---

| | Managements Discussion and Analysis for Year Ended December
31, 2013
| | ---------------------------------------------------------------------

INTRODUCTION

This Management’s Discussion & Analysis (“MD&A”) of Tahoe Resources Inc. and its subsidiaries (“Tahoe” or the “Company”) has been prepared to enable a reader to assess material changes in financial condition and results of operations for the year ended December 31, 2013, with comparison to 2012. The following discussion of performance, financial condition, and future prospects should be read in conjunction with the audited consolidated financial statements for the years ended December 31, 2013 and 2012, prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, effective as of December 31, 2013. The information provided herein supplements, but does not form part of, the consolidated financial statements. This discussion covers the year ended December 31, 2013 and the subsequent period up to the date of this MD&A.  All dollar amounts are stated in thousands of United States dollars (“US$”) unless otherwise indicated. Information for this MD&A is as at March 12, 2014, unless otherwise indicated.

BUSINESS OVERVIEW

Tahoe was incorporated on November 10, 2009 under the laws of the Province of British Columbia and its principal objective is to profitably operate the Escobal Mine, a mining operation located in southeastern Guatemala containing high-grade silver, gold, lead, and zinc mineralization (“Escobal Mine”).

Developing the Escobal Mine into a profitable silver mining operation will depend upon Tahoe’s ability to consistently mine to design parameters and to process mined material at approximate design throughput rates.  The Company’s only commercial operation is the Escobal Mine.

Tahoe is engaging in ongoing exploration drilling programs, engineering design, and the Escobal Mine operations.  In addition, the Company is focused on exploration and a review of prospective mineral acquisitions in the Americas for mining of precious metals.

HIGHLIGHTS OF 2013

|OPERATIONAL
|-----------

- Commercial production was reached in January 2014 as the mine is now
  operating as intended by management. Peak daily production prior to December
  31, 2013 was 3,060 tonnes through the mill.
- The Company continued to advance underground development, mill and
  infrastructure construction and exploration throughout 2013.
- Commissioning of the primary crushing & secondary and tertiary
  crushing facility commenced during the second quarter 2013.
- Wet commissioning of the mill and initial production of concentrates began
  at the end of the third quarter 2013.
- The first precious metal bearing concentrate shipment was made October 15,
  2013.

Management Discussion and Analysis for the Year Ended December
31, 2013

---

|BUSINESS AND
      POLITICAL
|----------------------------

- The Escobal exploitation license was received from Guatemalas Ministry of
  Energy and Mines (MEM) on April 3, 2013. The exploitation license was the
  final material permit required for milling operations at the project. The
  permit has a 25 year term with an extension for a second 25 year term upon
  application.
- On April 16, 2013, the Company executed a voluntary royalty agreement (“Escobal Royalty Agreement”).  Together with the Guatemalan mining law, the Escobal Royalty Agreement commits the Company to pay a 5% Net Smelter Revenue (“NSR”) royalty on the concentrates sold from the Escobal Mine production.   Under the Escobal Royalty Agreement two percent will benefit San Rafael communities, two percent will benefit the Federal government and an additional voluntary one percent will benefit certain outlying municipalities in Santa Rosa and Jalapa.
- On June 4, 2013, the Company successfully closed and drew down a $50 million secured credit facility with a leading international lender to provide additional liquidity and financial flexibility through startup activities into production.  In January 2014, the facility was expanded and an additional $25 million was drawn to ensure adequate liquidity until full production is reached.
- In an effort to promote consensus in Congress and to advance support for
  new mining legislation in Guatemala, the President proposed to Congress in
  July 2013 that it approve a two-year moratorium on the granting of new mining
  licenses. The government assured the Company that this action in no way
  affects the Escobal exploitation license or the Companys existing exploration
  licenses. The Company has slowed its regional exploration activities in
  response to the Presidents proposal. Congress has taken no action on the
  Presidents plan.
- In July 2013 MEM appealed a lower court ruling that MEM prematurely issued
  the exploitation license before hearing a written opposition to the Escobal
  exploitation license application. The Constitutional Court is expected to rule
  on the matter in the next several months. The validity of the license is not
  in question.

Tahoe Resources Inc.

---

OPERATIONS AND EXPLORATION

|OPERATIONS
|----------

During 2013, the Company primarily focused on operational
efforts, advancing underground development, completing mill construction,
building surface and ancillary facilities, plant commissioning and government
relations.

|1. | Underground Development, Construction and
      Operations                                                                                                                                                                                                                                                                                                                                                                                 
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | The Company continued to advance construction activities
      throughout the year, including underground development, mill construction,
      and development of surface and ancillary facilities in preparation for
      mill commissioning, which commenced in September.                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | At December 31, 2013, access to approximately 262,000
      tonnes of mill feed was fully developed underground and an additional
      64,000 tonnes were stored on the surface stockpile. Primary development
      was completed for approximately five years of mill feed at the designed
      rate of 3500 tpd.                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2. | Project Status and Timeline                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Crusher commissioning commenced in June 2013 followed by
      mill commissioning in September. Commissioning activities continued
      through the end of the year. Commercial production was achieved in January
      2014. The Board has approved the Companys plan to continue to expand
      production at Escobal to 4500 tonnes per day. Work on the expansion began
      in 2012 and is expected to be fully complete by 2016.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3. | Operations                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | During 2013, the Escobal Mine produced approximately 220,000 tonnes of metal-bearing material, of which approximately 159,000 tonnes were processed through the mill.  Mine and stockpile grades were consistent with the resource model.                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Due to social unrest during the last half of 2012 and
      first two quarters of 2013, completion of construction was delayed by
      approximately three months. The mill start-up commenced in late September
      and commissioning advanced rapidly during the fourth quarter.                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Mill throughput averaged 1,088 tpd in October, 1,849 tpd
      in November and 2,258 tpd in December. The highest single day throughput
      at the mill prior to year end was 3,060 tonnes on December 26. Throughput,
      recoveries and product quality improved steadily as the ramp up of
      operations continued through year end.                                                                                             

Commercial production was achieved when management determined
the facilities were operating as intended, by meeting the following criteria:

- Mine production rates were sufficient to feed mill operations.
- Average throughput at the mill was in excess of 70% of capacity (2,450
  tpd) for 30 days which was achieved January 13, 2014.
- Recovery of metal exceeded 80% of target or expected rates.
- Both lead and zinc concentrate were being produced  achieved late October
  2013.
- Concentrate grades consistently exceeded 90% of the minimum expected
  specification.
- Tailings filtration exceeded 70% of target tonnage over a reasonable
  period of time.

Management Discussion and Analysis for the Year Ended December
31, 2013

---

Mill performance continued to show consistent improvement through the fourth quarter and into 2014. Paste plant commissioning was completed in December when the first underground stope was available for backfilling. Commissioning of the mill has
been completed and a plan to further optimize the paste plant system is under way.

Concentrate produced during plant commissioning and ramp up totaled 2,138 tonnes of silver-lead concentrate and 1,807 tonnes of silver-zinc concentrate, containing 2.0 million ounces of silver, 1,900 ounces of gold, 863 tonnes of lead and 1,221
tonnes of zinc.

During 2013 commissioning, 2,723 tonnes of concentrate containing approximately 1.4 million ounces of payable silver were shipped and sold to third parties.  Revenue generated from the concentrate sales of $28.0 million was offset by $18.7 million of production costs (including royalties). The net ($9.3 million) was offset against mineral property, land, plant and equipment in accordance with the Company’s accounting policy, as commercial production had not yet commenced.

|4. | Government Activities and Community Relations
|-- | ---------------------------------------------
|   |                                              
|   | a.                                           
|   |                                              
|   |                                              
|   | b.                                           
|   |                                              
|   |                                              
|   | c.                                           
|   |                                              
|   |                                              
|   |                                              

Tahoe Resources Inc.

---

| | d. | Appeal before the Constitutional
  Court                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | On July 23, 2013, a Court of Appeals in Guatemala held that MEM
should have conducted a hearing of a written opposition to the Escobal
exploitation license during the permitting application process. The court did
not rule on the substance or validity of the license; it merely stated that MEM
was obligated to hold an administrative hearing addressing the substance of the
opposition under the 1997 Mining Law. The Court did not invalidate or comment on
the Escobal exploitation license in its decision. MEM issued a press release on
July 24, 2013 stating that the ruling had no impact on the status of Escobals
exploitation license. MEM and the company have appealed the lower courts
decision to the Constitutional Court. If the Constitutional Court upholds the
Court of Appeals decision, MEM will have to hear the opposition which it
already stated it believes to be without merit. A public hearing of the appeal
was held in November. The Constitutional Court is expected to issue a ruling in
the case sometime in the next several months.

|5. | Credit Facility
|-- | ---------------

The Company entered into and drew down a $50 million credit
facility on June 4, 2013 with a major international lender. The proceeds have
provided additional working capital and supported general corporate purposes
during mine and mill commissioning. The credit facility bears interest at a rate
per annum of the US$ London Interbank Offered Rate (LIBOR) plus 6% per
annum.

On December 20, 2013, the Company reached an agreement with the
lender to expand its credit facility by an additional $25 million. The $25
million bears interest at a rate per annum of the US$ LIBOR plus 7.25% . The
additional funds, when drawn, will have maturity date of September 3, 2014. The
maturity date of the original $50 million was also extended to September 3,
2014. As at December 31, 2013 the Company had not drawn on the expanded
facility.

On January 2, 2014, the Company drew the additional $25 million
dollars to ensure adequate working capital and to support general corporate
purposes.

The credit facility is secured by the assets of the Company and
its subsidiaries: Tahoe Swiss AG, Escobal Resources Holding Limited and Minera
San Rafael, S.A.

Additionally, the credit facility contains covenants that,
among other things, restrict the ability of the Company and its subsidiaries to
incur additional debt, merge, consolidate, transfer, lease or otherwise dispose
of all or substantially all its of its assets to any other person.

|2014 OPERATIONS
      OUTLOOK
|-----------------------------

The Company provided guidance regarding expected 2014 production and unit cost in its November 12, 2013 press release.  Production during 2014 is still anticipated between 18 and 21 million ounces of silver in concentrate.  Production will be weighted more to the second half of the year and, as a result, unit costs may be higher during the first half.  Unit costs per ounce of silver for the year are expected to be within the guidance provided.

Management Discussion and Analysis for the Year Ended December
31, 2013

---

|EXPLORATION
|-----------

All identified mineral resources for the Escobal Mine are located on the Oasis concession, which along with three other exploration concessions comprise the project area. The 2013 drilling program continued to laterally explore extensions of the deposit and to improve confidence in the mineral resource through in-fill drilling.  Between two and four drills concentrated on exploration drilling at the Escobal Mine throughout the year.

The Escobal Mine mineral resource occurs in a mineralized zone that is referred to as the “Escobal vein”. Exploration to date has defined the Escobal vein through drill core analyses from drilling campaigns carried out between 2007 and 2013. As at December 31, 2013, a total of 431 exploration holes (181,502 metres) have targeted the Escobal vein system. In addition, 21 drill holes totaling 4,942 metres were completed for the purpose of collecting metallurgical test samples. All drilling in the Escobal vein has utilized diamond drill core methods, with the majority of mineralized intercepts drilled using NQ or larger size drill core. Project core recovery averages greater than 96%.

During the fourth quarter of 2013 a total of nineteen holes for a total of 8,965 metres were drilled at the Escobal Mine.  Mineralization in the project area is now recognized over a 3,000 metre strike length and 2,000 metre vertical range.  Exploration expenditures for the year ended December 31, 2013 totaled $5.3 million.

While exploration in 2013 focused on definition of Escobal vein extensions and enhancement to the existing resource, concentrated effort was devoted to in-fill and stope definition drilling with underground drills within the mine.

In addition to the Escobal vein, twelve veins have been discovered on the Company’s concessions.  These prospective areas continue to be evaluated; however, a number of these veins occur on concessions that have not yet been granted or are in areas that are unfriendly to mining.  There is no assurance that concessions will be granted which would allow the Company to extend exploration activities.  Given the proposed moratorium and unwillingness of MEM to issue new licenses at this time, regional exploration efforts outside of our four approved licenses have been temporarily suspended.

|SUBSEQUENT EVENTS
|-----------------

|1. | Credit Facility Expansion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company drew an additional $25 million on January 2, 2014.  (See the Operations and Exploration section “5 Credit Facility” of this MD&A for further information about the credit facility)                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2. | Commercial Production                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In anticipation of mill and plant commissioning during the fourth quarter, management identified criteria to determine when the mine was operating as intended by management, thereby achieving commercial production.  On January 14, 2014, the Company announced that as of January 13, 2014, the operation had met all of the established criteria, that commercial production had commenced and that the mine was now operating as intended based on the following achievements.  Refer to Operations section 3 for a discussion of the Company’s commercial production criteria.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The January 1 through 13 activity will be immaterial to the 2014 financial statements.  As a result, effective January 1, 2014, the Company ceased capitalizing operating costs, began recognizing revenue and reporting results of operations.                                                                                                                                                                                                                                                                                                                                      

Tahoe Resources Inc.

---

RISK FACTORS

Tahoe’s ability to generate revenues and achieve a return on shareholders’ investment must be considered in light of the early production stage of the Escobal Mine and sustainability of operations.  The Company is subject to many of the risks common to startup enterprises, including dependence on one project, operating in a country that at times has experienced political and social unrest and anti-mining resistance, among other destabilizing factors.

|DEPENDENCE ON THE ESCOBAL MINE
|------------------------------

With only one property in production, any adverse development affecting the Escobal Mine could have a material adverse effect upon the Company and would materially and adversely affect the production of mineral resources, profitability, financial performance and results of operations of the Company.

|OPERATIONS IN
      GUATEMALA
|-----------------------------

The Escobal Mine is located in Guatemala which has a history of political unrest. Guatemala suffered an armed conflict for 36 years, which was finally resolved through a peace agreement reached with the country’s internal revolutionary movement in 1996. The last political crisis in Guatemala occurred in 1983 and a constitutional government was restored in 1985. Continued political unrest or a political crisis in Guatemala could adversely affect the Company’s business and results of operations.

The Companys business may be exposed to a number of risks and
uncertainties, including terrorism and hostage taking, military repression,
expropriation or nationalization without adequate compensation, illegal mining,
labour or social unrest, high rates of inflation, changes to royalty and tax
regimes, extreme fluctuations in currency exchange rates, volatile local,
political and economic developments, government corruption, difficulty
understanding and complying with an unpredictable regulatory and legal framework
respecting the ownership and maintenance of mineral properties, renegotiation or
nullification of existing concessions, licenses, permits and contracts, surface
rights, mining permits, mines and mining operations, and difficulty obtaining
key personnel, equipment and components for equipment.

|ANTI-MINING
      RESISTANCE
|----------------------------

Some communities and non-governmental organizations (“NGOs”) have been vocal and active with respect to mining and exploration activities in Guatemala. These communities and NGOs have taken such actions as road closures, power line opposition, work stoppages, and law suits for damages. These actions relate not only to current activities but often in respect to decades old mining activities by prior owners of mining properties. Such actions by communities and NGOs may have a material adverse effect on our operations at the Escobal Mine, on the transport of concentrate from Escobal to the port, on exploration activities in the region and on the Company’s financial position, cash flow and results of operations.

|PRODUCTION
      DECISION
|-------------------------

The Company has not based its production decision on a
feasibility study of mineral reserves demonstrating economic and technical
viability, and, as a result, there may be an increased uncertainty of achieving
any particular level of recovery of minerals or the cost of such recovery,
including increased risks associated with developing a commercially mineable
deposit. Historically, such projects have a much higher risk of economic and
technical failure. There is no guarantee that anticipated production levels and
costs will be achieved. Failure to achieve the anticipated production levels
would have a material adverse impact on the Companys cash flow and future
profitability.

Management Discussion and Analysis for the Year Ended December
31, 2013

---

Factors that influence the Companys ability to succeed are
more fully described in the Companys 2013 Annual Information Form available on
www.sedar.com under the heading Description of Our Business  Risk Factors.

SELECTED FINANCIAL INFORMATION

|BASIS OF
      PRESENTATION
|---------------------------

The financial statements and the annual and quarterly results
presented in the table below are prepared in accordance with IFRS. The Companys
significant accounting policies are outlined within Note 2 of the Companys
audited consolidated financial statements for the years ended December 31, 2013
and 2012. The Company has chosen to expense all exploration and evaluation costs
except those costs associated with mineral property acquisition, surface rights
purchases, major equipment, buildings, and accrued reclamation, all of which are
capitalized. Underground project development costs have been expensed through
March 31, 2013 prior to receipt of the exploitation permit, and subsequently
capitalized. These accounting policies have been followed consistently
throughout the year ended December 31, 2013.

|SELECTED ANNUAL
      INFORMATION
|---------------------------------

Selected consolidated financial information from continuing operations for 2013, 2012 and 2011 is as follows (expressed in thousands of United States dollars, except per share information):

|                                   |   | December 31, |   |   | December 31, |   |   | December 31, |  
|---------------------------------- | - | ------------ | - | - | ------------ | - | - | ------------ | -
|                                   |   | 2013         |   |   | 2012         |   |   | 2011         |  
|Loss for the year                  | $ | 65,597       |   | $ | 93,453       |   | $ | 69,166       |  
|Loss per share  basic and diluted | $ | (0.45        | ) | $ | (0.65        | ) | $ | (0.48        | )
|Total assets                       | $ | 883,333      |   | $ | 852,943      |   | $ | 922,005      |  
|Long
      Term liabilities        | $ | 4,214        |   | $ | 8,935        |   | $ | 540          |  

Since acquisition of the Escobal project and Initial Public Offering (IPO) completed in June 2010, the Company has incurred significant operating and exploration expenses, advancing underground development and substantially completing construction and commissioning of the Escobal Mine.

Tahoe Resources Inc.

---

|SUMMARY OF
      OPERATING RESULTS FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
|---------------------------------------------------------------------------------

Revenues

The Company did not achieve commercial production at the Escobal Mine until January 2014.  Accordingly, all proceeds from sales of concentrate during 2013 were offset against the capital cost recorded for the Escobal Mine.

Escobal Project Expenses

During 2013, the Company incurred $36.4 million in Escobal project expenses. Upon receipt of the exploitation permit in April 2013, the Company commenced capitalization of underground costs associated with the Escobal project.  For the year, the Company capitalized construction and sustaining costs of $45.6 million relating to underground infrastructure and development, as well as $124.6 million relating to surface infrastructure.  Pre-operating revenues in excess of expenses of $9.3 million were credited back to the project during the year.

During 2012, the Company incurred $70.9 million in Escobal Project expenses including $35.9 million in underground development and surface infrastructure as well as $25.0 million in site general administration and operation.  Underground development was expensed during 2012 in accordance with the Company’s accounting policies as the exploitation permit for the Escobal project had not been obtained.

Exploration

Exploration activities consisted primarily of exploration
drilling intended to define Escobal vein extensions, identify new mineralized
zones and enhance portions of the existing resource. Exploration expense in 2013
and 2012 was $5.3 million and $10.6 million respectively.

General and Administrative Expenses

General and administration expense was $19.5 million in 2013
compared to $19.0 million in 2012.

In addition to providing annual salaries to employees, the Company compensated directors and employees in the form of stock options, deferred share awards (“DSAs”), restricted share awards (“RSAs”) and share appreciation rights (“SARs”) on various vesting terms. The Company expenses the fair value of these issuances over the vesting periods.  Non-cash compensation expenses of $5.7 million and of $8.9 million were recognized during 2013 and 2012, respectively.

The balance of general and administration expense, excluding the non-cash compensation expenses noted above was $13.8 million in 2013 compared to $10.1 million in 2012.  This includes corporate overhead, legal and regulatory expenses, investor relations, travel, insurance, employee relocation expenses, office services and rental and other general and administrative expenses.

Interest Income

Interest income earned by the Company on its cash balances for
2013 was $0.1 million and $1.4 million in 2012.

Financing Fees

The Company incurred financing fees of $2.8 million in 2013, compared to no fees in 2012.

Interest expense of $0.6 million was capitalized during 2013.

Management Discussion and Analysis for the Year Ended December
31, 2013

---

Gain (loss) on Foreign Exchange

Foreign exchange gains and losses resulted from the appreciation and depreciation of the Canadian dollar, and other currencies, against the US dollar applicable to the Company’s Canadian dollar cash and cash equivalent balances at the end of 2013 and 2012.  The Company recorded minimal exchange rate losses in 2013 and a gain of $5.4 million in 2012.

|CASH FLOW FOR
      THE YEARS ENDED DECEMBER 31, 2013 AND 2012
|--------------------------------------------------------------

Operating activities resulted in a net cash outflow of $65.5
million in 2013 compared to $87.8 million in 2012. The reduction in cash used in
operations was attributable to a lower operating loss resulting from the
commencement of capitalization of underground development costs during 2013 and
an increase in short term liabilities partially offset by increases in trade
receivables and buildup of inventories.

Investing activities in 2013 consisted primarily of capitalized property, plant and equipment associated with construction of the Escobal Mine and amounted to $140.6 million, compared to $107.9 million in 2012.

Cash proceeds from financing activities in 2013 were $50.4
million primarily from loan proceeds and the exercise of employee stock options
partially offset by loan facility expenses. During 2012, financing activities
provided $5.0 million from the exercise of underwriter warrants and the issuance
of common shares.

|SUMMARY OF
      QUARTERLY RESULTS
|----------------------------------

Selected consolidated financial information from continuing
operations for the preceding eight quarters is as follows (expressed in
thousands of United States dollars, except per share information):

Net Loss per
    
    
    
    
    
    TotalInterest
    
    
    Net Income
    
    
    common share
    
    
    Total
    
    
    shareholders'Quarters ended
    
    Income
    
    
    (Loss)
    
    
    (basic/diluted)
    
    
    Assets
    
    
    deficitMarch 31, 2012
    
    562
    
    
    (20,976)
    
    
    (0.15)
    
    
    903,572
    
    
    893,201June 30, 2012
    
    471
    
    
    (26,073)
    
    
    (0.18)
    
    
    887,863
    
    
    873,585September 30, 2012
    
    297
    
    
    (21,483)
    
    
    (0.15)
    
    
    870,181
    
    
    854,378December 31, 2012
    
    85
    
    
    (24,920)
    
    
    (0.17)
    
    
    852,943
    
    
    831,297March 31, 2013
    
    61
    
    
    (24,875)
    
    
    (0.17)
    
    
    828,015
    
    
    807,997June 30, 2013
    
    45
    
    
    (15,614)
    
    
    (0.11)
    
    
    868,121
    
    
    794,683September 30, 2013
    
    19
    
    
    (15,537)
    
    
    (0.11)
    
    
    874,323
    
    
    781,561December 31, 2013
    
    4
    
    
    (9,571)
    
    
    (0.07)
    
    
    883,333
    
    
    774,154


Since the completion of the Company’s Initial Public Offering and acquisition of the Escobal Mine in June 2010, the Company has expanded the Escobal Mine site activities, and incurred significant operational and exploration expenses.  Variances in results by quarter reflect overall corporate activity and factors that do not necessarily recur each quarter, including stock based compensation, interest income on fluctuating cash balances, foreign exchange gains (losses), cash balances, and exploration drill programs.

Tahoe Resources Inc.

---

|RESULTS OF
      OPERATIONS FOR THE FOURTH QUARTER
|--------------------------------------------------

The following results of operations provide information on
expenses incurred in the quarters ended December 31, 2013 and 2012.

Revenues

The Company did not achieve commercial production at the Escobal Mine until January 2014.  Accordingly, all proceeds from sales of concentrate during the fourth quarter of 2013 were offset against the capital cost recorded for the Escobal Mine.

Escobal Project Expenses

During the fourth quarter 2013, the Company incurred $2.3 million in Escobal project expenses and capitalized construction and sustaining costs of $6.5 million relating to underground infrastructure and development, as well as $18.8 million relating to surface infrastructure.  Additionally, pre-operating revenues in excess of expenses of $9.3 million were credited back to the project during the period.

During the fourth quarter of 2012, the Company incurred Escobal project expenses of $20.0 million.  Site infrastructure has been capitalized since the third quarter of 2012.  Mine infrastructure and development costs were expensed prior to receipt of the exploitation permit in the second quarter of 2013 due to uncertainty of recovery, and were capitalized subsequent to receipt of the permit.

Exploration Expense

Exploration expense for the fourth quarter of 2013 was $1.4 million compared to $0.9 million in the fourth quarter of 2012.  A total of 19 exploration holes for 8,965 metres were drilled at Escobal during the period.  Exploration activities during 2013 were scaled back as the Company focused on completing construction and commissioning the Escobal Mine.

General and Administrative

Additionally, during the fourth quarter of 2013 and 2012,
corporate administration expenses were $3.5 million and $4.2 million,
respectively. These include non-cash compensation expense of $0.9 million in
2013 and $1.3 million in 2012. Cash expenses include corporate overhead, legal
and regulatory expenses, investor relations, travel, insurance, employee
relocation expenses, office services, rental and other general and
administrative expenses.

Interest Income

Interest income earned by the Company on its cash balances for
the fourth quarter of 2013 was $4, compared to $85 during the same period of
2012.

Financing Fees

Interest expense of $0.6 million was capitalized during the
fourth quarter.

Foreign Exchange Losses

Foreign exchange losses of $104 and $12 were recorded for the fourth quarter of 2013 and 2012, respectively.

|CASH FLOW FOR
      THE FOURTH QUARTER
|--------------------------------------

Operating activities reported a net cash outflow of $12.6
million in the fourth quarter of 2013 compared to outflow of $26.9 million in
the same quarter of 2012. The reduction in cash outflow from operations was
largely due to an increase in short term liabilities partially offset by
increased inventory in 2013.

Management Discussion and Analysis for the Year Ended December
31, 2013

---

Financing activities in the fourth quarter of 2013 generated a
net $1.0 million, whereas $0.4 million was generated in the same period of 2012.
Cash generated from financing activities resulted from the exercise of employee
stock options and partially offset by loan facility expenses.

|LIQUIDITY AND CAPITAL RESOURCES
|-------------------------------

The Company’s cash and cash equivalents balance as at December 31, 2013 was $8.8 million.

The Company had a working capital deficit of $69.2 million and long-term liabilities of $4.2 million as at December 31, 2013.  This compares to working capital of $149.3 million on December 31, 2012, a decrease of $218.5 million.
This decrease was primarily due to the reduction of cash and cash equivalents of $155.7 million from the buildup of inventories, the completion of construction and commencement of operations offset by the increase in short term liabilities.

The Company expanded its credit facility on January 2, 2014 by drawing an additional $25.0 million to fund ongoing activities during the ramp up of production at the Escobal Mine.  Future activities are to be funded from ongoing operations.  The Company anticipates that cash flows from sales of concentrate produced from the Escobal mine will be sufficient to meet current commitments and fund ongoing operations.  The Company may, however, require additional financing to proceed with the proposed expansion to the Escobal mine if funds from ongoing operations are not sufficient to fund this additional development.  The amount of available funds from operations will be contingent upon commodity prices for the Company’s concentrate products and actual operating expenses incurred.

|USE OF FINANCIAL INSTRUMENTS
|----------------------------

The principal financial instrument currently affecting the Company’s financial condition and results of operations is cash and cash equivalents. The Company’s exposure to credit risk on its Canadian currency and United States currency
deposits is limited by maintaining such cash and term deposits with major Canadian banks and banks in the United States that have high-credit qualities. A minimal amount of cash is held by banks in Switzerland (in compliance with Swiss law) and
Guatemala (to fund immediate operational needs). To minimize risk, the Company’s funds are kept in highly liquid instruments.

Cash and cash equivalents consist of cash and term deposits that are redeemable on demand. At December 31, 2013, the Company’s cash and cash equivalent holdings consisted of USD$7.1 million, $1.1 million in US$ equivalent Can$,
and $0.6 million in US$ equivalent in other currencies. The Company recognized a foreign exchange loss of $104 for the quarter and nil for the year.

Tahoe Resources Inc.

---

|FINANCIAL RISK
      MANAGEMENT
|-------------------------------

Overview

The Company has exposure to the following risks from its use of
financial instruments:

- Credit risk
- Liquidity risk
- Market risk

Risk Management Framework

The Board of Directors has overall responsibility for the
establishment and oversight of the Companys risk management framework. The
Companys Audit Committee oversees how management monitors compliance with the
Companys risk management policies and procedures, and reviews the adequacy of
the risk management framework in relation to the risks faced by the Company.

The Companys risk management policies are established to
identify and analyze the risks faced by the Company, to set appropriate risk
limits and controls, and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in
market conditions and the Companys activities. The Company, through its
training and management standards and procedures, aims to develop a disciplined
and constructive control environment in which all employees understand their
roles and obligations.

Liquidity Risk

Liquidity risk is the risk that the Company will encounter
difficulty in meeting the obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset. The Companys
approach to managing liquidity is to ensure, as far as possible, that it will
always have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Companys reputation.

The Company’s financial liabilities at December 31, 2013 and 2012 includes accounts payable and accrued liabilities all of which are due within 12 months or less.  The long-term liability consists of the SARS long-term portion, severance and reclamation provision.

Over1
      year
    
    
    2-5
      years
    
    
    5
      years
    
    
    December 31, 2013
    
    
    December 31, 2012Accounts payable, accrued liabilities and income tax payable
    $
    55,486
    
    $
    -
    
    $
    -
    
    $
    55,486
    
    $
    16,925Current debt
    
    49,479
    
    
    -
    
    
    
    
    
    49,479
    
    
    -Lease agreements for rental of office
      facilities
    
    1,553
    
    
    2,269
    
    
    66
    
    
    3,868
    
    
    891Commitment to purchase plant and equipment
    
    27,021
    
    
    -
    
    
    -
    
    
    27,021
    
    
    65,366Other long-term liabilities
    
    -
    
    
    1,193
    
    
    -
    
    
    1,193
    
    
    1,030Reclamation
      provision
    
    -
    
    
    -
    
    
    3,021
    
    
    3,021
    
    
    3,691Total
    $
    133,519
    
    $
    3,462
    
    $
    3,087
    
    $
    140,068
    
    $
    87,903


Credit Risk

Credit risk is the risk of financial loss to the Company if a
counter-party to a financial instrument fails to meet its contractual
obligations.

Management Discussion and Analysis for the Year Ended December
31, 2013

---

The Company holds the majority of its cash and cash equivalents
in CAN and US$ with large reputable financial institutions in Canada.

Market Risk

Market risk is the risk that changes in market prices, such as
foreign exchange and interest rates will affect the value of the Companys
holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while
optimizing return.

Foreign Exchange Risk

The Company is exposed to currency risk on cash and cash
equivalents and accounts payable that are denominated in a currency other than
the respective functional currency of Company entities which is the US$. To
minimize risk, the Companys funds are kept in highly liquid instruments such as
commercial paper and time deposits. The Company also contracts for goods and
services mainly in US$ currency. At December 31, 2013, the Company held
substantially all of its cash in US$ to minimize exchange rate risk.

|                                       |   | December 31, |  |   | December 31, | 
|-------------------------------------- | - | ------------ |  | - | ------------ | 
|                                       |   | 2013         |  |   | 2012         | 
|Cash and cash equivalents in
      US$ | $ | 7,145        |  | $ | 163,518      | 
|Cash in CAN$                           |   | 1,050        |  |   | 458          | 
|Cash in other currencies               |   | 643          |  |   | 585          | 
|Total Cash and Cash Equivalents        | $ | 8,838        |  | $ | 164,561      | 

Cash and cash equivalents comprise cash balances and deposits
with maturities of 90 days or less.

|                                |   | December 31, |  |   | December 31, | 
|------------------------------- | - | ------------ |  | - | ------------ | 
|Cash
      and Cash Equivalents |   | 2013         |  |   | 2012         | 
|Cash in US$                     | $ | 8,812        |  | $ | 146,586      | 
|Cash
      equivalents          |   | 26           |  |   | 17,975       | 
|Total Cash and Cash Equivalents | $ | 8,838        |  | $ | 164,561      | 

Interest Rate Risk

Interest rate risk is the risk that the Companys future cash
flows and fair values will fluctuate as a result of changes in market interest
rates. At the reporting date, the Companys interest-bearing financial
instruments are related to cash and cash equivalents and current debt. At period
end the current debt was subject to a floating interest rate. The weighted
average interest rate paid by the Company during 2013 related to the current
debt was 6.27% (2012: nil%). At December 31, 2013 the Company has determined the
interest rate risk to be low.

|SHARE CAPITAL
      AND FINANCINGS
|----------------------------------

As at December 31, 2013, the Company had outstanding a total of
146,094,407 common shares, 2,865,256 options to purchase common shares and
181,334 deferred share awards, for an aggregate of 149,140,997 shares on a fully
diluted basis.

Tahoe Resources Inc.

---

|OUTSTANDING SHARE
    DATA
|--------------------------

As at March 12, 2014, the Company had the following common
      shares and securities convertible into common shares outstanding:

|Common shares issued prior to
      IPO                                               |  | 3,100,001   | 
|------------------------------------------------------------------------------------- |  | ----------- | 
|Common shares issued in IPO,
      Escobal project acquisition and related activities |  | 111,990,304 | 
|Common shares issued in
      equity financing                                        |  | 24,959,692  | 
|Common shares issued after
      exercise of Underwriter warrants and stock options   |  | 4,865,542   | 
|Common shares issued under
      RSA and DSA compensation plan                        |  | 1,799,333   | 
|Stock options (vested and
      unvested) outstanding                                 |  | 2,350,458   | 
|DSAs outstanding                                                                      |  | 75,667      | 
|Fully diluted shares outstanding                                                      |  | 149,140,997 | 

|ASSET
      VALUATION
|---------------------

There have been no events or changes in circumstances that would indicate an impairment of the Escobal Mine as at December 31, 2013.

|OFF-BALANCE
      SHEET ARRANGEMENTS
|------------------------------------

The Company currently has no off-balance sheet arrangements.

|USE OF
      ESTIMATES AND JUDGMENTS
|------------------------------------

The preparation of financial statements in conformity with IFRS
requires management to make estimates and judgments that affect the application
of accounting policies and the reported amounts of assets, liabilities,
contingent liabilities, income and expenses. Actual results could differ from
these estimates.

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

Information about critical judgments and estimates in applying
accounting policies that have the most significant effect on the amounts
recognized in the consolidated financial statements are as follows:

Judgments:

|(i) | Commercial Production                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | In order to declare commercial production a mine must be
      able to operate at levels intended by management. Prior to commercial
      production costs incurred are capitalized as part of the cost of placing
      the asset into service and proceeds from the sale of concentrates are
      offset against the costs capitalized. Subsequent to the declaration of
      commercial production depletion of the costs incurred begins. Management
      considers several criteria in determining when a mine is operating at
      levels intended, and is therefore in commercial production.(See Operations
      and Exploration section 3. Operations of this MD&A and the
      Subsequent Events item 2 for additional commercial production
      discussion)

Management Discussion and Analysis for the Year Ended December
31, 2013

---

|(ii) | Functional Currency                                                                                                                                                                                                                                                                                                                                                                                         
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                             
|     | The functional currency for each of the Companys subsidiaries is the currency of the primary economic environment in which the entity operates. The Company has determined that for each subsidiary the functional currency is
      the US dollar. When determining the functional currency certain judgments may be involved to assess the primary economic environment in which the subsidiary operates.

Estimates:

|(iii) | Economic recoverability and probability of future economic benefits of exploration, evaluation and development costs.                                                                                                                                                                                                                                                                                                                                                                                                                     
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      | The Company has determined that development and related costs incurred which have been capitalized are economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of
      future economic benefits including geological and metallurgical information, economic assessments and existing permits for the life of mine plan. The estimates contained within these criteria could change over time which could affect the economic
      recoverability of capitalized costs.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      | During 2012 and the first quarter of 2013, the Company expensed underground development expenses associated with the Escobal mine as the Company had not received the exploitation permit necessary for commercial mining operations.
      The Company received the exploitation permit in April 2013 and has capitalized these underground development expenses during the second, third and fourth quarters of 2014. The surface assets associated with the Escobal mine were capitalized both
      during 2012 and 2013.             
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(iv)  | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      | As is customary in the industry, revenue on provisionally priced sales is recognized based on relevant forward market prices. At each reporting period, provisionally priced sales are marked to market based on the estimated forward
      price for the quotational period stipulated in the contract. The adjustment to provisionally priced metal sold is recorded as an adjustment to sales revenue.                                                                                                                                

Tahoe Resources Inc.

---

|(v) | Estimated tonnes in the mineral resource                                                                                                                                                                                                                                                                                                                                                          
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The carrying amounts of the Companys mining properties are all depletable upon commencement of commercial production based on UOP method over the life of the mine based on tonnes in the estimated resource. Changes to
      estimates of tonnage and depletable costs including changes resulting from revisions to the Companys mine plans can result in a change to future depletion rates.

|(vi)  | Determination of Useful Lives                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      | Determination of useful lives of property, plant and equipment for assets other than mining interests are depreciated using the straight-line method. Should the actual useful life of the property, plant or equipment vary, future
      depreciation charges may change. Assets with similar useful lives are grouped and treated as a single asset for the purposes of depreciation. Should the grouping of these like assets change, depreciation charges may vary materially in the
      future.                                                                                                                                                                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(vii) | Impairment charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      | At the end of each reporting period, the Company assesses whether any indication of impairment exists. Where an indicator of impairment exists, an impairment analysis is performed. The impairment analysis requires the use of
      estimates and assumptions including amongst others,
      long-term commodity prices, discount rates, length of mine life, future production levels, future operating costs, future capital expenditures and tax positions taken. The estimates and assumptions are subject to risk and uncertainty; hence, there
      is the possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the assets. In such circumstances, some or all of the carrying value of the assets may be further impaired or the impairment
      charge reduced with the impact recorded in the consolidated statements of operations.

Management Discussion and Analysis for the Year Ended December
31, 2013

---

|(viii) | Decommissioning liability                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | The Companys accounting policy for the recognition of accrued site closure costs requires significant estimates and assumptions such as the requirements of the relevant legal and regulatory framework, the magnitude of
      possible disturbance and the timing, extent and costs of required closure and rehabilitation activity. Changes to these estimates and assumptions may result in future actual expenditures differing from the amounts currently provided for. The
      decommissioning liability is periodically reviewed and updated based on the available facts and circumstances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(ix)   | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | The Company is periodically required to estimate the tax basis of assets and liabilities. Where applicable tax laws and regulations are either unclear or subject to varying interpretations, it is possible that changes in these
      estimates could occur that materially affect the amounts of deferred income tax assets and liabilities recorded in the financial statements. Changes in deferred tax assets and liabilities generally have a direct impact on earnings in the period of
      changes. Each period, the Company evaluates the likelihood of whether some portion or all of each deferred tax asset will not be realized. This evaluation is based on historic and future expected levels of taxable income, the pattern and timing of
      reversals of taxable temporary timing differences that give rise to deferred tax liabilities, and tax planning initiatives. Levels of future taxable income are affected by, among other things, the market price for saleable metals, production costs,
      interest rates and foreign currency exchange rates.

|(x)  | Valuation of inventory                                                                                                                                                                                                                                                                                                                                                                                                                                
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | All inventory is valued at the lower of average cost or net realizable value. Management is required to make various estimates and assumptions to determine the value of stockpiled ore and concentrate inventories. The estimates and
      assumptions include surveyed quantities of stockpiled ore, in-process volumes, metal contents, costs to recover saleable metals, payable metal values once processed and the corresponding metals prices.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(xi) | Share-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | The Company makes certain estimates and assumptions when calculating the fair values of share-based compensation granted. The significant estimations and assumptions include expected volatility, expected life, expected dividend
      rate and expected risk-free rate of return. Changes in these assumptions may result in a material change to the expense recorded for the issuance of share-based compensation.                              

Tahoe Resources Inc.

---

Related Party Transactions

Goldcorp holds an approximate 39.6% interest in the Company’s publicly traded shares.  There were no related-party transactions in 2013 and 2012 with Goldcorp.

Management Discussion and Analysis for the Year Ended December
31, 2013

---

DISCLOSURE CONTROLS AND PROCEDURESAND INTERNAL
CONTROLS OVER FINANCIAL REPORTING

|MANAGEMENTS
      REPORT ON DISCLOSURE CONTROLS AND PROCEDURES
|---------------------------------------------------------------

The Companys management, including the President and Chief
Executive Officer and the Vice-President and Chief Financial Officer,
acknowledge responsibility for the design of disclosure controls and procedures
and internal controls over financial reporting.

|MANAGEMENTS
      REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING
|-----------------------------------------------------------------------

The Companys management is responsible for establishing and
maintaining an adequate system of internal controls, including internal controls
over financial reporting. Tahoes internal controls include policies and
procedures that (1) pertain to the maintenance of records and accurately and
fairly reflect, in reasonable detail, the transactions related to acquisition,
maintenance and disposition of assets; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with IFRS, and receipts are recorded and expenditures
are incurred only in accordance with authorization of management and directors;
and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of assets that could have a
material effect on financial statements.

The Company has designed its internal risk management and
control systems to provide reasonable (but not absolute) assurance to ensure
compliance with regulatory matters and to safeguard reliability of the financial
reporting and its disclosures. Having assessed the effectiveness of the
Companys internal controls over financial reporting, the Chief Executive
Officer and Chief Financial Officer believe that the internal controls over
financial reporting are effective at a reasonable assurance level as of the end
of the period covered by this report.

In 2013 the Company underwent a comprehensive effort to implement Section 404 of the Sarbanes Oxley Act of 2002. This project included the documentation, testing and review of our internal controls over financial reporting under the direction of senior management.

|CHANGES IN
      INTERNAL CONTROLS
|----------------------------------

There were no changes to the Companys internal controls over
financial reporting during the year that have materially affected or are
reasonably likely to materially affect the Companys internal controls over
financial reporting.

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

Tahoe Resources Inc.

---

|CHANGES IN
      ACCOUNTING STANDARDS                                                                                                                                                                            
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                 
|For a detailed description of the changes in accounting
      standards effective January 1, 2013 and January 1, 2014, please refer to
      Note 2  Significant accounting policies of the financial statements

ADDITIONAL INFORMATION

Tahoe is a Canadian public mineral exploration and
production-stage company whose common shares are listed on the TSX under the
symbol THO and on the NYSE under the symbol TAHO. Tahoe is a reporting
issuer in each of the provinces and territories of Canada. Additional
information relating to the Company, including a copy of this MD&A, may be
obtained or viewed from the System for Electronic Data Analysis and Retrieval
(SEDAR) website at www.sedar.com, on the Electronic Data Gathering, Analysis,
and Retrieval system (EDGAR) at www.sec.gov, and on the Companys website at
www.tahoeresourcesinc.com.

Scientific and technical information contained in this MD&A
was reviewed and approved by Tahoes Vice President  Technical Services,
Charles Muerhoff, a qualified person as defined by National Instrument 43-101
 Standards of Disclosure for Mineral Projects.

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

This MD&A contains “forward-looking information” within the meaning of applicable Canadian securities legislation, and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively referred to as “forward-looking information”). Forward-looking information in this MD&A may include, but is not limited to: statements relating to changes in Guatemalan mining laws and regulations; information with respect to our future financial and operating performance and that of our subsidiaries, including our statement that our objective is to operate the Escobal Mine to 3500 tpd; the estimation of mineral resources and our realization of mineral resource estimates; our plan to expand the resource base of the Escobal Mine; costs and timing of further development of the Escobal Mine, including the deferral of power line completion, the decision to use generator power for at least one year, the cost estimate for the 4500 metric tons per day scenario,  and statements related to achieving production in excess of 3500 metric tons per day by 2016; the acquisition of additional mineral resource interests in the Americas; future exploration and development activities, and the costs and timing of those activities; timing and receipt of approvals, consents and permits under applicable legislation; results of future exploration and drilling; metals prices; and adequacy of financial resources.

Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. We believe that the assumptions and expectations reflected in such forward-looking information are reasonable. Assumptions have been made regarding, among other things: our ability to carry on exploration and development activities; the timely receipt of required approvals; the price of silver and other metals; our ability to operate in a safe, efficient and effective manner; and our ability to obtain financing as and when required and on reasonable terms. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used.

Management Discussion and Analysis for the Year Ended December
31, 2013

---

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed or implied by such forward-looking information, including risks associated with our dependence on the Escobal Mine and our limited operating history, risks associated with the fluctuation of the price of silver and other metals, the risk of civil unrest and political instability in Guatemala, risks associated with the availability of additional funding as and when required, exploration and development risks, permitting and licensing risks, uncertainty in the estimation of mineral resources, geologic, hydrological, and geotechnical risks, infrastructure risks, inflation risks, governmental regulation risks, environmental risks and hazards, insurance and uninsured risks, land title risks, risks associated with competition, risks associated with currency fluctuations, labour and employment risks, risks associated with dependence on key management personnel and executives, litigation risks, the risk that dividends may never be declared, risks associated with the repatriation of earnings, risks of negative operating cash flow, risks associated with the Company’s hedging policies, risks associated with the interests of certain directors in other mining projects, risks associated with dilution, risks associated with stock exchange prices and risks associated with effecting service of process and enforcing judgments. See the Company’s 2013 Annual Information Form available on www.sedar.com under the heading “Description of Our Business – Risk Factors”.

Our forward-looking statements are based on the reasonable
beliefs, expectations and opinions of management on the date of this MD&A.
Although we have attempted to identify important factors that could cause actual
results to differ materially from those contained in forward-looking
information, there may be other factors that cause results not to be as
anticipated, estimated or intended. There is no assurance that such information
will prove to be accurate, as actual results and future events could differ
materially from those anticipated in such information. Accordingly, readers
should not place undue reliance on forward-looking information. We do not
undertake to update any forward-looking information, except as, and to the
extent required by, applicable securities laws.

Investors are cautioned that the PEA is considered preliminary
in nature and includes mineral resources, including inferred mineral resources
that are considered too speculative geologically to have the economic
considerations applied to them that would enable them to be categorized as
mineral reserves. Mineral resources that are not mineral reserves have not yet
demonstrated economic viability. Due to the uncertainty that may be attached to
mineral resources, it cannot be assumed that all or any part of a mineral
resource will be upgraded to mineral reserves. Therefore, there is no certainty
that the results concluded in the PEA will be realized.

NOTICE TO READERS IN THE UNITED STATES

Canadian standards, including those under NI 43-101, differ significantly from the requirements of the Securities and Exchange Commission of the United States (“SEC”), and mineral reserve and resource information contained or incorporated by reference in the MD&A may not be comparable to similar information disclosed by U.S. companies. Under U.S. standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. The SEC’s disclosure standards normally do not permit the inclusion in documents filed with the SEC of information concerning “measured mineral resources,” “indicated mineral resources” or “inferred mineral resources” or other descriptions of the amount of mineralization in mineral deposits that do not constitute “reserves” by U.S. standards. U.S. investors should also understand that “inferred mineral resources” have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that all or any part of an “inferred mineral resource” will ever be upgraded to a higher category. Under Canadian rules, estimated “inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies except in rare cases. Investors are cautioned not to assume that all or any part of an “inferred mineral resource” exists or is economically or legally mineable. Disclosure of “contained ounces” in a mineral resource estimate is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in place tonnage and grade without reference to unit measures. The requirements for identification of “reserves” are also not the same as those of the SEC, and reserves reported by the Company may not qualify as “reserves” under SEC standards. Accordingly, information concerning mineral deposits set forth herein may not be comparable with information made public by companies that report in accordance with U.S. standards.

Tahoe Resources Inc.

---