------------------------------------------------------------------------------------------------------------



| | e) | Translation of foreign
                                         currencies
| | -- | --------------------------------------------------------------------------



(i)   
Presentation currency



The consolidated
financial statements are presented in Canadian dollars.



(ii)   
Functional currency



The financial
statements of each entity are measured using the currency of the primary economic environment in which the entity operates (the
“functional currency”).



The functional
currency of the parent company is the Canadian dollar and the functional currency of the Company’s Chilean subsidiaries,
Eton, Retexe and Goldeye, is the Chilean Peso. The financial statements of these subsidiaries (“foreign operations”)
are translated into the Canadian dollar presentation currency as follows:



| | · | Assets
                                         and liabilities – at the closing rate at the date of the statement of financial
                                         position.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Income
                                         and expenses – at the average rate of the period (as this is considered a reasonable
                                         approximation to actual rates).
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | All
                                         resulting changes are recognized in Other Comprehensive Income (“OCI”) as
                                         cumulative translation adjustments.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



When the settlement of a monetary
item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange
gains and losses arising from conversion of the item from functional to reporting currency are considered to form part of the
net investment in the foreign operation and are recognized in OCI.



When an entity disposes of its
entire interest in a foreign operation, or loses control, joint control, or significant influence over a foreign operation, the
foreign currency gains or losses accumulated in OCI related to the foreign operation are recognized in profit or loss. If an entity
disposes of part of an interest in a foreign operation which remains a subsidiary, a proportionate amount of foreign currency
gains or losses accumulated in OCI related to the subsidiary are reallocated between controlling and non-controlling interests.



(iii)   Transactions
and balances



Foreign currency transactions
are translated into the functional currency of an entity using the exchange rates prevailing at the dates of the transactions.
Generally, foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation
at year end exchange rates of monetary assets and liabilities denominated in currencies other than an entity’s functional
currency are recognized in the statement of income.



| | f) | Earnings (loss) per
                                         share
| | -- | ------------------------------------------------------------------



Basic earnings (loss) per share
is calculated using the weighted average number of common shares outstanding during the period. The Company uses the treasury
stock method to compute the dilutive effect of options, warrants and similar instruments. Under this method the dilutive effect
on earnings per share is calculated presuming the exercise of outstanding options, warrants and similar instruments. It assumes
that the proceeds of such exercise would be used to repurchase common shares at the average market price during the period. However,
the calculation of diluted loss per share excludes the effects of various conversions and exercise of options and warrants that
would be anti-dilutive.



10







|Exeter Resource Corporation                         
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years ended December 31, 2016, 2015 and 2014
|(tabular amounts in $000’s)                         



| | 4. | Summary of Significant Accounting
                                         Policies, Judgements and Estimation Uncertainty (Continued)
| | -- | --------------------------------------------------------------------------------------------------------------------------------------



| | g) | Property and equipment
| | -- | ----------------------



Property and equipment are
carried at cost less accumulated amortization and accumulated impairment losses. Cost includes expenditures that are directly
attributable to the acquisition of the asset. Amortization is calculated at the following annual rates:





|Computer equipment           | Straight-line | - 3-6 years              
|---------------------------- | ------------- | -------------------------
|Computer software            | Straight-line | - 2 years                
|Equipment including vehicles | Straight-line | - 3-7 years              
|Leasehold improvements       | Straight-line | - 5 years (term of lease)
|Office equipment             | Straight-line | - 3-7 years              



| | h) | Share-based compensation
| | -- | ------------------------



The Company has adopted an
incentive stock option plan. All share-based awards are measured and recognized based on the grant date fair value. Fair value
is determined using the Black-Scholes option pricing model. Awards that the Company has the ability to settle with stock are recorded
as equity. Share-based compensation expense is recognized over each tranche’s vesting period, in earnings or capitalized
as appropriate, based on the number of options expected to vest.



| | i) | Income taxes
| | -- | ------------



Income tax expense comprises
current and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it relates to items recognized
either in OCI or directly in equity, in which case it is recognized in OCI or in equity respectively.



Current tax is the expected
tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years.



Deferred income tax is recognised,
using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements.



However, deferred income tax
is not accounted for if it arises from the initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss.



Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply
when the related deferred income tax asset is realized or the deferred income tax liability is settled.



A deferred tax asset is recognized
to the extent that it is probable that future taxable profits will be available against which the temporary difference can be
utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable
that the related tax benefit will be realized.



11







|Exeter Resource Corporation                                                                     
|------------------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                                  
|For the years ended December 31, 2016, 2015 and
        2014
        (tabular amounts in $000’s)



| | 4. | Summary of Significant Accounting
                                         Policies, Judgements and Estimation Uncertainty (Continued)
| | -- | --------------------------------------------------------------------------------------------------------------------------------------



| | j) | Use of estimates and judgements
| | -- | -------------------------------



The preparation of the consolidated
financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. Areas of estimates include assumptions used in
the accounting for share-based compensation, amortization rates, and contingent liabilities. Actual results may differ from these
estimates.



Option pricing models require
the input of highly subjective assumptions including the expected price volatility of the Company’s shares. Changes in input
assumptions can materially affect the fair value estimate.



Estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised
and in any future periods affected.



| | k) | Financial instruments
| | -- | ---------------------



Financial assets and liabilities
are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognized
when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially
all risks and rewards of ownership.



Financial assets and liabilities
are offset when there is a legally enforceable right to offset and there is an intention to settle on a net basis, or realize
the asset and settle the liability simultaneously.



At initial recognition, the
Company classifies its financial instruments in the following categories depending on the purpose for which the instruments were
acquired:



| | · | Loans
                                         and receivables: Loans and receivables are non-derivative financial assets with fixed
                                         or determinable payments that are not quoted in an active market. The Company’s
                                         loans and receivables are comprised of cash and cash equivalents, accounts receivable,
                                         and amounts due from related parties, and are included in current assets due to their
                                         short-term nature.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Loans
and receivables are initially recognized at the amount expected to be received less, when material, a discount to reduce the loans
and receivables to fair value. Subsequently, loans and receivables are measured at amortized cost using the effective interest
method less a provision for impairment.



| | · | Available-for-Sale
                                         Financial Assets (“AFS”): Investments held by the Company are classified
                                         as AFS and are recorded at fair value. Gains and losses arising from changes in fair
                                         value are recognized in other comprehensive income. When an investment is disposed of
                                         or is determined to be impaired, the cumulative gain or loss previously recognized in
                                         other comprehensive income is included in profit or loss for the period. AFS investments
                                         are considered to be impaired when the declines in fair value below cost are considered
                                         significant (20% or more) or prolonged (more than 12 months). The fair value of AFS monetary
                                         assets denominated in a foreign currency is translated at the spot rate at the statement
                                         of financial position date.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Financial
                                         liabilities at amortized cost: Financial liabilities at amortized cost include accounts
                                         payable and accrued liabilities and amounts due to related parties. Accounts payable
                                         are initially recognized at the amount required to be paid less, when material, a discount
                                         to reduce the payables to fair value. Accounts payable are classified as current liabilities
                                         as payment is due within twelve months.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



12







|Exeter Resource Corporation                                                                     
|------------------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                                  
|For the years ended December 31, 2016, 2015 and
        2014
        (tabular amounts in $000’s)



| | 4. | Summary of Significant Accounting
                                         Policies, Judgements and Estimation Uncertainty (Continued)
| | -- | --------------------------------------------------------------------------------------------------------------------------------------



| | l) | Royalty payments
| | -- | ----------------



The Company expenses all advance
royalty payments to mineral property exploration expenditures. Once a decision on development of mineral properties has been made,
the Company will capitalize the advance royalty payments until the commencement of production at which time they will be charged
to operations (see Notes 9 and 14).



| | m) | Land easement
| | -- | -------------



The Company expenses all land
easement payments to mineral property exploration expenditures as the agreement with the Chilean Government can be terminated,
without penalty, if the Caspiche project does not advance.



| | 5. | Management
                                         of Capital
| | -- | --------------------------------------------------------------



The Company’s objectives
when managing capital are to safeguard its ability to continue as a going concern in order to pursue the development of its mineral
properties and to maintain a flexible capital structure which optimizes the cost of capital at an acceptable risk.



In the definition of capital,
the Company includes the components of shareholders’ equity.



The Company manages the capital
structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying
assets. To maintain or adjust its capital structure, the Company may attempt to issue new shares, issue debt and acquire or dispose
of assets.



In order to facilitate the management
of its capital requirements, the Company prepares annual expenditure budgets that are updated as necessary depending on various
factors, including successful capital deployment and general industry conditions. The annual and updated budgets are approved
by the Board of Directors.



| | 6. | Financial Instruments
| | -- | ---------------------



| | a) | Fair Value
| | -- | ----------



The carrying amounts of cash
and cash equivalents, amounts receivable, accounts payable and accrued liabilities and due to and from related parties approximates
fair value due to the short term nature of these financial instruments.



Fair value measurements are categorized
within the following hierarchy:



Level 1 - quoted
prices (unadjusted) in active markets for identical assets or liabilities;



Level 2 - inputs
other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices); and



Level 3 - inputs
for the asset or liability that are not based on observable market data (that is, unobservable inputs).



The available for sale securities
held by the Company are carried at fair value based on quoted prices in an active market (Level 1).



The Company has no financial
assets or liabilities measured at fair value classified as Level 2 or Level 3.



| | b) | Financial Risk Management
| | -- | -------------------------



The Company’s activities
potentially expose it to a variety of financial risks, including credit risk, foreign exchange currency risk, liquidity and interest
rate risk.



13







|Exeter Resource Corporation                                                                     
|------------------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                                  
|For the years ended December 31, 2016, 2015 and
        2014
        (tabular amounts in $000’s)



| | 6. | Financial Instruments(Continued)
| | -- | --------------------------------



Credit risk



Credit risk is the risk that
one party to a financial instrument, will fail to discharge an obligation and cause the other party to incur a financial loss.
Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and amounts receivable.
The Company deposits the majority of its cash and cash equivalents with high credit quality financial institutions in Canada and
holds balances in banks in Chile as required to meet current expenditures. The carrying amount of financial assets recorded in
the financial statements, net of any allowances for losses, represents the Company’s maximum exposure to credit risk.



The Company’s investment
policy is to limit investments to guaranteed investment certificates, banker’s acceptance notes, investment savings accounts
or money market funds with high quality financial institutions in Canada, selected with regards to the expected timing of expenditures
from operations.



Currency risk



Currency risk is the risk that
the fair values or future cash flows of financial instruments will fluctuate because of changes in foreign currency rates. The
Company’s financial instruments are exposed to currency risk where those instruments are denominated in currencies that
are not the same as the functional currency of the entity that holds them, resulting exchange gains and losses impact earnings.



The Company’s cash and
cash equivalents, accounts receivable, accounts payable and accrued liabilities are denominated in several currencies (mainly
Canadian Dollars, Chilean Pesos, US Dollars and Australian Dollars). Such balances are subject to foreign exchange fluctuation.



The Canadian parent company had
the following balances in foreign currencies as at December 31, 2016 and 2015:



|2016                                    
|----------------------------------------
|                                        
|Cash and cash equivalents               
|Accounts payable and accrued liabilities
|Net balance                             
|Equivalent in Canadian Dollars          
|Rate to convert to $ CDN                



|2015                                    
|----------------------------------------
|                                        
|Cash and cash equivalents               
|Accounts payable and accrued liabilities
|Net balance                             
|Equivalent in Canadian Dollars          
|Rate to convert to $ CDN                



14







|Exeter Resource Corporation                                                                                                                            
|-------------------------------------------------------------------------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements
        For the years ended December 31, 2016, 2015 and
        2014
        (tabular amounts in $000’s)



| | 6. | Financial Instruments(Continued)
| | -- | --------------------------------



Based on the above net exposures
as at December 31, 2016, and assuming that all other variables remain constant, a 10% depreciation or appreciation of the US dollar
and Australian dollar against the Canadian dollar would result in an increase/decrease of $47,500 and $6,400 respectively (2015
- $8,700 and $1,600 respectively) in the Company’s net loss.



Interest rate risk



Interest rate risk is the risk
that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The
Company’s interest rate risk mainly arises from the interest rate impact on cash and cash equivalents. Cash and cash equivalents
earn interest based on current market interest rates, which at December 31, 2016 ranged between 0.90% and 1.00%.



Based on the amount of cash and
cash equivalents held at December 31, 2016, and assuming that all other variables remain constant, a 0.5% change in the applicable
interest rate would result in an increase/decrease of $87,000 in the interest earned by the Company per annum.



Liquidity risk



Liquidity risk is the risk that
the Company will not be able to meet its financial obligations as they fall due. The Company manages its liquidity risk by forecasting
cash flows required by operations and anticipated investing and financing activities. The Company had cash and cash equivalents
at December 31, 2016 in the amount of $17,435,000 in order to meet short-term business requirements. At December 31, 2016, the
Company had current liabilities of $548,000 which are due on demand or within 30 days.



| | 7. | Cash and Cash Equivalents
| | -- | -------------------------



|                            |  | December 31,
2016 |        |  | December 31,
2015 |  
|--------------------------- |  | ----------------- | ------ |  | ----------------- | -
|Cash                        |  |                   |        |  |                   |  
|Cash at bank                |  | $                 | 7,764  |  |                   | $
|Investment savings accounts |  |                   | 9,671  |  |                   |  
|Total                       |  | $                 | 17,435 |  |                   | $



| | 8. | Other Financial Assets
| | -- | ----------------------



The Company began 2016 holding
1,000,000 common shares of Goldeye Explorations Limited (“Goldeye) and on November 24, 2016, Treasury Metals Inc. (“Treasury)
announced the acquisition of Goldeye. As a result of the transaction, each shareholder of Goldeye received 0.10 of one common
share of Treasury and Exeter ended 2016 with 100,000 common shares of Treasury. In addition, the Company also holds 312,500 common
shares in San Marco Resources Inc. (“San Marco”).



|                                                         |  | Treasury |    |  | San Marco |  
|-------------------------------------------------------- |  | -------- | -- |  | --------- | -
|                                                         |  | December |    |  | December  |  
|                                                         |  | 31, 2016 |    |  | 31, 2015  |  
|Number of shares held                                    |  | 100,000  |    |  | 1,000,000 |  
|                                                         |  |          |    |  |           |  
|Cost                                                     |  | $        | 50 |  |           | $
|Market value – beginning of year                         |  |          | 20 |  |           |  
|Gain/(Impairment) of available-for-sale financial assets |  |          | 40 |  |           |  
|Market value – end of year1                              |  | $        | 60 |  |           | $



1Classified
as a Level 1 financial instrument and measured at fair value using quoted prices in active markets for identical assets.



15







|Exeter Resource Corporation                         
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years ended December 31, 2016, 2015 and 2014
|(tabular amounts in $000’s)                         



| | 9. | Mineral Properties - Acquisition and Exploration Costs
| | -- | ------------------------------------------------------



| | a) | Acquisition Costs
| | -- | -----------------



Caspiche



By an agreement dated October
11, 2005 and subsequently amended, the Company acquired the right to review a number of properties in the Maricunga region of
Chile. Under the terms of the agreement, the Company had the right to earn a 100% interest in the properties by incurring aggregate
expenditures of US$2.55 million over five years including conducting 15,500 meters (“m”) of drilling with the vendor
retaining a 3% net smelter royalty (“NSR”) in the properties.



Having met the requirements to
earn its interest in the properties effective February 14, 2011 the Company exercised its option and acquired the properties.
The vendor retains a 3% NSR from production from the property and has the right to buy the property back by reimbursing certain
of the Company’s expenditures incurred on the property if it is not put into production within 15 years of exercising the
option. In addition, the Company will be required to pay a further 0.08% NSR from production pursuant to an agreement with a private
entity. The Company is required to make an advance annual royalty payment of US$250,000 up until March 31, 2020 (US$1,500,000
paid to December 31, 2016) and thereafter US$1 million annually for the period March 31, 2021 to March 31, 2025 or until commencement
of commercial production, should production commence prior to March 31, 2025, at which time the advance royalty will cease and
the NSR will be payable.



Water agreement



In January 2014, the Company’s
Chilean subsidiary, Sociedad Contractual Minera Eton Chile (“Eton”), negotiated new water exploration agreement (“Water
Agreement”) terms with the Chilean subsidiary of Canadian company Atacama Pacific Gold Corporation (“Atacama Pacific”).
The new terms amend the original agreement entered into between the parties in May 2013. The Water Agreement allows Eton to earn
an additional 40% interest, for an aggregate 90% interest, in any water rights granted following the discovery of water near Peñas
Blancas (Laguna Verde) in the Maricunga region, northern Chile. To earn the additional 40% interest, Eton is required to incur
an additional 40% (total of 90%) of all expenditures relating to exploration and potential development on the water tenements.
In addition, in the event of approval of water rights by the General Directorate of Water Resources (“DGA”), Eton
will assume Atacama Pacific’s obligation to pay Hydro Exploraciones SpA (“Hydro”), an Atacama Pacific affiliate,
US$15,000 per litre per second (“l/s”) of DGA approved water rights. Atacama Pacific will remain obligated to pay
Hydro US$15,000 per l/s on its 10% interest. Regardless of the total amount of DGA approved water acquired, payments to Hydro
are capped at US$1 million. These payments are not applicable to Eton’s original 50% interest in any water rights acquired.
In addition, Eton will pay US$5,000 per month to Hydro from the date of any application for water rights for assisting with securing
such water rights. The aggregate of the monthly payments are deductible from any amount payable to Hydro for water rights acquired.
The aggregate of the monthly payments are deductible from any amount payable to Hydro for water rights acquired. An initial application
for water rights has been lodged with the DGA however the application requires that Bienes Nacionales (“BBNN”), the
government department responsible for managing state owned land, grants its approval for access to the land. It is uncertain what
the timing for such approval might be or whether such approval will be secured.



Land easement



The Company has the following
two agreements with the Chilean Government covering surface areas at the Caspiche project:



(i) a lease agreement for the
surface rights that correspond to the initial mineral rights in the Caspiche area which was renewed for a further 10 year period
at an annual rate of approximately US$40,000 during 2016 and;



16







|Exeter Resource Corporation                         
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years ended December 31, 2016, 2015 and 2014
|(tabular amounts in $000’s)                         



| | 9. | Mineral Properties - Acquisition and Exploration Costs(Continued)
| | -- | -----------------------------------------------------------------



(ii) a 25 year easement granted
on June 10, 2013 covering most of its additional tenements as well as areas that may be required for potential development of
a mine at Caspiche. Pursuant to this agreement, the Company was required to make total payments of 158,876 Unidades de Fomento
(UF)*, an equivalent of approximately US$6.5 million over a ten year period of which US$3.0 million was paid to December 31, 2016.
In December 2016, the Company and the Chilean government negotiated a reduction in the area covered by the easement with a resulting
reduction in the amount owing. From the time of the renegotiation, the Company is required to make total payments of 11,995 UF,
an equivalent of approximately US$474,000 of which US$59,000 has been paid to December 31, 2016. Seven annual payments of approximately
US$59,000 remain payable.



* Unidad de Fomento (UF). This
is a unit of account used in Chile. The exchange rate between the UF and the Chilean peso is constantly adjusted to inflation
so that the value of the UF remains constant.



| | b) | Exploration Costs
| | -- | -----------------



The tables below show the Company’s
exploration expenditures for the years ended December 31, 2016, 2015 and 2014.



|                                 |  | 2016       |     |  | 2015  |   |       | 2014  | 
|-------------------------------- |  | ---------- | --- |  | ----- | - | ----- | ----- | 
|                                 |  | Generative |     |  | Chile |   |       | Total | 
|Access/easement/advanced royalty |  | $          | -   |  |       | $ | 466   |       | 
|Assays                           |  |            | -   |  |       |   | 31    |       | 
|Consultants and contractors      |  |            | -   |  |       |   | 319   |       | 
|Drilling                         |  |            | -   |  |       |   | (44   | )     | 
|Engineering and geological *     |  |            | 230 |  |       |   | 543   |       | 
|Environmental                    |  |            | -   |  |       |   | 179   |       | 
|Field camp                       |  |            | -   |  |       |   | 331   |       | 
|IVA tax                          |  |            | -   |  |       |   | 31    |       | 
|Legal and title                  |  |            | -   |  |       |   | 376   |       | 
|Metallurgical *                  |  |            | -   |  |       |   | 109   |       | 
|Office operations                |  |            | -   |  |       |   | 207   |       | 
|Resource development             |  |            | -   |  |       |   | -     |       | 
|Travel                           |  |            | 1   |  |       |   | 423   |       | 
|Wages and benefits *             |  |            | 84  |  |       |   | 649   |       | 
|Mineral property costs           |  | $          | 315 |  |       | $ | 3,620 |       | 



* Includes share-based compensation as reflected
below:



|                           |  | 2016       |    |  |       |   |     | 2015  |  |   | 2014  | 
|-------------------------- |  | ---------- | -- |  | ----- | - | --- | ----- |  | - | ----- | 
|                           |  | Generative |    |  | Chile |   |     | Total |  |   | Chile | 
|Engineering and geological |  | $          | -  |  |       | $ | 140 |       |  | $ | 140   | 
|Metallurgical              |  |            | -  |  |       |   | -   |       |  |   | -     | 
|Wages and benefits         |  |            | 32 |  |       |   | 57  |       |  |   | 89    | 
|Total                      |  | $          | 32 |  |       | $ | 197 |       |  | $ | 229   | 



17







|Exeter Resource Corporation                         
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years ended December 31, 2016, 2015 and 2014
|(tabular amounts in $000’s)                         



| | 10. | Share Capital
| | --- | -------------



The Company is authorized to
issue an unlimited number of common shares without par value and an unlimited number of preferred shares.



| | 11. | Stock Option Plan
| | --- | -----------------



The Company
has adopted an incentive stock option plan (the “Plan”). On May 31, 2013, shareholders approved an amendment reducing
the aggregate number of shares of the Company’s capital stock issuable pursuant to options granted under the Plan, such
that options granted under the Plan may not exceed 10% of the issued and outstanding shares of the Company at the time of the
option grant (the “Amended Plan”). Under TSX rules, stock option plans are required to be approved by shareholders
every two years and as such the Amended Plan was approved by shareholders on June 7, 2016.



At December
31, 2016, the maximum number of options issuable under the Plan was 8,866,025. Options granted under the Plan may have a maximum
term of 10 years, but options granted to date have had a life of 5 years.



Unless subsequently
amended, the exercise price of options granted under the Plan will not be less than the last closing market price of the Company’s
shares immediately preceding the grant date. Options granted under the Plan may be subject to vesting at times as determined by
the directors of the Company and the Toronto Stock Exchange. Stock options usually vest in tranches over a period of 1 to 2 years
(50 - 100% per year).



A summary of the changes in
share options during the year is as follows:





|                                       |  | December 31, 2016 |           |   | December 31, 2015                 |  
|-------------------------------------- |  | ----------------- | --------- | - | --------------------------------- | -
|                                       |  | Options           |           |   | Weighted  Average  Exercise Price |  
|Options outstanding, beginning of year |  |                   | 7,445,000 |   |                                   | $
|Granted                                |  |                   | -         |   |                                   |  
|Exercised                              |  |                   | (252,500  | ) |                                   |  
|Cancelled                              |  |                   | -         |   |                                   |  
|Forfeited                              |  |                   | -         |   |                                   |  
|Expired                                |  |                   | -         |   |                                   |  
|Options outstanding, end of year       |  |                   | 7,192,500 |   |                                   | $





During 2015, option holders voluntarily
surrendered 7,252,500 options and the Company accounted for these as cancellations whereby the unvested balance of the original
fair value was immediately expensed in the amount of $nil (2014 -$nil). Additionally, the Company re-priced 215,000 options which
ranged in price from $0.70 to $1.27 to an exercise price of $0.50 per option, recognizing $38,650 in additional share-based compensation.



During 2015, the Company granted
7,230,000 options at an average exercise price of $0.53. Of the options granted, 1,500,000 were accounted for as a re-pricing
from an exercise price of $1.22 to an exercise price of $0.54 resulting in the Company recognizing $138,809 in share-based compensation.
The remaining 5,730,000 options were accounted for as a new grant and the Company recognized share-based compensation expense
of $1,053,577. Total share-based compensation for the year ended 2015 was $1,231,036.



There were 252,500 (2015 –
nil) options exercised during the year at an exercise price of $0.50 (2015 - $nil).



18







|Exeter Resource Corporation                         
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years ended December 31, 2016, 2015 and 2014
|(tabular amounts in $000’s)                         



| | 11. | Stock Option Plan(Continued)
| | --- | ----------------------------



The following
table summarizes information about the stock options outstanding at December 31, 2016.



|Outstanding Options |  |  | Exercisable Options |          
|------------------- |  |  | ------------------- | ---------
|Prices ($)          |  |  | Number              |          
|0.50                |  |  |                     | 2,652,500
|0.54                |  |  |                     | 1,750,000
|0.56                |  |  |                     | 2,790,000
|                    |  |  |                     | 7,192,500



Share-based Compensation



No options
were granted by the Company during the year ended December 31, 2016 (2015 - 7,230,000).



The fair
value of the 7,230,000 options granted by the Company during the year ended December 31, 2015 was estimated at the grant date
using the Black-Scholes option pricing model with the following assumptions:



|                           |  | 2015 |            
|-------------------------- |  | ---- | -----------
|Expected annual volatility |  |      | 60         
|Risk-free interest rate    |  |      | 0.59%-0.90%
|Expected life              |  |      | 5 years    
|Expected dividend yield    |  |      | 0.0        



Share-based compensation expense
for the years ended December 31 has been allocated as follows:



|                                          |  | 2016 |     |  | 2015 |   |       | 2014 | 
|----------------------------------------- |  | ---- | --- |  | ---- | - | ----- | ---- | 
|Administration salaries and consulting    |  | $    | 152 |  |      | $ | 232   |      | 
|Directors’ fees                           |  |      | 280 |  |      |   | 500   |      | 
|Management fees                           |  |      | 32  |  |      |   | 42    |      | 
|Mineral property exploration expenditures |  |      | 229 |  |      |   | 457   |      | 
|Total                                     |  | $    | 693 |  |      | $ | 1,231 |      | 



| | 12. | Related Party Transactions
| | --- | --------------------------



An amount due from a related
party of $12,000 at December 31, 2016 (December 31, 2015 - $18,000) is for the recovery of common expenditures from Rugby Mining
Limited (“Rugby”). The amounts due from related parties are non-interest bearing and are due on demand.



Amounts due to related parties
of $79,000 at December 31, 2016 (December 31, 2015 - $20,000) is for management, consulting and exploration fees and for expenses
incurred while conducting the Company’s business. The amounts due to related parties are non-interest bearing and are due
on demand.



During the year ended December
31, 2016 a total of $665,000 (2015 - $792,000) was paid or accrued for related party transactions as described below:



| | a) | Exploration and consulting fees
                                         of $140,000 (2015 - $185,000) were paid or accrued to a corporation of which a Co-Chairman
                                         of the Company is a principal. As at December 31, 2016, the Company had amounts owing
                                         of $31,000 (December 31, 2015 - $5,000) to this company.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



19







|Exeter Resource Corporation                         
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years ended December 31, 2016, 2015 and 2014
|(tabular amounts in $000’s)                         



| | 12. | Related Party Transactions(Continued)
| | --- | -------------------------------------



| | b) | Exploration fees of $267,000 (2015
                                         - $269,000) were paid or accrued to a corporation controlled by the Vice-President, Development
                                         and Operations. As at December 31, 2016, the Company had amounts owing of $43,000 (December
                                         31, 2015 - $13,000) to this company.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) | Management fees of $83,000 (2015
                                         - $107,000) were paid to a corporation controlled by a Co-Chairman of the Company. As
                                         at December 31, 2016, the Company had amounts owing of $5,000 (December 31, 2015 - $Nil)
                                         to this company.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d) | Management fees of $175,000 (2015
                                         - $231,000) were paid or accrued to a corporation controlled by the Chief Financial Officer
                                         of the Company. As at December 31, 2016, the Company had amounts owing of $Nil (December
                                         31, 2015 - $2,000) to this company.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 13. | Executive Compensation
| | --- | ----------------------



Key management personnel are
those persons that have the authority and responsibility for planning, directing and controlling the activities of the Company,
directly or indirectly. Key management personnel of the Company at December 31, 2016 included four (4) (2015 - 4, 2014 - 4) executive
officers and three (3) (2015 - 3, 2014 - 3) independent members of the Board of Directors.



The following compensation has
been provided to key management personnel for the years ended December 31:



|                                 |  | 2016 |       |  | 2015 |   |       | 2014 | 
|-------------------------------- |  | ---- | ----- |  | ---- | - | ----- | ---- | 
|Compensation - cash and benefits |  | $    | 748   |  |      | $ | 986   |      | 
|Share-based payments             |  |      | 439   |  |      |   | 831   |      | 
|Total                            |  | $    | 1,187 |  |      | $ | 1,817 |      | 





| | 14. | Contractual Obligations
| | --- | -----------------------



The Company leases offices in
Canada and Chile and has land easement payments and advance royalty obligations related to its properties. Option payments and
property expenditure obligations are contingent on exploration results and can be cancelled at any time should exploration results
so warrant. Other financial commitments are summarized in the table below:



|Payments Due by Year        |  | Total |       |  | 2017 |   |     | 2018 – 2019 |  |   | 2020 – 2021 |  |  | 2022 - 2026 |      
|--------------------------- |  | ----- | ----- |  | ---- | - | --- | ----------- |  | - | ----------- |  |  | ----------- | -----
|Advance royalty payments*   |  | $     | 8,056 |  |      | $ | 336 |             |  | $ | 671         |  |  | $           | 1,678
|Land easement payments**    |  |       | 1,061 |  |      |   | 133 |             |  |   | 265         |  |  |             | 265  
|Office and equipment leases |  |       | 565   |  |      |   | 307 |             |  |   | 258         |  |  |             | -    
|Property access agreements  |  |       | 51    |  |      |   | 51  |             |  |   | -           |  |  |             | -    
|Total                       |  | $     | 9,733 |  |      | $ | 827 |             |  | $ | 1,194       |  |  | $           | 1,943



| | * | Obligation in US dollars converted to Canadian dollars
at the closing rate of the reporting period (1 USD = 1.3427 CAD).
| | - | ------------------------------------------------------------------------------------------------------------------------

| | ** | Obligation in Unidad de Fomento (UF). This value is converted
to Canadian dollars at the closing rate of the reporting period (1 UF = 53.01 CAD).
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------

53.01 CAD).



20







|Exeter Resource Corporation                                                                                                                            
|-------------------------------------------------------------------------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements
        For the years ended December 31, 2016, 2015 and
        2014
        (tabular amounts in $000’s)



| | 15. | Segmented Information
| | --- | ---------------------



The Company’s
activities are all in the one reportable operating segment - mineral property acquisition, exploration and development. The following
provides required disclosures on a geographic basis:



|December 31,2016                        |  |        |        |   |       |   |       |       | 
|--------------------------------------- |  | ------ | ------ | - | ----- | - | ----- | ----- | 
|                                        |  | Canada |        |   | Chile |   |       | Total | 
|Cash and cash equivalents               |  | $      | 17,122 |   |       | $ | 313   |       | 
|Amounts receivable and prepaid expenses |  |        | 88     |   |       |   | 22    |       | 
|Due from related party                  |  |        | 12     |   |       |   | -     |       | 
|Other financial assets                  |  |        | 115    |   |       |   | -     |       | 
|Property and equipment                  |  |        | 3      |   |       |   | 37    |       | 
|                                        |  |        | 17,340 |   |       |   | 372   |       | 
|Current liabilities                     |  |        | (289   | ) |       |   | (259  | )     | 
|                                        |  | $      | 17,051 |   |       | $ | 113   |       | 
|Net loss – year ended December 31, 2016 |  | $      | 2,000  |   |       | $ | 3,964 |       | 



|December 31,2015                        |  |        |        |   |       |   |       |       | 
|--------------------------------------- |  | ------ | ------ | - | ----- | - | ----- | ----- | 
|                                        |  | Canada |        |   | Chile |   |       | Total | 
|Cash and cash equivalents               |  | $      | 22,268 |   |       | $ | 40    |       | 
|Amounts receivable and prepaid expenses |  |        | 79     |   |       |   | 53    |       | 
|Due from related party                  |  |        | 18     |   |       |   | -     |       | 
|Other financial assets                  |  |        | 26     |   |       |   | -     |       | 
|Property and equipment                  |  |        | 7      |   |       |   | 52    |       | 
|                                        |  |        | 22,398 |   |       |   | 145   |       | 
|Current liabilities                     |  |        | (193   | ) |       |   | (138  | )     | 
|                                        |  | $      | 22,205 |   |       | $ | 7     |       | 
|Net loss – year ended December 31, 2015 |  | $      | 2,968  |   |       | $ | 5,929 |       | 



21







|Exeter Resource Corporation                         
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years ended December 31, 2016, 2015 and 2014
|(tabular amounts in $000’s)                         



| | 16. | Income Taxes
| | --- | ------------



Income tax expense differs from
the amount that would result from applying the Canadian federal and provincial income tax rates to loss before income taxes. These
differences result from the following items:



|                                                                     |  | 2016 |        |   | 2015 |   |        | 2014 | 
|-------------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- | 
|Net loss for the year before income tax                              |  | $    | 5,964  |   |      | $ | 8,897  |      | 
|Combined federal and provincial tax rate                             |  |      | 26.00  | % |      |   | 26.00  | %    | 
|Income tax recovery at statutory rates                               |  | $    | (1,551 | ) |      | $ | (2,313 | )    | 
|Losses and other deductions for which no benefit has been recognized |  |      | 1,012  |   |      |   | 1,666  |      | 
|Non-deductible share-based compensation                              |  |      | 180    |   |      |   | 320    |      | 
|Non-deductible mineral property exploration costs                    |  |      | 312    |   |      |   | 277    |      | 
|Foreign exchange rate and tax rate differences                       |  |      | (25    | ) |      |   | (48    | )    | 
|Other                                                                |  |      | 72     |   |      |   | 98     |      | 
|Income tax recovery                                                  |  | $    | Nil    |   |      | $ | Nil    |      | 



| | 16. | Income Taxes(Continued)
| | --- | -----------------------



The significant components of
the Company’s consolidated future tax assets are as follows:



|                                         |  | 2016 |        |  | 2015 |   |        | 2014 | 
|---------------------------------------- |  | ---- | ------ |  | ---- | - | ------ | ---- | 
|Non-capital loss carry forwards – Canada |  | $    | 7,080  |  |      | $ | 6,688  |      | 
|Non-capital loss carry forwards – Chile  |  |      | 4,490  |  |      |   | 3,676  |      | 
|Exploration and development deductions   |  |      | 18,721 |  |      |   | 18,088 |      | 
|Property and equipment – Canada          |  |      | 37     |  |      |   | 36     |      | 
|Share issue costs                        |  |      | -      |  |      |   | -      |      | 
|Other                                    |  |      | 26     |  |      |   | 53     |      | 
|Unrecognised deferred tax asset          |  | $    | 30,354 |  |      | $ | 28,541 |      | 



The Company has available non-capital
losses for Canadian income tax purposes which may be carried forward to reduce taxable income in future years. If not utilized,
the non-capital losses in the amount of $27.2 million expire as follows:



| | 2026 |  |  | $ | 2,242  | 
| | ---- |  |  | - | ------ | 
| | 2027 |  |  |   | 2,001  | 
| | 2028 |  |  |   | 2,424  | 
| | 2029 |  |  |   | 4,038  | 
| | 2031 |  |  |   | 4,083  | 
| | 2032 |  |  |   | 4,135  | 
| | 2033 |  |  |   | 3,031  | 
| | 2034 |  |  |   | 2,077  | 
| | 2035 |  |  |   | 1,694  | 
| | 2036 |  |  |   | 1,507  | 
| |      |  |  | $ | 27,232 | 



22







|Exeter Resource Corporation                         
|----------------------------------------------------
|Notes to the Consolidated Financial Statements      
|For the years ended December 31, 2016, 2015 and 2014
|(tabular amounts in $000’s)                         



At December 31, 2016, the Company
also has tax loss carry forwards in Chile which have no expiry, totaling $16.6 million, which are available to offset future taxable
income.



Tax benefits
have not been recorded as it is not considered more likely than not that they will be utilized.



23