----

|        | MAG SILVER CORP.Consolidated Financial Statements(expressed in thousands of US dollars) For the year ended December 31, 2016 Dated: March 29, 2017 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                    |

| VANCOUVER OFFICESuite 770800 W. Pender StreetVancouver, BC V6C 2V6 |  604 630 1399 phone866 630 1399 toll free604 681-0894 fax |   |   | TSX: MAGNYSE MKT: MAGwww.magsilver.cominfo@magsilver.com |
|--------------------------------------------------------------------|----------------------------------------------------------------|--------|--------|----------------------------------------------------------|

----

| i. | pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, the transactions and dispositions of assets of MAG; |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| ii. | provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with IFRS as issued by the IASB, and that MAG's receipts and expenditures are made only in accordance with authorizations of management and MAG's directors; and |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| iii. | provided reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of MAG's assets that could have a material effect on the Company's consolidated financial statements. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| */s/ "George Paspalas"* | */s/ "Larry Taddei"*    |
|-------------------------|-------------------------|
| George Paspalas         | Larry Taddei            |
| Chief Executive Officer | Chief Financial Officer |

----

----

----

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----

| MAG SILVER CORP.                                    |                                         |   |   |   |              |   |     |              |   |
|-----------------------------------------------------|----------------------------------------------|--------|--------|--------|-------------------|--------|----------|-------------------|--------|
| Consolidated Statements of Financial Position  |                                         |   |   |   |              |   |     |              |   |
|                                                |                                         |   |   |   |              |   |     |              |   |
| (In thousands of US dollars, except shares)         |                                         |   |   |   |              |   |     |              |   |
|                                                |                                         | Note   |   |   | December 31, 2016 |   |     | December 31, 2015 |   |
|                                                |                                         |   |   |   |              |   |     |              |   |
| ASSETS                                              |                                         |   |   |   |              |   |     |              |   |
|                                                |                                         |   |   |   |              |   |     |              |   |
| CURRENT                                             |                                         |   |   |   |              |   |     |              |   |
| Cash and cash equivalents                           |                                         |   | 3      |   |              | $      | 83,347   |              |   | $ | 75,424 |   |
| Term deposits                                       |                                         |   | 3      |   |              |   | 55,000   |              |   |   | - |   |
| Accounts receivable                                 |                                         |   | 4      |   |              |   | 628      |              |   |   | 327 |   |
| Investments                                         |                                         |   | 5      |   |              |   | 718      |              |   |   | 279 |   |
| Prepaid expenses                                    |                                         |   |   |   |              |   | 181      |              |   |   | 150 |   |
| TOTAL CURRENT ASSETS                                |                                         |   |   |   |              |   | 139,874  |              |   |   | 76,180 |   |
| EQUIPMENT                                           |                                         |   | 6      |   |              |   | 54       |              |   |   | 38 |   |
| INVESTMENT IN ASSOCIATE                             |                                         |   | 7      |   |              |   | 37,312   |              |   |   | 31,240 |   |
| EXPLORATION AND EVALUATION ASSETS                   |                                         |   | 8      |   |              |   | -        |              |   |   | 52,806 |   |
| TOTAL ASSETS                                        |                                         |   |   |   |              | $      | 177,240  |              |   | $ | 160,264 |   |
|                                                |                                         |   |   |   |              |   |     |              |   |   |   |   |
| LIABILITIES                                         |                                         |   |   |   |              |   |     |              |   |   |   |   |
|                                                |                                         |   |   |   |              |   |     |              |   |   |   |   |
| CURRENT                                             |                                         |   |   |   |              |   |     |              |   |   |   |   |
| Trade and other payables                            |                                         |   |   |   |              | $      | 733      |              |   | $ | 957 |   |
| COMMITMENTS                                         |                                         |   | 7,15   |   |              |   |     |              |   |   |   |   |
|                                                |                                         |   |   |   |              |   |     |              |   |   |   |   |
| DEFERRED INCOME TAXES                               |                                         |   | 16     |   |              |   | 589      |              |   |   | 5,165 |   |
|                                                |                                         |   |   |   |              |   |     |              |   |   |   |   |
| TOTAL LIABILITIES                                   |                                         |   |   |   |              |   | 1,322    |              |   |   | 6,122 |   |
|                                                |                                         |   |   |   |              |   |     |              |   |   |   |   |
| EQUITY                                              |                                         |   |   |   |              |   |     |              |   |   |   |   |
|                                                |                                         |   |   |   |              |   |     |              |   |   |   |   |
| Share capital                                       |                                         |   | 9      |   |              |   | 343,654  |              |   |   | 262,218 |   |
| Equity reserve                                      |                                         |   |   |   |              |   | 16,133   |              |   |   | 19,993 |   |
| Accumulated other comprehensive income              |                                         |   |   |   |              |   | 882      |              |   |   | 836 |   |
| Deficit                                             |                                         |   |   |   |              |   | (184,751 | )                 |   |   | (128,905 | ) |
| TOTAL EQUITY                                        |                                         |   |   |   |              |   | 175,918  |              |   |   | 154,142 |   |
| TOTAL LIABILITIES AND EQUITY                        |                                         |   |   |   |              | $      | 177,240  |              |   | $ | 160,264 |   |
|                                                |                                         |   |   |   |              |   |     |              |   |   |   |   |
| SUBSEQUENT EVENTS                                   |                                         |   | 17     |   |              |   |     |              |   |   |   |   |
|                                                |                                         |   |   |   |              |   |     |              |   |   |   |   |
| ON BEHALF OF THE BOARD (approved on March 27, 2017) |                                         |   |   |   |              |   |     |              |   |
|                                                |                                         |   |   |   |              |   |     |              |   |   |   |   |
| /s/ "Peter Barnes"                                  | /s/ "Jill Leversage"     |   |
| Peter Barnes, Director                              | Jill Leversage, Director                     |   |

----

| MAG SILVER CORP.                                               |   |   |   |   |                |   |       |   |   |
|----------------------------------------------------------------|--------|--------|--------|--------|---------------------|--------|------------|--------|--------|
| Consolidated Statements of Loss and Comprehensive Loss         |   |   |   |   |                |   |       |   |   |
| (In US dollars except for shares and per share amounts)        |   |   |   |   |                |   |       |   |   |
|                                                           |   |   |   |   |                |   |       |   |   |
|                                                           |   |   |   |   | For the years ended |   |
|                                                           |   |   |   |   | December 31         |   |
|                                                           |   | Note   |   |   | 2016                |   |       | 2015   |   |
| EXPENSES                                                       |   |   |   |   |                |   |       |   |   |
| Accounting and audit                                           |   |   |   |   | $                   | 615    |       |   | $      | 469 |   |
| Amortization                                                   |   |   | 6      |   |                |   | 23         |   |   |   | 16 |   |
| Filing and transfer agent fees                                 |   |   |   |   |                |   | 182        |   |   |   | 184 |   |
| Foreign exchange loss                                          |   |   |   |   |                |   | 36         |   |   |   | 2,135 |   |
| General office expenses                                        |   |   |   |   |                |   | 719        |   |   |   | 651 |   |
| Legal                                                          |   |   |   |   |                |   | 256        |   |   |   | 344 |   |
| Management compensation and consulting fees                    |   |   |   |   |                |   | 2,397      |   |   |   | 1,965 |   |
| Property investigation costs                                   |   |   |   |   |                |   | 257        |   |   |   | 217 |   |
| Impairment of exploration and evaluation assets                |   |   | 8      |   |                |   | 53,893     |   |   |   | - |   |
| Option to acquire mineral interest written off                 |   |   | 8      |   |                |   | -          |   |   |   | 4,292 |   |
| Share based payment expense                                    |   |   | 9b,c,d |        |                |   | 2,263      |   |   |   | 3,090 |   |
| Shareholder relations                                          |   |   |   |   |                |   | 515        |   |   |   | 526 |   |
| Travel                                                         |   |   |   |   |                |   | 250        |   |   |   | 289 |   |
|                                                           |   |   |   |   |                |   | 61,406     |   |   |   | 14,178 |   |
| INTEREST INCOME                                                |   |   |   |   |                |   | 1,115      |   |   |   | 289 |   |
| GAIN ON SALE OF AVAILABLE-FOR-SALE SECURITIES                  |   |   | 5      |   |                |   | 1,152      |   |   |   | - |   |
| GAIN ON WARRANTS (MARK-TO-MARKET)                              |   |   | 5      |   |                |   | 44         |   |   |   | - |   |
| IMPAIRMENT OF AVAILABLE-FOR-SALE SECURITIES                    |   |   | 5      |   |                |   | -          |   |   |   | (92 | ) |
| EQUITY PICK UP FROM ASSOCIATE                                  |   |   | 7      |   |                |   | (1,327     | )      |   |   | (1,366 | ) |
| LOSS FOR THE YEAR BEFORE INCOME TAX                            |   |   |   |   |                | $      | ( 60,422   | )      |   | $ | ( 15,347 | ) |
|                                                           |   |   |   |   |                |   |       |   |   |   |   |   |
| DEFERRED INCOME TAX RECOVERY (EXPENSE)                         |   |   | 16     |   |                |   | 4,576      |   |   |   | (1,482 | ) |
| LOSS FOR THE YEAR                                              |   |   |   |   |                | $      | ( 55,846   | )      |   | $ | ( 16,829 | ) |
|                                                           |   |   |   |   |                |   |       |   |   |   |   |   |
| OTHER COMPREHENSIVE INCOME (LOSS)                              |   |   |   |   |                |   |       |   |   |   |   |   |
| Items that may be reclassified subsequently to profit or loss: |   |   |   |   |                |   |       |   |   |   |   |   |
| UNREALIZED GAIN (LOSS) ON AVAILABLE-FOR-SALE                   |   |   |   |   |                |   |       |   |   |   |   |   |
| SECURITIES, NET OF TAXES                                       |   |   | 5      |   |                |   | 1,198      |   |   |   | (22 | ) |
| RECLASSIFICATION TO GAIN ON SALE                               |   |   |   |   |                |   |       |   |   |   |   |   |
| OF AVAILABLE-FOR-SALE SECURITIES                               |   |   | 5      |   |                |   | (1,152     | )      |   |   | - |   |
|                                                           |   |   |   |   |                |   | 46         |   |   |   | (22 | ) |
|                                                           |   |   |   |   |                |   |       |   |   |   |   |   |
| TOTAL COMPREHENSIVE INCOME (LOSS)                              |   |   |   |   |                | $      | ( 55,800   | )      |   | $ | ( 16,851 | ) |
|                                                           |   |   |   |   |                |   |       |   |   |   |   |   |
| BASIC AND DILUTED                                              |   |   |   |   |                |   |       |   |   |   |   |   |
| LOSS PER SHARE                                                 |   |   |   |   |                | $      | ( 0.71     | )      |   | $ | ( 0.24 | ) |
|                                                           |   |   |   |   |                |   |       |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER                                        |   |   |   |   |                |   |       |   |   |   |   |   |
| OF SHARES OUTSTANDING - BASIC AND DILUTED                      |   |   |   |   |                |   | 78,482,056 |   |   |   | 69,214,848 |   |

----

| MAG SILVER CORP.                        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Consolidated Statements of Changes in Equity                     |
| (In thousands of US dollars, except shares)                                                                                                                |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Unrealized |   |   | Accumulated |   |   |   |   |   |   |   |   |
|                                                                                                                                                       |   |   |   |   | Common shares |   |   |   |   |   | Currency |   |   | gain (loss) on |   |   | other |   |   |   |   |   |   |   |
|                                                                                                                                                       |   |   |   |   | without par value |   |   | Equity |   |   | translation |   |   | available-for-sale |   |   | comprehensive |   |   |   |   |   |   | Total |   |
|                                                                                                                                                       |   | Note |   |   | Shares |   |   | Amount |   |   | Reserve |   |   | adjustment |   |   | securities |   |   | income (loss) |   |   | Deficit |   |   | equity |   |
| Balance, January 1, 2015                                                                                                                                   |   |   |   |   |   | 68,860,536 |   |   | $ | 257,023 |   |   | $ | 19,486 |   |   | $ | 784 |   |   | $ | 74 |   |   | $ | 858 |   |   | $ | (112,076 | ) |   | $ | 165,291 |   |
| Stock options exercised                                                                                                                                    |   | 9a,b |  |   |   | 424,900 |   |   |   | 3,769 |   |   |   | (1,172 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,597 |   |
| Stock options exercised cashless                                                                                                                           |   | 9a,b |  |   |   | 121,150 |   |   |   | 1,418 |   |   |   | (1,418 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Restricted share units converted                                                                                                                           |   | 9a,c |  |   |   | 800 |   |   |   | 8 |   |   |   | (8 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Share based payment                                                                                                                                        |   | 9b,c,d |  |   |   | - |   |   |   | - |   |   |   | 3,105 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,105 |   |
|                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized loss on available-for-sale securities                                                                                                           |   | 5 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (22 | ) |   |   | (22 | ) |   |   | - |   |   |   | (22 | ) |
| Net loss                                                                                                                                                   |   |   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (16,829 | ) |   |   | (16,829 | ) |
| Total Comprehensive Loss                                                                                                                                   |   |   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (22 | ) |   |   | (22 | ) |   |   | (16,829 | ) |   |   | (16,851 | ) |
|                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2015                                                                                                                                 |   |   |   |   |   | 69,407,386 |   |   | $ | 262,218 |   |   | $ | 19,993 |   |   | $ | 784 |   |   | $ | 52 |   |   | $ | 836 |   |   | $ | (128,905 | ) |   | $ | 154,142 |   |
| Stock options exercised                                                                                                                                    |   | 9a,b |  |   |   | 691,705 |   |   |   | 6,632 |   |   |   | (1,973 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 4,659 |   |
| Stock options exercised cashless                                                                                                                           |   | 9a,b |  |   |   | 325,671 |   |   |   | 3,823 |   |   |   | (3,823 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Restricted and performance share units converted                                                                                                           |   | 9a,c |  |   |   | 38,692 |   |   |   | 327 |   |   |   | (327 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Share based payment                                                                                                                                        |   | 9b,c,d |  |   |   | - |   |   |   | - |   |   |   | 2,263 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,263 |   |
| Issued for cash                                                                                                                                            |   | 9a |  |   |   | 10,240,750 |   |   |   | 70,654 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 70,654 |   |
|                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized gain on available-for-sale securities                                                                                                           |   | 5 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,198 |   |   |   | 1,198 |   |   |   |   |   |   |   | 1,198 |   |
| Gain on sale of available-for-sale securities                                                                                                              |   | 5 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,152 | ) |   |   | (1,152 | ) |   |   |   |   |   |   | (1,152 | ) |
| Net loss                                                                                                                                                   |   |   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (55,846 | ) |   |   | (55,846 | ) |
| Total Comprehensive Loss                                                                                                                                   |   |   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 46 |   |   |   | 46 |   |   |   | (55,846 | ) |   |   | (55,800 | ) |
|                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2016                                                                                                                                 |   |   |   |   |   | 80,704,204 |   |   | $ | 343,654 |   |   | $ | 16,133 |   |   | $ | 784 |   |   | $ | 98 |   |   | $ | 882 |   |   | $ | (184,751 | ) |   | $ | 175,918 |   |

----

| MAG SILVER CORP.                                          |
|-----------------------------------------------------------|
| Consolidated Statements of Cash Flows                |
| (In thousands of US dollars, unless otherwise stated)     |   |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   | For the years ended |   |
|                                                      |   |   |   |   | December 31 |   |
|                                                      |   | Note |   |   | 2016 |   |   | 2015 |   |
|                                                      |   |   |   |   |   |   |   |   |   |
| OPERATING ACTIVITIES                                      |   |   |   |   |   |   |   |   |   |
| Loss for the year                                         |   |   |   |   | $ | (55,846 | ) |   | $ | (16,829 | ) |
| Items not involving cash:                                 |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                                              |   |   | 6 |   |   |   | 23 |   |   |   | 16 |   |
| Deferred income tax expense (recovery)                    |   |   | 16 |   |   |   | (4,576 | ) |   |   | 1,482 |   |
| Equity pick up from associate                             |   |   | 7 |   |   |   | 1,327 |   |   |   | 1,366 |   |
| Impairment of exploration and evaluation assets           |   |   | 8 |   |   |   | 53,893 |   |   |   | - |   |
| Gain on sale of available-for-sale securities             |   |   | 5 |   |   |   | (1,152 | ) |   |   | - |   |
| Gain on warrants (mark-to-market)                         |   |   | 5 |   |   |   | (44 | ) |   |   | - |   |
| Impairment of investment in available-for-sale securities |   |   | 5 |   |   |   | - |   |   |   | 92 |   |
| Option to acquire mineral interest written off            |   |   | 8 |   |   |   | - |   |   |   | 4,292 |   |
| Share based payment expense                               |   |   | 9b,c,d |  |   |   | 2,263 |   |   |   | 3,090 |   |
| Unrealized foreign exchange loss                          |   |   |   |   |   |   | 28 |   |   |   | 2,132 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Changes in operating assets and liabilities               |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts receivable                                       |   |   |   |   |   |   | (301 | ) |   |   | 257 |   |
| Prepaid expenses                                          |   |   |   |   |   |   | (31 | ) |   |   | 206 |   |
| Trade and other payables                                  |   |   |   |   |   |   | (24 | ) |   |   | 225 |   |
| Net cash used in operating activities                     |   |   |   |   |   |   | (4,440 | ) |   |   | (3,671 | ) |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| INVESTING ACTIVITIES                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenditures under Option to acquire Mineral interest     |   |   | 8 |   |   |   | - |   |   |   | (1,121 | ) |
| Exploration and evaluation expenditures                   |   |   | 8 |   |   |   | (1,323 | ) |   |   | (2,106 | ) |
| Investment in associate                                   |   |   | 7 |   |   |   | (7,363 | ) |   |   | (5,009 | ) |
| Net proceeds from sale of available-for-sale securities   |   |   | 5 |   |   |   | 1,369 |   |   |   | - |   |
| Purchase of equipment                                     |   |   | 6 |   |   |   | (39 | ) |   |   | (2 | ) |
| Investment in securities                                  |   |   | 5 |   |   |   | (566 | ) |   |   | (28 | ) |
| Purchase of term deposits                                 |   |   | 3 |   |   |   | (55,000 | ) |   |   | - |   |
| Net cash used in investing activities                     |   |   |   |   |   |   | (62,922 | ) |   |   | (8,266 | ) |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| FINANCING ACTIVITIES                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of common shares upon exercise of stock options  |   |   | 9 |   |   |   | 4,659 |   |   |   | 2,597 |   |
| Issuance of common shares, net of share issue costs       |   |   | 9 |   |   |   | 70,654 |   |   |   | - |   |
| Net cash from financing activities                        |   |   |   |   |   |   | 75,313 |   |   |   | 2,597 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| EFFECTS OF EXCHANGE RATE CHANGES ON CASH                  |   |   |   |   |   |   | (28 | ) |   |   | (1,516 | ) |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS          |   |   |   |   |   |   | 7,923 |   |   |   | (10,856 | ) |
| CASH, BEGINNING OF YEAR                                   |   |   |   |   |   |   | 75,424 |   |   |   | 86,280 |   |
| CASH AND CASH EQUIVALENTS, END OF YEAR                    |   |   |   |   |   | $ | 83,347 |   |   | $ | 75,424 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| TERM DEPOSITS (Maturities in excess of 90 days)           |   |   | 3 |   |   | $ | 55,000 |   |   | $ | - |   |

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|                      |   | Interest |   |   | December 31, |   |   | December 31, |   |
|---------------------------|--------|----------|--------|--------|--------------|--------|--------|--------------|--------|
|                      |   | Rate     |   |   | 2016         |   |   | 2015         |   |
| Cash at bank and on hand  |   |     | 0-1.95 | %      |         | $      | 33,347 |         |   | $ | 75,424 |   |
| Short-term deposit        |   |     | 0.99   | %      |         |   | 50,000 |         |   |   | - |   |
| Cash and cash equivalents |   |     |   |   |         | $      | 83,347 |         |   | $ | 75,424 |   |
|                      |   |     |   |   |         |   |   |         |   |   |   |   |
|                                               |   |     |   |   |         |   |   |         |   |   |   |   |
|----------------------------------------------------|--------|----------|--------|--------|--------------|--------|--------|--------------|--------|--------|--------|--------|
|                                               |   | Interest |   |   | December 31, |   |   | December 31, |   |
|                                               |   | Rate     |   |   |         | 2016   |   |         |   | 2015   |   |
| Term deposit with maturity of April  18, 2017 |   |     | 1.20   | %      |         | $      | 55,000 |         |   | $      | -      |   |

|                                        |   | December 31, |   |   | December 31, |   |
|---------------------------------------------|--------|--------------|--------|--------|--------------|--------|
|                                        |   | 2016         |   |   | 2015         |   |
| Goods and services tax ("GST") recoverable  |   | $            | 19     |   |         | $      | 21 |   |
| Mexican value added tax ("IVA") recoverable |   |         | 37     |   |         |   | 301 |   |
| Interest receivable                         |   |         | 572    |   |         |   | 5 |   |
|                                        |   | $            | 628    |   |         | $      | 327 |   |

----

|                                         |   | December 31, |   |   | December 31, |   |
|----------------------------------------------|--------|--------------|--------|--------|--------------|--------|
|                                         |   | 2016         |   |   | 2015         |   |
|                                         |   |         |   |   |         |   |
|                                         |   |         |   |   |         |   |
| Available-for-sale securities                |   | $            | 550    |   |         | $      | 279 |   |
| Fair value through profit or loss - warrants |   |         | 168    |   |         |   | - |   |
|                                         |   | $            | 718    |   |         | $      | 279 |   |

|                                             |   | December 31, |   |   | December 31, |   |
|--------------------------------------------------|--------|--------------|--------|--------|--------------|--------|
|                                             |   | 2016         |   |   | 2015         |   |
| Available-for-sale securities, beginning of year |   | $            | 279    |   |         | $      | 365 |   |
| Purchase of available-for-securities             |   |         | 442    |   |         |   | 28 |   |
| Unrealized gain for the year                     |   |         | 1,198  |   |         |   | (22 | ) |
| Impairment for the year                          |   |         | -      |   |         |   | (92 | ) |
| Sale of available-for-sale securities            |   |         | (1,369 | )      |         |   | - |   |
| Available-for-sale securities, end of year       |   | $            | 550    |   |         | $      | 279 |   |

----

| Cost                            |   | Computerequipment |   |   | Field & Officeequipment |   |   | Leaseholdimprovements |   |   | Total  |   |
|---------------------------------|--------|-------------------|--------|--------|-----------------------------|--------|--------|-----------------------|--------|--------|--------|--------|
| Balance January 1, 2015         |   | $                 | 252    |   |                        | $      | 161    |                  |   | $      | 7      |   |   | $ | 420 |   |
| Additions                       |   |              | -      |   |                        |   | 2      |                  |   |   | -      |   |   |   | 2 |   |
| Balance December 31, 2015       |   |              | 252    |   |                        |   | 163    |                  |   |   | 7      |   |   |   | 422 |   |
| Additions                       |   |              | 39     |   |                        |   | -      |                  |   |   | -      |   |   |   | 39 |   |
| Balance, December 31, 2016      |   | $                 | 291    |   |                        | $      | 163    |                  |   | $      | 7      |   |   | $ | 461 |   |
|                            |   |              |   |   |                        |   |   |                  |   |   |   |   |   |   |   |   |
|                            |   |              |   |   |                        |   |   |                  |   |   |   |   |   |   |   |   |
| Accumulated depreciation        |   | Computerequipment |   |   | Field & Officeequipment |   |   | Leaseholdimprovements |   |   | Total  |   |
| Balance as at January 1, 2015   |   | $                 | 215    |   |                        | $      | 146    |                  |   | $      | 7      |   |   | $ | 368 |   |
| Amortization                    |   |              | 11     |   |                        |   | 5      |                  |   |   | -      |   |   |   | 16 |   |
| Balance as at December 31, 2015 |   |              | 226    |   |                        |   | 151    |                  |   |   | 7      |   |   |   | 384 |   |
| Amortization                    |   |              | 19     |   |                        |   | 4      |                  |   |   | -      |   |   |   | 23 |   |
| Balance, December 31, 2016      |   | $                 | 245    |   |                        | $      | 155    |                  |   | $      | 7      |   |   | $ | 407 |   |
|                            |   |              |   |   |                        |   |   |                  |   |   |   |   |   |   |   |   |
| Carrying amounts                |   | Computerequipment |   |   | Field & Officeequipment |   |   | Leaseholdimprovements |   |   | Total  |   |
| At December 31, 2015            |   | $                 | 26     |   |                        | $      | 12     |                  |   | $      | -      |   |   | $ | 38 |   |
| At December 31, 2016            |   | $                 | 46     |   |                        | $      | 8      |                  |   | $      | -      |   |   | $ | 54 |   |

----

|                                                                                           |   | December 31, |   |   | December 31, |   |
|------------------------------------------------------------------------------------------------|--------|--------------|--------|--------|--------------|--------|
|                                                                                           |   | 2016         |   |   | 2015         |   |
| Joint venture oversight expenditures incurred 100% by MAG                                      |   | $            | 262    |   |         | $      | 212 |   |
| Cash contributions to Minera Juanicipio (1)                                                    |   |         | 7,137  |   |         |   | 4,796 |   |
| Total for the current year                                                                     |   |         | 7,399  |   |         |   | 5,008 |   |
| Equity pick up of current loss for the year (2)                                                |   |         | (1,327 | )      |         |   | (1,366 | ) |
| Balance, beginning of year                                                                     |   |         | 31,240 |   |         |   | 27,598 |   |
| Balance, end of year                                                                           |   | $            | 37,312 |   |         | $      | 31,240 |   |
|                                                                                           |   |         |   |   |         |   |   |   |
| (1) Represents the Company's 44% share of Minera Juanicipio cash contributions for the year.   |   |
| (2) Represents the Company's 44% share of Minera Juanicipio's loss for the year, as determined |   |
|     by the Company.                                                        |   |         |   |   |         |   |   |   |

----

|                                                                 |   | December 31, |   |   | December 31, |   |
|----------------------------------------------------------------------|--------|--------------|--------|--------|--------------|--------|
|                                                                 |   | 2016         |   |   | 2015         |   |
|                                                                 |   |         |   |   |         |   |
| Cash                                                                 |   | $            | 3,573  |   |         | $      | 377 |   |
| IVA and other receivables                                            |   |         | 842    |   |         |   | 4,442 |   |
| Prepaids                                                             |   |         | -      |   |         |   | 18 |   |
| Total current assets                                                 |   |         | 4,415  |   |         |   | 4,837 |   |
| Minerals, surface rights, exploration & development expenditures |   |         | 82,017 |   |         |   | 67,513 |   |
| Total assets                                                         |   | $            | 86,432 |   |         | $      | 72,350 |   |
|                                                                 |   |         |   |   |         |   |   |   |
| Payables to Peñoles and other vendors                           |   | $            | 348    |   |         | $      | 1,262 |   |
| Total current liabilities                                            |   |         | 348    |   |         |   | 1,262 |   |
| Provision for reclamation and remediation costs                      |   |         | 313    |   |         |   | 360 |   |
| Deferred income tax liability                                        |   |         | 7,926  |   |         |   | 5,793 |   |
| Total liabilities & equity                                       |   |         | 8,587  |   |         |   | 7,415 |   |
| Shareholders' equity                                                 |   |         | 77,845 |   |         |   | 64,935 |   |
| Total liabilities & equity                                       |   | $            | 86,432 |   |         | $      | 72,350 |   |
|                                                                 |   |         |   |   |         |   |   |   |
|                                                                 |   | December 31, |   |   | December 31, |   |
|                                                                 |   |         | 2016   |   |         |   | 2015 |   |
|                                                                 |   |         |   |   |         |   |   |   |
| Deferred income tax expense                                          |   | $            | 2,134  |   |         | $      | 2,403 |   |
| Exchange Loss                                                        |   |         | 881    |   |         |   | 702 |   |
|                                                                 |   |         |   |   |         |   |   |   |
| Net loss                                                             |   | $            | 3,015  |   |         | $      | 3,105 |   |
|                                                                 |   |         |   |   |         |   |   |   |
| MAG's 44% equity pick up                                             |   | $            | 1,327  |   |         | $      | 1,366 |   |

----

|                                                            | US$                          |
|-----------------------------------------------------------------|------------------------------|
|                                                            | Year ended December 31, 2016 |
|                                                            |                         | Cinco de |   |   |   |   |   |   |   |
|                                                            |                         | Mayo (a) |   |   | Guigui (b) |   |   | Total |   |
| Exploration and evaluation assets                               |                         |   |   |   |   |   |   |   |   |
|    Camp costs, travel & transport            |                         | $ | 88 |   |   | $ | 3 |   |   | $ | 91 |   |
|    Geological & geophysical                  |                         |   | 39 |   |   |   | 28 |   |   |   | 67 |   |
|    Land taxes and gov't fees                     |                         |   | 253 |   |   |   | 83 |   |   |   | 336 |   |
|    Legal, community and other consultation costs |                         |   | 590 |   |   |   | 3 |   |   |   | 593 |   |
| Total for the period                                            |                         |   | 970 |   |   |   | 117 |   |   |   | 1,087 |   |
| Balance, January 1, 2016                                        |                         |   | 48,859 |   |   |   | 3,947 |   |   |   | 52,806 |   |
| Less: Impairment                                                |                         |   | (49,829 | ) |   |   | (4,064 | ) |   |   | (53,893 | ) |
| Balance, December 31, 2016                                      |                         | $ | - |   |   | $ | - |   |   | $ | - |   |

|                                                              | US$                          |
|-------------------------------------------------------------------|------------------------------|
|                                                              | Year ended December 31, 2015 |
|                                                              |                         | Cinco de |   |   |   |   |   |   |   |
|                                                              |                         | Mayo (a) |   |   | Guigui (b) |   |   | Total |   |
| Exploration and evaluation assets                                 |                         |   |   |   |   |   |   |   |   |
| Acquisition costs of mineral & surface rights                 |                         | $ | 123 |   |   | $ | 34 |   |   | $ | 157 |   |
|    Camp costs, travel & transport              |                         |   | 167 |   |   |   | 81 |   |   |   | 248 |   |
|    Drilling & drilling preparation             |                         |   | - |   |   |   | 365 |   |   |   | 365 |   |
|    Geochemical & metallurgical                 |                         |   | - |   |   |   | 35 |   |   |   | 35 |   |
|    Geological & geophysical                    |                         |   | 54 |   |   |   | 159 |   |   |   | 213 |   |
|    Land taxes and gov't fees                       |                         |   | 266 |   |   |   | 97 |   |   |   | 363 |   |
|    Legal, community & other consultation costs |                         |   | 921 |   |   |   | 23 |   |   |   | 944 |   |
| Total for the year                                                |                         |   | 1,531 |   |   |   | 794 |   |   |   | 2,325 |   |
| Balance January 1, 2015                                           |                         |   | 47,328 |   |   |   | 3,153 |   |   |   | 50,481 |   |
| Balance, December 31, 2015                                        |                         | $ | 48,859 |   |   | $ | 3,947 |   |   | $ | 52,806 |   |

----

----

----

|                                   |   |         |       |   | Weighted       |   |   |         |   |   | Weighted       |   |
|----------------------------------------|--------|--------------|------------|--------|----------------|--------|--------|--------------|--------|--------|----------------|--------|
|                                   |   | Year ended   |       |   | average        |   |   | Year ended   |   |   | average        |   |
|                                   |   | December 31, |       |   | exercise price |   |   | December 31, |   |   | exercise price |   |
|                                   |   | 2016         |       |   | (C$/option)    |   |   | 2015         |   |   | (C$/option)    |   |
|                                   |   |         |       |   |           |   |   |         |   |   |           |   |
| Balance outstanding, January 1, 2016   |   |         | 3,843,105  |   |           | $      | 8.71   |         |   |   | 4,361,540      |   |   | $ | 8.47 |   |
| Granted                                |   |         | 227,773    |   |           |   | 17.55  |         |   |   | 701,250        |   |   |   | 9.48 |   |
| Expired                                |   |         | -          |   |           |   | -      |         |   |   | (290,000       | )      |   |   | 10.02 |   |
| Exercised for cash                     |   |         | (691,705   | )      |           |   | 8.79   |         |   |   | (424,900       | )      |   |   | 7.64 |   |
| Exercised cashless                     |   |         | (1,125,001 | )      |           | $      | 10.46  |         |   |   | (504,785       | )      |   |   | 7.86 |   |
|                                   |   |         |       |   |           |   |   |         |   |   |           |   |   |   |   |   |
| Balance outstanding, December 31, 2016 |   |         | 2,254,172  |   |           | $      | 8.71   |         |   |   | 3,843,105      |   |   | $ | 8.71 |   |

|                    | December 31, | December 31, |
|-------------------------|--------------|--------------|
|                    | 2016         | 2015         |
|                    |         |         |
| Risk-free interest rate | 0.94%        | 0.80%        |
| Expected volatility     | 54%          | 54%          |
| Expected dividend yield | nil          | nil          |
| Expected life (years)   | 3            | 3            |

----

|                                    | Exercise price                                                                  |                                                            | Number                                                                                     |                                          | Number                                                                                                  |                                                                                                                                                                                                 | Weighted average remaining                                                                                                                                                                           |
|-----------------------------------------|---------------------------------------------------------------------------------|-----------------------------------------------------------------|--------------------------------------------------------------------------------------------|-----------------------------------------------|---------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                    | ($C/option)                                                                     |                                                            | outstanding                                                                                |                                          | exercisable                                                                                             |                                                                                                                                                                                                 |     contractual life (years)                                                                                                                                                     |
|       (1) | 5.35                                                                            |                                                            |             500,000            |                                          |         500,000                                                 |                                                                                                                                                                                                 |                                 1.79 |
|                                    | 5.86                                                                            |                                                            |             455,000            |                                          |         455,000                                                 |                                                                                                                                                                                                 |                                 1.46 |
|                                    | 9.15                                                                            |                                                            |             135,000            |                                          |         135,000                                                 |                                                                                                                                                                                                 |                                 0.59 |
|                                    | 9.16                                                                            |                                                            |               21,666 |                                          |                  - |                                                                                                                                                                                                 |                                 3.70 |
|                                    | 9.28                                                                            |                                                            |             384,733            |                                          |         264,733                                                 |                                                                                                                                                                                                 |                                 3.93 |
|       (1) | 9.61                                                                            |                                                            |               75,000 |                                          |           75,000                                      |                                                                                                                                                                                                 |                                 1.17 |
|                                    | 10.02                                                                           |                                                            |             187,500            |                                          |         133,333                                                 |                                                                                                                                                                                                 |                                 3.48 |
|                                    | 10.04                                                                           |                                                            |             267,500            |                                          |         267,500                                                 |                                                                                                                                                                                                 |                                 2.50 |
|                                    | 17.55                                                                           |                                                            |             227,773            |                                          |                  - |                                                                                                                                                                                                 |                                 4.93 |
|                                    | C$5.35 - C$17.55                                                                |          2,254,172 |                                                                                       |       1,830,566 |                                                                                                    |                                 2.56 |
|                                    |                                                                            |                                                            |                                                                                       |                                          |                                                                                                    |                                                                                                                                                                                                 |                                                                                                                                                                                                 |
|       (1) | Inducement options issued outside the Company's Plan as an incentive to attract |
|                                    | senior officers for employment.                                                 |                                                            |                                                                                       |                                          |

----

----

|                                     |   | December 31, |     |   | December 31, |   |
|------------------------------------------|--------|--------------|----------|--------|--------------|--------|
|                                     |   | 2016         |     |   | 2015         |   |
| Equity                                   |   | $            | 175,918  |   |         | $      | 154,142 |   |
| Cash, cash equivalents and term deposits |   |         | (138,347 | )      |         |   | (75,424 | ) |
|                                     |   | $            | 37,571   |   |         | $      | 78,718 |   |

----

|                             |   | December 31, |    |   | December 31, |   |
|----------------------------------|--------|--------------|---------|--------|--------------|--------|
|                             |   | 2016         |    |   | 2015         |   |
| Cash and cash equivalents        |   | $            | 83,347  |   |         | $      | 75,424 |   |
| Term deposits                    |   |         | 55,000  |   |         |   | - |   |
| Accounts receivable (see Note 4) |   |         | 628     |   |         |   | 327 |   |
|                             |   | $            | 138,975 |   |         | $      | 75,751 |   |

----

| December 31, 2016 (in 000's of US$ equivalent) |   | Mexican peso |   |   | Canadian dollar |   |
|------------------------------------------------|--------|--------------|--------|--------|-----------------|--------|
|                                           |   |         |   |   |            |   |
| Cash                                           |   | $            | 44     |   |            | $      | 7,681 |   |
| Accounts receivable                            |   |         | 37     |   |            |   | 26 |   |
| Prepaid                                        |   |         | 5      |   |            |   | - |   |
| Investments                                    |   |         | -      |   |            |   | 718 |   |
| Accounts payable                               |   |         | (137   | )      |            |   | (395 | ) |
| Net assets exposure (US$ equivalent)           |   | $            | (51    | )      |            | $      | 8,030 |   |
|                                           |   |         |   |   |            |   |   |   |
|                                           |   |         |   |   |            |   |   |   |
| December 31, 2015 (in 000's of US$ equivalent) |   | Mexican peso |   |   | Canadian dollar |   |
|                                           |   |         |   |   |            |   |   |   |
| Cash                                           |   | $            | 54     |   |            | $      | 6,338 |   |
| Accounts receivable                            |   |         | 301    |   |            |   | 25 |   |
| Prepaid                                        |   |         | 9      |   |            |   | - |   |
| Marketable securities                          |   |         | -      |   |            |   | 279 |   |
| Option to acquire mineral interest             |   |         | -      |   |            |   | - |   |
| Accounts payable                               |   |         | (185   | )      |            |   | (321 | ) |
| Net assets exposure (US$ equivalent)           |   | $            | 179    |   |            | $      | 6,321 |   |

----

----

|                          | Year ended December 31, 2016 |
|-------------------------------|------------------------------|
|                          |                         | FVTPL |   |   | Available forsale |   |   | Loans andreceivables |   |   | Otherliabilities |   |   | Total |   |
| Financial assets              |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents     |                         | $ | 83,347 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 83,347 |   |
| Term deposits                 |                         |   | - |   |   |   | - |   |   |   | 55,000 |   |   |   | - |   |   |   | 55,000 |   |
| Accounts receivables (Note 4) |                         |   | - |   |   |   | - |   |   |   | 628 |   |   |   | - |   |   |   | 628 |   |
| Investments (Note 5)          |                         |   | 168 |   |   |   | 550 |   |   |   | - |   |   |   | - |   |   |   | 718 |   |
| Financial liabilities         |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trade and other payables      |                         |   | - |   |   |   | - |   |   |   | - |   |   |   | 733 |   |   |   | 733 |   |
|                          |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          | Year ended December 31, 2015 |
|                          |                         | FVTPL |   |   | Available forsale |   |   | Loans andreceivables |   |   | Otherliabilities |   |   | Total |   |
| Financial assets              |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                          |                         | $ | 75,424 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 75,424 |   |
| Accounts receivables (Note 4) |                         |   | - |   |   |   | - |   |   |   | 327 |   |   |   | - |   |   |   | 327 |   |
| Investments (Note 5)          |                         |   | - |   |   |   | 279 |   |   |   | - |   |   |   | - |   |   |   | 279 |   |
| Financial liabilities         |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trade and other payables      |                         |   | - |   |   |   | - |   |   |   | - |   |   |   | 957 |   |   |   | 957 |   |
|                          |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                              | Year ended December 31, 2016 |
|-----------------------------------|------------------------------|
|                              |                         | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   |   |   |   |   | Total |   |
| Cash and cash equivalents         |                         | $ | 83,347 |   |   | $ | - |   |   | $ | - |   |   |   |   |   |   | $ | 83,347 |   |
| Term deposits                     |                         |   | 55,000 |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | 55,000 |   |
| Investments (Note 5)(1)           |                         |   | 15 |   |   |   | 703 |   |   |   | - |   |   |   |   |   |   |   | 718 |   |
|                              |                         | $ | 138,362 |   |   | $ | 703 |   |   | $ | - |   |   |   |   |   |   | $ | 139,065 |   |
|                              |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                              |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                              | Year ended December 31, 2015 |
|                              |                         | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   |   |   |   |   | Total |   |
| Cash                              |                         | $ | 75,424 |   |   |   | - |   |   |   | - |   |   |   |   |   |   | $ | 75,424 |   |
| Marketable securities (Note 5)(1) |                         |   | 279 |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | 279 |   |
|                              |                         | $ | 75,703 |   |   | $ | - |   |   | $ | - |   |   |   |   |   |   | $ | 75,703 |   |

----

| During the period, the Company incurred expenses with Cascabel and IMDEX as follows: |   |
|--------------------------------------------------------------------------------------|--------|
|                                                                                 |   |   |   |   |   |   |
|                                                                                 |   | Year ended Dec 31, |   |
|                                                                                 |   | 2016 |   |   | 2015 |   |
|                                                                                 |   |   |   |   |   |   |
| Fees related to Dr. Megaw:                                                           |   |   |   |   |   |   |
| Exploration and marketing services                                                   |   | $ | 346 |   |   | $ | 398 |   |
| Travel and expenses                                                                  |   |   | 59 |   |   |   | 112 |   |
| Other fees to Cascabel and IMDEX:                                                    |   |   |   |   |   |   |   |   |
| Administration for Mexican subsidiaries                                              |   |   | 121 |   |   |   | 121 |   |
| Field exploration services                                                           |   |   | 565 |   |   |   | 1,002 |   |
|                                                                                 |   | $ | 1,091 |   |   | $ | 1,633 |   |

----

| Significant subsidiaries of the Company are as follows: |                     |               |                    |
|---------------------------------------------------------|--------------------------|--------------------|-------------------------|
|                                                    |                     |               | MAG' effective interest |
| Name                                                    | Country of Incorporation | Principal Activity | 2016 (%)                | 2015 (%) |
| Minera Los Lagartos, S.A. de C.V.                       | Mexico                   | Exploration        | 100%                    | 100% |
| Minera Pozo Seco S.A. de C.V.                           | Mexico                   | Exploration        | 100%                    | 100% |
| Minera Sierra Vieja S.A. de C.V.                        | Mexico                   | Exploration        | 100%                    | 100% |

----

| During the period, compensation of key management personnel (including directors) was as follows: |   |
|---------------------------------------------------------------------------------------------------|--------|
|                                                                                              |   |   |   |   |   |   |
|                                                                                              |   | Year ended December 31, |   |
|                                                                                              |   | 2016 |   |   | 2015 |   |
| Salaries and other short term employee benefits                                                   |   | $ | 1,412 |   |   | $ | 1,438 |   |
| Share based payments (Note 9(b), (c ), and (d))                                                   |   |   | 1,507 |   |   |   | 1,751 |   |
|                                                                                              |   | $ | 2,919 |   |   | $ | 3,189 |   |

|   |   | Office Lease |   |
|--------|--------|--------------|--------|
|   |   |         |   |
|   |   |         |   |
| 2017   |   |         | 129    |   |
| 2018   |   |         | 132    |   |
| 2019   |   |         | 135    |   |
|   |   | $            | 396    |   |

----

|                                      |   | December 31 |   |   | December 31 |   |
|-------------------------------------------|--------|-------------|--------|--------|-------------|--------|
|                                      |   | 2016        |   |   | 2015        |   |
| Current tax  recovery (expense)      |   | $           | -      |   |        | $      | - |   |
| Deferred tax recovery (expense)           |   |        | 4,576  |   |        |   | (1,482 | ) |
| Total income tax (expense)  recovery |   | $           | 4,576  |   |        | $      | (1,482 | ) |

|                                                      |   | December 31 |    |   | December 31 |   |
|-----------------------------------------------------------|--------|-------------|---------|--------|-------------|--------|
|                                                      |   | 2016        |    |   | 2015        |   |
|                                                      |   |        |    |   |        |   |
| Loss for the year before income taxes                     |   | $           | (60,422 | )      |        | $      | (15,347 | ) |
| Statutory tax rate                                        |   |        | 26.00   | %      |        |   | 26.00 | % |
|                                                      |   |        |    |   |        |   |   |   |
| Recovery of income taxes computed at statutory rates      |   | $           | 15,710  |   |        | $      | 3,990 |   |
| Share based payments                                      |   |        | (588    | )      |        |   | (803 | ) |
| Mexican inflationary adjustments                          |   |        | 1,156   |   |        |   | (638 | ) |
| Higher effective tax rate on loss in foreign jurisdiction |   |        | 2,279   |   |        |   | 118 |   |
| Unrecognized deferred tax assets                          |   |        | (12,054 | )      |        |   | 4,441 |   |
| Mexican income tax impact of mining royalty in Mexico     |   |        | (1,105  | )      |        |   | - |   |
| Impact of foreign exchange and other                      |   |        | (4,504  | )      |        |   | (8,590 | ) |
| Impact of 7.5% mining royalty in Mexico                   |   |        | 3,682   |   |        |   | - |   |
| Total income tax (expense)  recovery                 |   | $           | 4,576   |   |        | $      | (1,482 | ) |

----

|                                                                                                                  |   | December 31 |   | December 31 |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|-------------|--------|
|                                                                                                                  |   | 2016   |   | 2015        |   |
|                                                                                                                  |   |        |   |        |   |   |
| Tax Losses - deferred tax assets                                                                                      |   |        | 2,753  |        |   |   | 8,491 |   |
| Excess of tax value of exploration and evaluation assets and                                                          |   |        |   |        |   |
| investment in associate over book values                                                                              |   |        | 1,558  |        |   |   | 2,202 |   |
| Unrealized foreign exchange                                                                                           |   |        | (1,467 | )           |   |   | (1,907 | ) |
| Investments                                                                                                           |   |        | (21    | )           |   |   | - |   |
| Excess of book value of exploration and evaluation assets                                                             |   |        |   |        |   |
| and investment in associate over tax values                                                                           |   |        | (3,412 | )           |   |   | (13,951 | ) |
| Net deferred tax liability                                                                                            |   |        | (589   | )           |   |   | (5,165 | ) |
|                                                                                                                  |   |        |   |        |   |   |   |   |
|                                                                                                                  |   |        |   |        |   |   |   |   |
| The Company's movement of net deferred tax liabilities is described below:                                            |   |
|                                                                                                                  |   | December 31 |   | December 31 |   |
|                                                                                                                  |   |        | 2016   |        |   |   | 2015 |   |
| At January 1                                                                                                          |   | $           | (5,165 | )           |   | $ | (3,683 | ) |
| Deferred income tax recovery (expense)                                                                                |   |        | 4,576  |        |   |   | (1,482 | ) |
| At December 31                                                                                                        |   | $           | (589   | )           |   | $ | (5,165 | ) |
|                                                                                                                  |   |        |   |        |   |   |   |   |
|                                                                                                                  |   |        |   |        |   |   |   |   |
| The Company has the following deductible temporary differences for which no deferred tax assets have been recognized: |   |
|                                                                                                                  |   |        |   |        |   |   |   |   |
|                                                                                                                  |   |        | 2016   |        |   |   | 2015 |   |
| Tax losses and tax values in excess of book values                                                                    |   | $           | 52,924 |        |   | $ | 34,302 |   |
| Excess of tax value of exploration and evaluation assets                                                              |   |        |   |        |   |
| over book values                                                                                                      |   |        | 23,432 |        |   |   | 4,846 |   |
| Financing fees                                                                                                        |   |        | 4,857  |        |   |   | 2,612 |   |
| Cumulative eligible capital                                                                                           |   |        | 388    |        |   |   | 405 |   |
| Other                                                                                                                 |   |        | 762    |        |   |   | 504 |   |
|                                                                                                                  |   |        |   |        |   |   |   |   |
| Total                                                                                                                 |   | $           | 82,363 |        |   | $ | 42,669 |   |

----

| 1. | Issued 12,400 common shares pursuant to the exercise of stock options with an exercise price of C$9.28 for proceeds of C$115; and, |
|----|------------------------------------------------------------------------------------------------------------------------------------|

| 2. | Issued 39,239 common shares pursuant to the exercise of 75,000 stock options with an exercise price of C$9.15 exercised under a less dilutive cashless exercise provision of the plan, whereby 39,239 shares were issued in settlement of the stock options, and the remaining 35,761 options were cancelled. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|        | MAG SILVER CORP. Management's Discussion & AnalysisFor the year ended December 31, 2016  |
|--------|--------------------------------------------------------------------------------------------------------|
|   | Dated:  March 29, 2017                                                                       |

| VANCOUVER OFFICESuite 770800 W. Pender StreetVancouver, BC V6C 2V6 |  604 630 1399 phone866 630 1399 toll free604 681-0894 fax |   |   | TSX: MAGNYSE MKT: MAGwww.magsilver.cominfo@magsilver.com |
|--------------------------------------------------------------------|----------------------------------------------------------------|--------|--------|----------------------------------------------------------|

----

----

----

----

| ✓ | At Juanicipio, as a result of the significant mineralized discoveries beneath the Bonanza zone, Fresnillo plc and the Company have been considering alternate mine plans and other project enhancements to maximize the value of both the Bonanza Zone and the new Deep Zone. Considerations include increasing the processing plant nameplate capacity from 2,650 tonnes per day to 4,000 tonnes per day and sinking an internal shaft (or winze) to access the deeper zone sooner. |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ✓ | Fresnillo has indicated that permitting based on the upgraded design has already commenced, and that they expect their Board to give formal project approval in the second quarter 2017.  For MAG, a new resource estimate and these design upgrades are planned to be incorporated into a revised mine plan and a new MAG technical report for the project, expected to be completed in the second quarter of 2017 concurrent with the project approval. |
|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ✓ | Drilling to further delineate the extent of the new Valdecañas Deep Zone was ongoing throughout the year, and assays released during the year (see Press Release August 15, 2016) and subsequent to year end (see Press Release February 14, 2017).  The results from these drilling campaigns have: |
|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | confirmed that continuous mineralization extends below the Valdecañas Bonanza Grade mineralization in both the East and West Veins; |
|---------|------------------------------------------------------------------------------------------------------------------------------------------|

| • | revealed a substantial widening of this deeper mineralization into a well-defined dilatant zone; and, |
|---------|-------------------------------------------------------------------------------------------------------|

| • | resulted in the discovery of the new "Anticipada Vein", within the vein system. |
|---------|---------------------------------------------------------------------------------|

| ✓ | A 20,000 metre 2017 exploration drill program for Minera Juanicipio is expected to be approved at the next Technical Committee Meeting. |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------|

| ✓ | Advancement of the underground ramp decline at the Juanicipio Property continues to progress at rates exceeding those envisioned in the Juanicipio Technical Report, with the ramp having reached the uppermost reaches of the Valdecañas Vein in December 2016 and footwall development has commenced. |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ✓ | In March 2016, the Company closed a $65,006 bought deal financing along with a fully exercised over-allotment option (additional gross proceeds of $9,751), for total gross proceeds of $74,757. |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ✓ | The Company remains well funded, with cash, cash equivalents, and term deposits totaling $138,347 as at December 31, 2016. |
|----------|----------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

|                                                      |   | Year ended December 31, |   |
|-----------------------------------------------------------|--------|-------------------------|--------|
| (In thousands of US dollars)                              |   | 2016                    |   |   | 2015 |   |
| Joint venture oversight expenditures incurred 100% by MAG |   | $                       | 262    |   |   | $ | 212 |   |
| Cash contributions to Minera Juanicipio                   |   |                    | 7,137  |   |   |   | 4,796 |   |
| Total for the current year                                |   |                    | 7,399  |   |   |   | 5,008 |   |
| Equity pick up of current loss for the year               |   |                    | (1,327 | ) |   |   | (1,366 | ) |
| Balance, beginning of year                                |   |                    | 31,240 |   |   |   | 27,598 |   |
| Balance, end of year                                      |   | $                       | 37,312 |   |   | $ | 31,240 |   |

| For the year ended                                              |   | December 31, 2016 |    |   |   |   |   |   |   |   | Dec 31, 2015 |   |
|-----------------------------------------------------------------|--------|-------------------|---------|--------|--------|--------|--------|--------|--------|--------|--------------|--------|
| (In thousands of US dollars)                                    |   | Cinco de mayo     |    |   | Guigui |   |   | Total  |   |   | Total        |   |
| Exploration and evaluation assets                               |   |              |    |   |   |   |   |   |   |   |         |   |
| Acquisition costs of mineral & surface rights               |   | $                 | -       |   |   | $      | -      |   |   | $      | -            |   |   | $ | 157 |   |
|    Camp costs, travel & transport            |   |              | 88      |   |   |   | 3      |   |   |   | 91           |   |   |   | 248 |   |
|    Drilling & drilling preparation           |   |              | -       |   |   |   | -      |   |   |   | -            |   |   |   | 365 |   |
|    Geological, geochemical & geophysical     |   |              | 39      |   |   |   | 28     |   |   |   | 67           |   |   |   | 248 |   |
|    Land taxes and gov't fees                     |   |              | 253     |   |   |   | 83     |   |   |   | 336          |   |   |   | 363 |   |
|    Legal, community and other consultation costs |   |              | 590     |   |   |   | 3      |   |   |   | 593          |   |   |   | 944 |   |
| Total for the year                                              |   |              | 970     |   |   |   | 117    |   |   |   | 1,087        |   |   |   | 2,325 |   |
| Balance, January 1, 2016                                        |   |              | 48,859  |   |   |   | 3,947  |   |   |   | 52,806       |   |   |   | 50,481 |   |
| Less: Impairment                                                |   |              | (49,829 | )      |   |   | (4,064 | )      |   |   | (53,893      | )      |   |   | - |   |
| Balance, December 31, 2016                                      |   | $                 | -       |   |   | $      | -      |   |   | $      | -            |   |   | $ | 52,806 |   |

----

|  8. | SELECTED ANNUAL INFORMATION |
|----------|-----------------------------|

----

|                     |   | Year endedDec. 31, 2016 |    |   | Year endedDec. 31, 2015 |    |    | Year endedDec. 31, 2014 |   |
|--------------------------|--------|-------------------------|---------|--------|-------------------------|---------|---------|-------------------------|--------|
| Revenues(1)         |   | $                       | 1,115   |   |                    | $       | 289     |                    |   | $ | 238 |   |
| Net Loss(2)         |   | $                  | (55,846 | )      |                    | $  | (16,829 | )                       |   | $  | (16,133 | ) |
| Net Loss per Share  |   | $                  | (0.71   | )      |                    | $  | (0.24   | )                       |   | $  | (0.25 | ) |
| Total Assets(3)     |   | $                       | 177,240 |   |                    | $       | 160,264 |                    |   | $ | 169,523 |   |
| Long Term Debt      |   | Nil                     |    |   | Nil                     |    |    | Nil                     |   |
| Dividends(4)        |   | Nil                     |    |   | Nil                     |    |    | Nil                     |   |

|  | (1) | The Company's only source of revenue during the years ending December 31, 2014 to 2016 was interest income from term deposits and cash deposits in high interest savings accounts held by the Company.  The amount of interest earned correlates directly to the amount of cash on hand during the year referenced and prevailing interest rates. The Company does not have any operating revenues. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | The Company's normal course of business is to explore and evaluate its mineral properties as appropriate. The loss variation above reflects, amongst other things, the periodic impairment of exploration and evaluation assets (a non-cash charge), share based payment expense (a non-cash charge), and fluctuations in activity levels. The current year's net loss includes a $53,893 impairment of exploration and evaluation assets (see "Review of Financial Results" below) compared to a $4,292 write off of an option to acquire a mineral property in 2015, and $6,418 impairment of exploration and evaluation assets in 2014. The current year's net loss also includes share based payment expense of $2,263 compared to $3,090 and $3,502 in 2015 and 2014 respectively. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3) | Included in 'Total Assets' at the end of 2016, the Company held $138,347 in cash, cash equivalents and term deposits, compared to $75,424 at December 31, 2015 and $86,280 at December 31, 2014. In the year ended December 31, 2016 the Company closed a bought deal financing for total gross proceeds of $74,757; no financings were completed in the year ended December 31, 2015, and in the year ended December 31, 2014 the Company closed a bought deal financing for total gross proceeds of $80,017.  Included in 'Total Assets' at the end of 2016, the Company had nil exploration and evaluation assets compared to $52,806 at December 31, 2015 and $50,480 at December 31, 2014. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (4) | The Company has not declared or paid dividends on its common shares, and has no intent on paying dividends in the near future, as it anticipates that all available funds will be used to finance the operations and growth of its business. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 9. | REVIEW OF FINANCIAL RESULTS |
|----|-----------------------------|

|                                            |   | Year ended December 31, |     |
|-------------------------------------------------|--------|-------------------------|----------|
|                                            |   | 2016                    |     |   | 2015 |   |
| EXPENSES                                        |   |                    |     |   |   |   |
| Accounting and audit                            |   | $                       | 615      |   |   | $ | 469 |   |
| Amortization                                    |   |                    | 23       |   |   |   | 16 |   |
| Filing and transfer agent fees                  |   |                    | 182      |   |   |   | 184 |   |
| Foreign exchange loss                           |   |                    | 36       |   |   |   | 2,135 |   |
| General office expenses                         |   |                    | 719      |   |   |   | 651 |   |
| Legal                                           |   |                    | 256      |   |   |   | 344 |   |
| Management compensation and consulting fees     |   |                    | 2,397    |   |   |   | 1,965 |   |
| Property investigation costs                    |   |                    | 257      |   |   |   | 217 |   |
| Impairment of exploration and evaluation assets |   |                    | 53,893   |   |   |   | - |   |
| Option to acquire mineral interest written off  |   |                    | -        |   |   |   | 4,292 |   |
| Share based payment expense                     |   |                    | 2,263    |   |   |   | 3,090 |   |
| Shareholder relations                           |   |                    | 515      |   |   |   | 526 |   |
| Travel                                          |   |                    | 250      |   |   |   | 289 |   |
|                                            |   |                    | 61,406   |   |   |   | 14,178 |   |
| Interest income                                 |   |                    | 1,115    |   |   |   | 289 |   |
| Gain on sale of available-for-sale securities   |   |                    | 1,152    |   |   |   | - |   |
| Gain on warrants (mark-to-market)               |   |                    | 44       |   |   |   | - |   |
| Impairment of available-for-sale securities     |   |                    | -        |   |   |   | (92 | ) |
| Equity pick up from associate                   |   |                    | (1,327   | ) |   |   | (1,366 | ) |
| Loss for the year before income taxes           |   | $                       | ( 60,422 | ) |   | $ | ( 15,347 | ) |
|                                            |   |                    |     |   |   |   |   |   |
| Deferred income tax recovery (expense)          |   |                    | 4,576    |   |   |   | (1,482 | ) |
| Loss for the year                               |   | $                       | ( 55,846 | ) |   | $ | ( 16,829 | ) |

----

----

|                                                                |   | Year ended December 31, |     |
|---------------------------------------------------------------------|--------|-------------------------|----------|
| In thousands of US dollars                                          |   | 2016                    |     |   | 2015 |   |
| Loss for the year                                                   |   | $                       | ( 55,846 | ) |   | $ | ( 16,829 | ) |
|                                                                |   |                    |     |   |   |   |   |   |
| OTHER COMPREHENSIVE INCOME (LOSS)                                   |   |                    |     |   |   |   |   |   |
| Items that may be reclassified subsequently to profit or loss:      |   |                    |     |   |   |   |   |   |
| Unrealized gain (loss) on available-for-sale securities, net of tax |   |                    | 1,198    |   |   |   | (22 | ) |
| Reclassification to gain on sale of available-for-sale securities   |   |                    | (1,152   | ) |   |   | - |   |
|                                                                |   |                    |     |   |   |   |   |   |
| Total comprehensive income (loss)                                   |   | $                       | ( 55,800 | ) |   | $ | ( 16,851 | ) |

| Quarter Ending           |   | Revenue(1) |   |   | Net Loss(2) |   |    | Net Loss per Share |   |
|--------------------------|--------|------------|--------|--------|-------------|--------|---------|--------------------|--------|
| December 31, 2016   |   | $          | 351    |   |        | $      | (50,337 | )             |   | $ | (0.62 | ) |
| September 30, 2016  |   | $          | 348    |   |        | $      | (1,985  | )                  |   | $ | (0.02 | ) |
| June 30, 2016       |   | $          | 303    |   |        | $      | (2,227  | )                  |   | $ | (0.03 | ) |
| March 31, 2016      |   | $          | 113    |   |        | $      | (1,297  | )                  |   | $ | (0.02 | ) |
| December 31, 2015   |   | $          | 64     |   |        | $      | (10,169 | )                  |   | $ | (0.15 | ) |
| September 30, 2015  |   | $          | 66     |   |        | $      | (1,988  | )                  |   | $ | (0.03 | ) |
| June 30, 2015       |   | $          | 68     |   |        | $      | (2,136  | )                  |   | $ | (0.03 | ) |
| March 31, 2015      |   | $          | 92     |   |        | $      | (2,536  | )                  |   | $ | (0.04 | ) |

|  | (1) | The Company's only source of revenue during the quarters listed above was interest earned on bank cash, cash equivalent and term deposit balances.  The amount of interest revenue earned correlates directly to the amount of cash and term deposits on hand during the period referenced and prevailing interest rates. At this time, the Company has no operating revenues. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | Net losses by quarter are often materially affected by the timing and recognition of large non-cash expenses (specifically share based payments, exploration and evaluation property impairments, and deferred tax expense) as described in "Review of Financial Results" above. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                          |   | Year ended December 31, |    |
|---------------------------------------------------------------|--------|-------------------------|---------|
| (In thousands of US dollars)                                  |   | 2016                    |    |   | 2015 |   |
|                                                          |   |                    |    |   |   |   |
| Operations                                                    |   | $                       | (4,084  | ) |   | $ | (4,359 | ) |
| Changes in non-cash working capital                           |   |                    | (356    | ) |   |   | 688 |   |
| Operating activities                                          |   |                    | (4,440  | ) |   |   | (3,671 | ) |
|                                                          |   |                    |    |   |   |   |   |   |
| Investing activities                                          |   |                    | (62,922 | ) |   |   | (8,266 | ) |
| Financing activities                                          |   |                    | 75,313  |   |   |   | 2,597 |   |
|                                                          |   |                    |    |   |   |   |   |   |
| Change in cash and cash equivalents during the year           |   |                    | 7,951   |   |   |   | (9,340 | ) |
|                                                          |   |                    |    |   |   |   |   |   |
| Effects of exchange rate changes on cash and cash equivalents |   |                    | (28     | ) |   |   | (1,516 | ) |
|                                                          |   |                    |    |   |   |   |   |   |
| Cash, beginning of year                                       |   |                    | 75,424  |   |   |   | 86,280 |   |
| Cash and cash equivalents, end of year                        |   | $                       | 83,347  |   |   | $ | 75,424 |   |
| Term deposits, end of year                                    |   | $                       | 55,000  |   |   | $ | - |   |

----

| (In thousands of US dollars)      |   | December 31, 2016 |    |   | December 31, 2015 |   |
|-----------------------------------|--------|-------------------|---------|--------|-------------------|--------|
|                              |   |              |    |   |              |   |
| Cash and cash equivalents         |   | $                 | 83,347  |   |              | $      | 75,424 |   |
| Term deposits                     |   |              | 55,000  |   |              |   | - |   |
| Other current assets              |   |              | 1,527   |   |              |   | 756 |   |
| Total current assets              |   |              | 139,874 |   |              |   | 76,180 |   |
| Equipment                         |   |              | 54      |   |              |   | 38 |   |
| Investment in associate           |   |              | 37,312  |   |              |   | 31,240 |   |
| Exploration and evaluation assets |   |              | -       |   |              |   | 52,806 |   |
| Total assets                      |   | $                 | 177,240 |   |              | $      | 160,264 |   |
|                              |   |              |    |   |              |   |   |   |
| Total current liabilities         |   | $                 | 733     |   |              | $      | 957 |   |
| Deferred income taxes             |   |              | 589     |   |              |   | 5,165 |   |
| Total liabilities                 |   |              | 1,322   |   |              |   | 6,122 |   |
| Total equity                      |   |              | 175,918 |   |              |   | 154,142 |   |
| Total liabilities and equity      |   | $                 | 177,240 |   |              | $      | 160,264 |   |

----

**14.**

----

| Intended Use of Proceeds                            | Expected Use of Proceeds July 9, 2014 | Estimated Actual Use of Net Proceeds to date (1) | Expected Use of Proceeds February 23, 2016 | Estimated Actual Use of Net Proceeds to date |
|-----------------------------------------------------|---------------------------------------|--------------------------------------------------|--------------------------------------------|----------------------------------------------|
|                                                | (000s of $C)                          | (000s of $C)                                     | (000s of $US)                              | (000s of $US)                                |
| Exploration expenditures at the Juanicipio Property | $3,000                                | $3,350 (2)                                       | $5,000                                     | $1,903                                       |
| Development expenditures at the Juanicipio Property | $71,470                               | $19,024 (3)                                      | $50,000                                    | $  - (3)                                |
| Development contingency at the Juanicipio Property  | $  -                             | $  -                                        | $7,500                                     | $  -                                    |

----

|                                                                                       |   | Total  |   |   | Less than 1 year |   |   | 1-3 Years |   |   | 3-5 Years |   |
|--------------------------------------------------------------------------------------------|--------|--------|--------|--------|------------------|--------|--------|-----------|--------|--------|-----------|--------|
| Property Option Payments,  Exploration and Development Expenditures – Total (1) |   | $      | -      |   |             | $      | -      |      |   | $      | -         |   |   | $ | - |   |
|                                                                                       |   |   |   |   |             |   |   |      |   |   |      |   |   |   |   |   |
| Office Lease                                                                               |   |   | 363    |   |             |   | 129    |      |   |   | 234       |   |   |   | - |   |
| Total Obligations                                                                          |   | $      | 363    |   |             | $      | 129    |      |   | $      | 234       |   |   | $ | - |   |

|                                | Number of   | Exercise Price or | Remaining        |
|-------------------------------------|-------------|-------------------|------------------|
|                                | Shares      | Conversion Ratio  | Life             |
| Capital Stock                       | 80,755,843  |              |             |
| Stock Options                       | 2,166,772   | $5.35 - $17.55    | 0.4 to 4.7 years |
| Performance Share Units("PSUs") (1) | 140,203 (1) | 1:1               | 3.7 to 4.7 years |
| Restricted Share Units("RSUs")      | 46,520      | 1:1               | 2.3 to 3.2 years |
| Deferred Share Units ("DSUs")       | 373,305     | 1:1               | n/a (2)          |
| Fully Diluted                       | 83,482,643  |              |             |

----

----

----

| During the period, the Company incurred expenses with Cascabel and IMDEX as follows: |   |
|--------------------------------------------------------------------------------------|--------|
|                                                                                 |   |   |   |   |   |   |
|                                                                                 |   | Year ended Dec 31, |   |
|                                                                                 |   | 2016 |   |   | 2015 |   |
|                                                                                 |   |   |   |   |   |   |
| Fees related to Dr. Megaw:                                                           |   |   |   |   |   |   |
| Exploration and marketing services                                                   |   | $ | 346 |   |   | $ | 398 |   |
| Travel and expenses                                                                  |   |   | 59 |   |   |   | 112 |   |
| Other fees to Cascabel and IMDEX:                                                    |   |   |   |   |   |   |   |   |
| Administration for Mexican subsidiaries                                              |   |   | 121 |   |   |   | 121 |   |
| Field exploration services                                                           |   |   | 565 |   |   |   | 1,002 |   |
|                                                                                 |   | $ | 1,091 |   |   | $ | 1,633 |   |

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| Significant subsidiaries of the Company are as follows: |                     |               |                    |
|---------------------------------------------------------|--------------------------|--------------------|-------------------------|
|                                                    |                     |               | MAG' effective interest |
| Name                                                    | Country of Incorporation | Principal Activity | 2016 (%)                | 2015 (%) |
|                                                    |                     |               |                    |   |
| Minera Los Lagartos, S.A. de C.V.                       | Mexico                   | Exploration        | 100%                    | 100% |
| Minera Pozo Seco S.A. de C.V.                           | Mexico                   | Exploration        | 100%                    | 100% |
| Minera Sierra Vieja S.A. de C.V.                        | Mexico                   | Exploration        | 100%                    | 100% |

|                                            |   |                    |   |   |   |   |
|-------------------------------------------------|--------|-------------------------|--------|--------|--------|--------|
|                                            |   | Year ended December 31, |   |
|                                            |   | 2016                    |   |   | 2015   |   |
| Salaries and other short term employee benefits |   | $                       | 1,412  |   |   | $      | 1,438 |   |
| Share based payments (Note 9(b), (c ), and (d)) |   |                    | 1,507  |   |   |   | 1,751 |   |
|                                            |   | $                       | 2,919  |   |   | $      | 3,189 |   |

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| 1. | Issued 12,400 common shares pursuant to the exercise of stock options with an exercise price of C$9.28 for proceeds of C$115; and, |
|----|------------------------------------------------------------------------------------------------------------------------------------|

| 2. | Issued 39,239 common shares pursuant to the exercise of 75,000 stock options with an exercise price of C$9.15 exercised under a less dilutive cashless exercise provision of the plan, whereby 39,239 shares were issued in settlement of the stock options, and the remaining 35,761 options were cancelled. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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