Exhibit 99.3







Management’s Discussion and Analysis

For The Year Ended

December 31, 2016





1







Management’s
Discussion and Analysis



March 24, 2017



In this document: (i) unless the content
otherwise requires, references to “our”, “us”, “its”, “the Company” or “Exeter”
mean Exeter Resource Corporation and its subsidiaries; (ii) information is provided as at December 31, 2016, unless otherwise
stated; (iii) all references to monetary amounts are to Canadian Dollars, unless otherwise stated; and (iv) “$” refers
to Canadian Dollars and “US$” refers to US Dollars.



The following discussion is management’s
assessment and analysis of the results and financial condition of Exeter and should be read in conjunction with the accompanying
audited financial statements and related notes.



Forward Looking Statements



This MD&A contains “forward-looking
information” and “forward-looking statements” (together, the “forward-looking statements”) within
the meaning of applicable securities laws and the United States Private Securities Litigation Reform Act of 1995, as amended.
All statements other than statements of historical fact are forward looking statements.



These forward-looking statements, principally
under the heading “Outlook”, but also elsewhere in this document include estimates, forecasts and statements as to
the Company’s belief with respect to, among other things, potential economics and development options for Caspiche as set
out in the amended preliminary economic analysis study released December 19, 2014, the timing of its drilling, exploration programs
and exploration results, objectives of and the completion of various studies, potential to secure adequate quantities of water,
including water rights at its Peñas Blancas water discovery, and power, permitting, the Company’s ability to mitigate
against foreign exchange risk, the ability of the Company to access capital to fund its activities, the ability of the Company
to respond to market fluctuations and government regulations and the ability of the Company to demonstrate that a commercially
viable mineral deposit exists on its Caspiche project, and the merits of the legal challenge to the easement over surface rights
at Caspiche granted by the Chilean government.



These forward-looking statements appear
in a number of different places in this document and can be identified by words and phrases such as, but not limited to, “estimates”,
“plans”, “is expected”, “objectives” or variations of such words or phrases, or statements
that certain activities, events or results “may”, “would” or “could” occur. While the Company
has based these forward-looking statements on its expectations about future events as at the date that this document was prepared,
the statements are not a guarantee of the Company’s future performance and are subject to risks, uncertainties, assumptions
and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking
statements. The Company’s forward-looking statements are based on the beliefs, expectations and opinions of management on
the date the statements are made, and the Company does not assume any obligation to update forward-looking statements if circumstances
or management’s beliefs, expectations or opinions should change except as required by law. Such factors and assumptions
include, amongst others, the effects of general economic conditions; changing foreign exchange rates and actions by government
authorities; uncertainties associated with negotiations; misjudgements in the course of preparing forward-looking statements;
fluctuations in gold, copper, silver and other commodity prices and currency exchange rates; uncertainties relating to interpretation
of drill results and the geology; continuity and grade of mineral deposits; uncertainty of estimates of capital and operating
costs; price and availability of capital equipment; price of various other inputs such as fuel, electricity and reagents; recovery
rates, production estimates and estimated economic return; the need for cooperation of government agencies and native groups in
the exploration and development of properties and the issuance of required permits; the need to obtain additional financing to
develop properties and uncertainty as to the availability and terms of future financing; the possibility of delay in exploration
or development programs or in construction projects and uncertainty of meeting anticipated program milestones; risks associated
with project development, including risks associated with the failure to satisfy the requirements of the Company’s agreement
with Anglo American on its Caspiche project which could result in loss of title; uncertainty as to timely availability of permits
and other governmental approvals, uncertainty of the outcome of the legal challenge to the grant by the Chilean government of
the easement over surface rights, uncertainty regarding the potential to secure adequate water, including water rights at Peñas
Blancas, and other risks and uncertainties disclosed under “Risks” below and other risks and uncertainties disclosed
in the Company’s current Annual Information Form, filed with the Canadian securities regulatory authorities and other information
released by it and filed with the appropriate regulatory agencies. Although the Company has attempted to identify important risk
factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements,
there may be other risk factors that cause actions, events or results not to be as anticipated, estimated or intended. There can
be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially
from those anticipated in such statements. For the reasons set forth above, readers should not place undue reliance on forward-looking
statements. All statements are made as of the date of this MD&A and the Company is under no obligation to update or alter
any forward-looking statements except as required under applicable securities laws.



2







Cautionary note to U.S. Investors concerning reserve and
resource estimates



This MD&A and other information released
by Exeter have been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from
the requirements of United States securities laws. The terms “mineral reserve”, “proven mineral reserve”
and “probable mineral reserve” are Canadian mining terms as defined in accordance with Canadian National Instrument
43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy
and Petroleum (the “CIM”) - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by
the CIM Council, as amended (“CIM Standards”). These definitions differ from the definitions in SEC Industry Guide
7 under the United States Securities Act of 1993, as amended (the “Securities Act”). 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 and the CIM Standards; 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 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. 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 contains 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.



3







Report on Operations



Year Ended December 31, 2016



The Company continued its work on the
Caspiche gold-copper project in the Maricunga region of Northern Chile in an effort to advance the project. The primary focus
through 2016 was the advancement of programs related to securing water and investigating infrastructure requirements for the Caspiche
project as well as the ongoing assessment of lower capital alternatives for the potential development of the project. In addition,
during the third quarter period, the Company reviewed a number of new opportunities and conducted a site visit on one potential
project of interest. Subsequent to December 31, 2016 on January 17, 2017, the Company announced that it had secured an option
over a second water source. The option, which has a term of four years can be dropped at any time without penalty, requires aggregate
payments over the four year term of US$1.25 million. The option is for purchasing desalinated water and will provide a timely
development pathway for its Caspiche oxide project.



Caspiche represents one of the largest
mineral discoveries made in Chile in recent years. The unique characteristics of the deposit, with its surface oxide gold zone
and higher grade gold-copper core, offer future mining opportunities that range from modest scale oxide heap leach gold production,
to larger scale open pit/underground mining of the underlying gold-copper zone.



An amended preliminary economic assessment
(“2014 PEA”) for Caspiche released on December 19th, 2014 (with an effective date of April 30, 2014) identified three
new potential development options focussed on lower throughputs and the higher grade core of the deposit. All three required lower
Capex and would use lower quantities of water to support mining operations compared to previous studies. The 2014 PEA titled “Amended
NI 43-101 Technical Report on the Caspiche Project, Atacama Region, Chile” dated December 19th, 2014 prepared by Santiago
based engineering consultancies, NCL Ingeniería y Construcción and Alquimia Conceptos S.A. can be found at www.exeterresource.comor on SEDAR.



PROJECTS



CHILE



Caspiche Project



Northern Chile - Maricunga



In 2005, the Company entered into an agreement
with Anglo American with respect to seven properties in the Maricunga region of Chile. The terms of the agreement provided for
increasing annual drilling and exploration commitments over five years, and the phased reversion of five properties to Anglo American.
Exeter satisfied its obligations under the agreement, having spent more than the required minimum of US$2.55 million, including
completing more than 15,500 metres (“m”) of required drilling, and exercised its option to acquire a 100% interest
in the Caspiche property in February 2011. Anglo American retains a 3% net smelter royalty (“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 from the date the Company exercised its 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.



The Caspiche project is located in a prolific
region of gold-porphyry deposits, 15 kilometres (“km”) (10 miles) southeast of Kinross Gold’s Maricunga open
pit mine (formerly known as the Refugio mine) and 11 km (7 miles) north of Barrick Gold – Kinross Gold’s Cerro Casale
project.



4







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. 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;



(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.



Results from Operations



The Company began 2016 with 88,407,753
common shares outstanding and ended the year with 88,660,253 common shares outstanding. During the year ended December 31, 2016,
the Company received proceeds of $126,250 and issued 252,500 common shares upon the exercise of options.



As at March 24, 2017 the Company had 88,716,503
shares outstanding and 7,236,250 options outstanding.



Summary of Financial Results



Selected Information



The Company’s annual consolidated
financial statements for the year ended December 31, 2016 (the “Consolidated Financial Statements”) have been prepared
in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting
Standards Board (“IASB”).



Year ended December 31, 2016



The Company ended its 2016 fiscal year
with $17.4 million in cash and cash equivalents, and incurred approximately $3.9 million in exploration expenditures during the
year. Non-cash share-based compensation expense of $693,000 was incurred due to recognizing the vesting of certain stock options
granted or re-priced in 2015.



5







Year ended December 31, 2016 compared to the year ended
December 31, 2015



At December 31, 2016 the Company had $17.4
million in cash and cash equivalents, $4.9 million less than the $22.3 million held at December 31, 2015. The decrease is mostly
attributable to the Company utilizing its cash to fund exploration activities.



During 2016, the Company recorded a loss
of approximately $6.0 million compared to approximately $8.9 million in 2015.



The Company currently has no revenue generating
activities, but does earn interest income. Interest income of $204,000 was recognized in 2016 compared to $291,000 in 2015.



Significant variances for expenses:



| | · | Mineral
                                         property expenditures: $3.9 million ($6.3 million in 2015) – The higher expenditure
                                         in 2015 was largely attributable to costs related to the completion of the water exploration
                                         drilling program at Peñas Blancas and the reduction of approximately $565,000
                                         in the annual land easement payment in 2016. No drilling programs were undertaken in
                                         2016. Expenditures on access and easement payments, drilling, IVA tax and wages and benefits
                                         were cumulatively higher by approximately $2.3 million in 2015 compared to 2016.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Administration
                                         salaries and consulting: $439,000 ($760,000 in 2015) – the higher amount in 2015
                                         was mainly due to higher salary costs prior to certain staff reductions, the recording
                                         of a provision for staff termination and higher stock based compensation in 2015 compared
                                         to 2016. Voluntary reductions of salaries implemented in Q4 2015 also contributed to
                                         lower expenditures in 2016.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Directors’
                                         fees: $385,000 ($639,000 in 2015) – the change is mainly due to higher stock based
                                         compensation of approximately $220,000 recognized in 2015 compared to 2016. Voluntary
                                         reductions in fees implemented in Q4 2015 of approximately $45,000 also contributed to
                                         lower expenditures in 2016.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Shareholder
                                         communications: $538,000 ($390,000 in 2015) - the higher amount in 2016 is due to increased
                                         marketing related activities.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Three months ended December 31, 2016
compared to the three months ended December 31, 2015



For the three month period ended December
31, 2016, the Company recorded a loss from operations of approximately $1.6 million ($0.02 per share) which is approximately $786,000
lower compared to the loss from operations for the same period in 2015 of $2.4 million ($0.03 per share).



Significant variance for expenses:



| | · | Mineral
                                         property expenditures: $1.1 million ($1.6 million in 2015) – the lower expenditure
                                         in 2016 compared to 2015 is mainly due to the reduction of approximately $565,000 in
                                         the annual land easement payment following the agreement with the Chilean government
                                         to reduce the surface of the area of the easement in 2016.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Administration
                                         salaries and consulting: $83,000 ($131,000 in 2015) – the reduction in expenditure
                                         in 2016 is mainly due to higher stock based compensation of approximately $58,000 recognized
                                         in 2015.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Directors’
                                         fees: $59,000 ($222,000 in 2015) – the reduction in expenditure in 2016 is mainly
                                         attributable to higher share-based compensation of approximately $161,000 recognized
                                         in 2015.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



6







The following is a summary of results
from the Company’s consolidated financial statements:



|                                        |  | ($000’s, except share data) |      
|--------------------------------------- |  | --------------------------- | -----
|Year ended December 31,                 |  | 2016                        |      
|Interest income                         |  | $                           | 204  
|Mineral property exploration costs      |  | $                           | 3,935
|Share-based compensation 1              |  | $                           | 693  
|Loss                                    |  | $                           | 5,964
|Basic and diluted loss per common share |  | $                           | 0.07 



| | 1) | share-based compensation costs have been allocated to administrative
                                         salaries and consulting, management compensation, directors’ fees, mineral property
                                         exploration expenditures and shareholder communications.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|As at             |  | December 31, 2016 |          |   | December 31, 2015 |   |          | December 31, 2014 | 
|----------------- |  | ----------------- | -------- | - | ----------------- | - | -------- | ----------------- | 
|Total assets      |  | $                 | 17,712   |   |                   | $ | 22,543   |                   | 
|Total liabilities |  | $                 | 548      |   |                   | $ | 331      |                   | 
|Share capital     |  | $                 | 246,267  |   |                   | $ | 246,089  |                   | 
|Deficit           |  | $                 | (275,520 | ) |                   | $ | (269,556 | )                 | 



The following selected financial information
is a summary of the eight most recently completed quarters up to December 31, 2016.



Comparison to Prior Quarterly Periods



|                                        |  | 2016         |       |  | 2015         |  
|--------------------------------------- |  | ------------ | ----- |  | ------------ | -
|($000’s, except share data)             |  | 4th  Quarter |       |  | 3rd  Quarter |  
|Total Revenues                          |  |              | -     |  |              |  
|Net loss                                |  |              | 1,587 |  |              |  
|Basic and diluted loss per common share |  | $            | 0.02  |  |              | $



The loss in Q4 2016 is higher than the
previous quarter mainly due to higher project expenditures related to preparations for a new drilling program that will start
in 2017. The loss in Q3 2016 is lower compared to the previous quarter mainly due to reduced travel activity and lower share based
compensation recognized. The lower loss in Q2 2016 compared to the previous quarter is mainly the result of the payment of the
annual advanced royalty of US$250,000 and stock exchange filing fees incurred in Q1 of approximately $101,000. The decrease in
the loss in the first quarter of 2016 compared to the previous quarter was mainly due to higher project expenditures and the annual
land easement payment incurred in Q4 2015. The loss in Q4 2015 is higher than the previous quarter mainly due to the annual payment
for the land easement at Caspiche of approximately $643,000. The increase in the loss in the third quarter in 2015 compared to
the previous quarter is mainly due to higher share based compensation recognized in Q3 which is partially offset by lower project
expenditures incurred in the same period. The decrease in the loss in the second quarter 2015 compared to the previous quarter
was mainly due to lower project expenditures in Q2 due to the completion of the water exploration program early in Q2, exchange
filing fees of approximately $122,000 and the payment of the annual advance royalty of US$250,000 incurred in Q1.



Liquidity and Capital Resources



The Company’s cash and cash equivalents
at December 31, 2016 totalled $17.4 million compared to $22.3 million at December 31, 2015, a decrease of about $4.9 million.
The Company continues to utilize its cash resources to fund project exploration and administrative requirements. Aside from cash
and cash equivalents, the Company has no material liquid assets. While the Company has successfully raised funds through past
equity financings, there are no guarantees that such sources of funds will be available in the future.



7







Management continues to evaluate and adjust
its planned level of activities to ensure that adequate levels of working capital are maintained. The availability of funding
will affect the planned activity levels at the Caspiche project and expenditures will be adjusted to match available funding.



Currently, the Company intends to continue
to utilize its cash and cash equivalent to fund the exploration and development of its properties, with specific focus on Caspiche
and for general working capital purposes.



The Company has no loans or bank debt
and there are no restrictions on the use of its cash resources. The Company has not issued any dividends and management does not
expect this will change in the near future.



Financial Instruments



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.



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 accounts 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 carrying amount 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.



The Company operates in Canada and Chile,
and it is therefore exposed to foreign exchange risk arising from transactions denominated in foreign currencies.



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). Foreign currency balances, which are held in the Canadian parent, are subject
to fluctuation against the Canadian Dollar. Foreign currency balances, which are held in the Chilean subsidiary, are subject to
fluctuation against the Chilean Peso.



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                



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.



8







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 the 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 1.10%.



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 at December 31, 2016 in
the amount of $17.4 million 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.



Contractual Obligations



The Company leases offices in Canada and
Chile and has expenditure, option payment, 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).



Related
Party Transactions



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) | $140,000 (2015 -$185,000) were
                                         paid or accrued to Rowen Company Limited, a corporation of which Bryce Roxburgh, Co-Chairman
                                         and former President and CEO of the Company is a principal. These services were incurred
                                         in the normal course of operations for exploration and consulting fees. As at December
                                         31, 2016, the Company had amounts owing of $31,000 (December 31, 2015 -$5,000) to this
                                         company.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) | $267,000 (2015 -$269,000) were
                                         paid or accrued to Jerry Perkins & Associates Pty. Ltd., a corporation controlled
                                         by Jerry Perkins, the Vice-President, Exploration and Development of the Company. These
                                         services were incurred in the normal course of operations for exploration fees. As at
                                         December 31, 2016, the Company had amounts owing of $43,000 (December 31, 2015 -$13,000)
                                         to this company.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) | $83,000 (2015 -$107,000) were paid
                                         to Canaust Resources, a corporation controlled by Yale Simpson, Co-Chairman of the Company.
                                         These services were incurred in the normal course of operations for management fees.
                                         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 667060 B.C. Ltd, a corporation controlled by Cecil
                                         Bond, the Chief Financial Officer of the Company. These services were incurred in the
                                         normal course of operations for management fees. As at December 31, 2016, the Company
                                         had amounts owing of $Nil (December 31, 2015 -$2,000) to this company.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



9







All the services and transactions
described above were made on terms equivalent to those that prevail with arm’s length transactions.



During the period, the Company
shared costs of certain common expenditures including administrative support, office overhead and travel with Rugby Mining Limited
(“Rugby”).



| | e) | The Company, along with Rugby,
                                         incurs certain expenditures for staff and exploration expenditures on behalf of each
                                         other. The net amount provided or incurred by the Company on behalf of Rugby during the
                                         year ended December 31, 2016 was $73,000 (2015 -$95,000). As at December 31, 2016, the
                                         Company had amounts receivable of $12,000 (December 31, 2015- $18,000) from Rugby. The
                                         amounts due from Rugby are non-interest bearing and are due on demand.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Outlook



The Company will continue to optimize
Caspiche development options and investigate infrastructure alternatives that could enhance project economics. The intention is
to continue the process of de-risking the project such that it stands out, as one of the few projects globally with the potential
to be advanced rapidly.



The 2014 PEA reflects the staged development
potential at Caspiche with initial development of an open pit mine focussed on the near-surface, gold only oxide zone followed
by further open pit or underground development. The preliminary economics and modest capital requirements, demonstrate that advancing
the standalone surface oxide gold zone through to a production decision, is a logical potential development option for Caspiche.



With the staged development potential
at Caspiche, the Company continues to focus on identifying, evaluating and securing water sources to support the heap leach oxide
gold stage and the follow-on gold – copper sulphide stage of a potential mine development.



In January 2017, Exeter announced that
it had secured a second water source which will provide a timely development pathway to its Caspiche project. The Company signed
an option agreement (the “Option”) with Cleanairtech Sudamerica SA (“CAT”) to supply 50 litres per second
of desalinated water. The intention of the Company is to use this water in construction, commissioning and operation of the first
stage heap leach gold facility at Caspiche, subject to the outcome of a feasibility study. The Option, which has an initial term
of three years, can be extended for an additional year. To maintain the Option over the four year period, Exeter will make escalating
annual option payments totaling US$1,250,000.



In February 2017, the Company announced
commencement of a 6,000 metre drill program on Caspiche. The objective of the this program is to improve the definition of the
known oxide gold zone and other potentially leachable gold zones currently not included in the oxide gold heap leach mine plan,
bringing confidence levels to feasibility standards.



Upon completion of the program, the Company
expects to initiate advanced studies on the project using updated capital and operating costs estimates. Alternative infrastructure
requirements associated with the desalinated water option will also be assessed.



Detailed scientific and environmental
programs using experienced consultants, remains a short term objective. The next program will be to accurately model the zone
for potential mine development, its interactions with adjacent areas, consult on possible uses with other stakeholders and communities
as a basis for future development plans.



A secondary focus for Exeter is to actively
review corporate opportunities with the possibility of acquiring assets that will provide additional value for shareholders. In
particular, the Company is focusing on securing assets/projects in the America’s. The Company remains committed to prudently
managing its capital, while seeking to maximize shareholder value.



Proposed Transactions



The Company does not currently have any
proposed transactions.



10







Off-Balance Sheet Arrangements



The Company does not have any material off-balance sheet arrangements.



Critical Accounting Estimates and Policies



The Company’s accounting policies
are discussed in detail in the Consolidated Financial Statements, however, accounting policies require the application of management’s
judgement in respect of the following relevant matters:



| | (i) | use of estimates – the preparation
                                         of financial statements in conformity with IFRS requires management to make estimates
                                         and assumptions that affect the reported amounts of assets and liabilities, disclosure
                                         of contingent assets and liabilities at the date of the financial statements, and the
                                         reported amounts of revenue and expenses during the reporting period. Significant areas
                                         requiring the use of estimates include accrued liabilities and the determination of the
                                         assumptions used in the calculation of share-based compensation expense. Actual results
                                         could differ from those estimates used in the financial statements; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | share-based compensation –
                                         the Company provides compensation benefits to its employees, directors, officers and
                                         consultants through a share-based compensation 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. Expected volatility is based on historical volatility
                                         of the stock. The Company utilizes historical data to estimate the expected option term
                                         for input into the valuation model. The risk-free rate for the expected term of the applicable
                                         option is based on the Government of Canada yield curve in effect at the time of the
                                         grant.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Actual results may differ materially from
those estimates based on these assumptions.



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.



11







Disclosure controls and procedures



Disclosure controls and procedures are
designed to provide reasonable assurance that information required to be disclosed by the Company under applicable securities
legislation is gathered and reported to senior management, including the Company’s CEO and CFO, on a timely basis so that
appropriate decisions can be made regarding public disclosure.



As of the end of the Company’s fiscal
year ended December 31, 2016, an evaluation of the effectiveness of the Company’s “disclosure controls and procedures”
(as such term is defined in Rules 13a -15(e) and 15d -15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)
and under National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109))
was carried out by the Company’s management with the participation of the CEO and CFO. Based upon that evaluation, the Company’s
CEO and CFO have concluded that as of the end of that fiscal year, the Company’s disclosure controls and procedures are
effective to ensure that information required to be disclosed by the Company in reports that it files or submits under applicable
U.S. and Canadian securities legislation is (i) recorded, processed, summarized and reported within the time periods specified
in such legislation and (ii) accumulated and communicated to the Company’s management, including its CEO and CFO, to allow
timely decisions regarding required disclosure.



The Company's management, including the
CEO and CFO, believe that any disclosure controls and procedures or internal control over financial reporting, no matter how well
conceived and operated, can provide only a reasonable and not absolute assurance that the objectives of the control system are
met. Further, the design of a control system reflects the fact that there are resource constraints, and the benefits of controls
must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute
assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent
limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more
people, or by unauthorized override of the control. The design of any systems of controls is also based in part on certain assumptions
about the likelihood of certain events, and there can be no assurance that any design can achieve its stated goals under all potential
future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error
or fraud may occur and not be detected.



Management’s Responsibility for the Financial Statements



The preparation and presentation of the
accompanying Consolidated Financial Statements, MD&A and all financial information in the financial statements are the responsibility
of management and have been approved by the Audit Committee of the Board of Directors. The Financial Statements have been prepared
in accordance with IFRS. Financial statements, by nature are not precise since they include amounts based upon estimates and judgments.
When alternative treatments exist, management has chosen those it deems to be the most appropriate in the circumstances. The financial
information presented elsewhere in the Financial Statements is consistent with that in the Consolidated Financial Statements.



Management, under the supervision of and
with the participation of the CEO and the CFO, have a process in place to evaluate disclosure controls and procedures and internal
control over financial reporting as required by Canadian securities regulations. The CEO and CFO will certify the annual filings
with the CSA as required in Canada by National Instrument 52-109. The Board of Directors is responsible for ensuring that management
fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving the Consolidated
Financial Statements. The Board carries out this responsibility principally through its Audit Committee which is independent from
management. The Audit Committee is appointed by the Board of Directors and reviews the Consolidated Financial Statements and MD&A;
considers the report of the external auditors; assesses the adequacy of management’s assessment over internal controls described
below; examines and approves the fees and expenses for the audit services; and recommends the independent auditors to the Board
for the appointment by the shareholders. The independent auditors have full and free access to the Audit Committee and meet with
it to discuss their audit work, our internal control over financial reporting and financial reporting matters. The Audit Committee
reports its findings to the Board of Directors for consideration when approving the Consolidated Financial Statements for issuance
to the shareholders and also Management’s Report on Internal Control over Financial Reporting. Management is responsible
for establishing and maintaining adequate internal control over financial reporting.



12







Management’s report on internal control over financial
reporting



Management is responsible for establishing
and maintaining adequate internal controls over financial reporting of the Company (as such term is defined in Rules 13a-15(f)
and 15d-15(f) of the Exchange Act and in NI 52-109). Internal controls over financial reporting are designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with United
States generally accepted accounting principles and the requirements of applicable U.S. and Canadian securities legislation. The
Company’s CEO and CFO have assessed the effectiveness of the Company’s internal controls over financial reporting
as at December 31, 2016 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)
in Internal Control – Integrated Framework (2013). Based on this assessment, the Company’s CEO and CFO have determined
that the Company’s internal controls over financial reporting are effective as of December 31, 2016 and will certify the
Company’s annual filings with the U.S. Securities and Exchange Commission on Form 40-F as required by the United States
Sarbanes-Oxley Act and with Canadian securities regulatory authorities.



Management reviewed the results of its
assessment with the Audit Committee of the Company’s Board of Directors.



Risks



The Company relies on equity financings
to fund its activities. While it has been successful in raising funds in the past, there is no guarantee that adequate funds will
be available in the future. The Company had cash and cash equivalents of $17.4 million and working capital of $17.1 million at
December 31, 2016. Based on current planned expenditures at its Caspiche project, management believes that the Company has sufficient
capital resources to fund planned levels of activity for at least the next 12 months.



The Company’s corporate head office
is in Vancouver, Canada and the Company maintains the majority of its funds in Canadian Dollars. Since the onset of the credit
crisis in 2008 there still exists significant fluctuation in the value of the Canadian dollar against other currencies and because
the Company operates in foreign countries it is exposed to significant currency risk. In addition, its operations may be affected
by rapid price fluctuation in the countries it operates in due to potential future country defaults.



The Company is subject to substantial
environmental requirements which could cause a restriction or suspension of certain operations. The current and anticipated future
operations and exploration activities of the Company in Chile require permits from various governmental authorities and such operations
and exploration activities are and will be governed by Federal, Provincial and local laws and regulations governing various elements
of the mining industry including, without limitation, land use, the protection of the environment, prospecting, development, production,
exports, taxes, labour standards, occupational health, waste disposal, toxic substances, and other matters. Given the stage of
the Company’s Caspiche project activities have caused little environmental impact to date. The Company conducts certain
environmental restoration efforts including drill rig platform clean-up and the sealing of drill holes among other clean-up activities
to rehabilitate areas affected by its operations and it is the Company’s intention to ensure that the environmental impact
on areas where it operates is mitigated by restoration and rehabilitation of affected areas.



Currently there is a shortage of water
in the northern part of Chile. Various initiatives are being pursued to address these constraints however there is no certainty
that adequate water or power resources can be secured for the Caspiche project in the near term.



The exploration and development of mineral
deposits involves significant risks which even with careful evaluation, experience and knowledge may not, in some cases, be fully
mitigated. The commercial viability of any mineral deposit depends on many factors, not all of which are within the control of
management. Some of the factors that affect the commercial viability of a given mineral deposit include its size, grade and proximity
to infrastructure, including availability of power and water. Government regulation, taxes, royalties, land tenure, land use,
environmental protection and reclamation and closure obligations all have an impact on the economic viability of a mineral deposit.
Other potential impacts could include the location of the mineral deposit and if it is found in remote or harsh climates. These
unique environments could limit or reduce production possibilities or if conditions are right for potential natural disasters,
including but not limited to volcanoes, earthquakes, tornados and other severe weather, could negatively impact facilities, equipment
and the safety of its workers dramatically.



13







The marketability of minerals is affected
by numerous factors beyond the control of the Company. These factors include, but are not limited to, market fluctuations, government
regulations relating to prices, taxes and royalties, allowable production, import, 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 profitability of all
future production and threaten the continuation of a particular project or operations altogether.



The Company has no production of minerals.
There is no assurance that a commercially viable mineral deposit exists on any of the Company’s properties, and substantial
additional work will be required in order to determine the presence of any such deposit.



The Company is required to make advance
royalty payments and perform certain other obligations to maintain its interest in Caspiche. In order to develop its Caspiche
project the Company will require additional water supply and access to surface land for infrastructure development.



The Company is required to make ongoing
annual payments to maintain the easement over surface rights at Caspiche. In addition the Company’s Chilean subsidiary,
Eton, has been served with a court claim challenging the Chilean Government’s grant of the Easement. The claim, filed before
the Santiago Civil Court, was filed by a private Chilean mineral exploration company, SCM Cerro del Medio. Under Chilean mining
law there are provisions which provide for securing necessary surface access for the development of mineral deposits. SCM Cerro
del Medio’s claim, sights “non-compliance by the Chilean Government of certain legal formalities required to approve
the easement” and “that the easement granted overlaps SCM Cerro del Medio’s Santa Cecilia project mining properties”.
A review of the claim by Eton’s Chilean legal counsel has concluded that SCM Cerro del Medio’s claim has no grounds
under Chilean law and should be rejected.



Risk factors are more fully described
in the Company’s current Annual Information Form, and subsequent filings with the Canadian Securities Administrators and
the SEC. You can review and obtain copies of our filings from SEDAR at www.sedar.com or from the SEC’s website at
http://www.sec.gov/edgar.shtml



NYSE MKT Corporate Governance



The Company’s common shares are
listed on the NYSE MKT. Section 110 of the NYSE MKT Company Guide permits the NYSE MKT to consider the laws, customs and practices
of foreign issuers in relaxing certain NYSE MKT listing criteria, and to grant exemptions from NYSE MKT listing criteria based
on these considerations. A description of the significant ways in which the Company’s governance practices differ from those
followed by domestic companies pursuant to NYSE MKT standards is set forth on the Company’s website at www.exeterresource.com.



In addition, the Company may from time-to-time
seek relief from NYSE MKT corporate governance requirements on specific transactions under Section 110 of the NYSE MKT Company
Guide by providing written certification from independent local counsel that the non-complying practice is not prohibited by our
home country law, in which case, the Company shall make the disclosure of such transactions available on its website at www.exeterresource.com.



Additional Information



Additional information regarding the Company,
including its current Annual Information Form is available on SEDAR at www.sedar.com.



14