---

| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------



TAHOE RESOURCES INC.5190 Neil Rd. Suite 460Reno, Nevada USA
89502





MANAGEMENT DISCUSSION AND ANALYSIS(MD&A)

March 7, 2013

|March 7, 2013 | 
|------------- | 

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| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------



|March 7, 2013 | 
|------------- | 

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| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

TABLE OF CONTENTS

|                                                                          | **Page**
|------------------------------------------------------------------------- | --------
|INTRODUCTION                                                              | 1       
|                                                                          |         
|BUSINESS
      OVERVIEW                                                   | 1       
|                                                                          |         
|HIGHLIGHTS
      OF 2012                                                  | 1       
|                                                                          |         
|Business
      and Political                                              | 1       
|                                                                          |         
|Exploration                                                               | 2       
|                                                                          |         
|Operational                                                               | 3       
|                                                                          |         
|EXPLORATION                                                               | 3       
|                                                                          |         
|OPERATIONS                                                                | 4       
|                                                                          |         
|Government,
      Permitting and Community Relations                      | 4       
|                                                                          |         
|Exploitation
      Permit                                                 | 5       
|                                                                          |         
|Concession
      Filings                                                  | 6       
|                                                                          |         
|Power
      Line                                                          | 6       
|                                                                          |         
|Subsequent
      Events                                                   | 6       
|                                                                          |         
|Underground
      Development and Construction                            | 7       
|                                                                          |         
|Project
      Status and Timeline                                         | 8       
|                                                                          |         
|RISK
      FACTORS                                                        | 8       
|                                                                          |         
|Dependence
      on the Escobal Project                                   | 8       
|                                                                          |         
|Operations
      in Guatemala                                             | 8       
|                                                                          |         
|Obtaining
      and Renewing Licenses and Permits                         | 9       
|                                                                          |         
|Anti-Mining
      Resistance                                              | 9       
|                                                                          |         
|Production
      Decision                                                 | 9       
|                                                                          |         
|SELECTED
      FINANCIAL INFORMATION                                      | 9       
|                                                                          |         
|Basis
      of Presentation                                               | 9       
|                                                                          |         
|Summary
      of Quarterly Results                                        | 10      
|                                                                          |         
|Selected
      Annual Information                                         | 10      
|                                                                          |         
|Results
      of Operations for the Fourth Quarter                        | 10      
|                                                                          |         
|Cash
      Flow                                                           | 12      
|                                                                          |         
|Summary
      of Operating Results Years Ended December 31, 2012 and 2011 | 12      
|                                                                          |         
|Cash
      Flow                                                           | 14      



|March 7, 2013 | 
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| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

|Liquidity
      and Capital Resources                                   | 14
|----------------------------------------------------------------------- | --
|                                                                        |   
|Financial
      Risk Management                                         | 14
|                                                                        |   
|Overview                                                                | 14
|                                                                        |   
|Risk
      Management Framework                                         | 14
|                                                                        |   
|Liquidity
      Risk                                                    | 15
|                                                                        |   
|Credit
      Risk                                                       | 16
|                                                                        |   
|Market
      Risk                                                       | 16
|                                                                        |   
|Foreign
      Exchange Risk                                             | 16
|                                                                        |   
|Interest
      Rate Risk                                                | 17
|                                                                        |   
|Share
      Capital and Financings                                      | 17
|                                                                        |   
|Asset
      Valuation                                                   | 17
|                                                                        |   
|Off-Balance
      Sheet Arrangements                                    | 17
|                                                                        |   
|Outstanding
      Share Data                                            | 17
|                                                                        |   
|Critical
      Accounting Estimates                                     | 17
|                                                                        |   
|Mineral
      Property, Land, Plant and Equipment                       | 18
|                                                                        |   
|Reclamation
      and Closure                                           | 18
|                                                                        |   
|Share
      Based Payments                                              | 18
|                                                                        |   
|Income
      Taxes                                                      | 19
|                                                                        |   
|Related
      Party Transactions                                        | 19
|                                                                        |   
|DISCLOSURE
      CONTROLS AND PROCEDURES                                | 19
|                                                                        |   
|INTERNAL
      CONTROLS OVER FINANCIAL REPORTING                        | 19
|                                                                        |   
|Managements
      Report on Internal Controls Over Financial Reporting | 19
|                                                                        |   
|Changes
      in Internal Controls                                      | 20
|                                                                        |   
|CHANGES
      IN ACCOUNTING STANDARDS                                   | 20
|                                                                        |   
|ADDITIONAL
      INFORMATION                                            | 20
|                                                                        |   
|CAUTIONARY
      STATEMENT ON FORWARD-LOOKING INFORMATION               | 20
|                                                                        |   
|Forward-Looking
      Statements                                        | 20
|                                                                        |   
|Notice
      to Readers in the United States                            | 22



|March 7, 2013 | 
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| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

|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, 2012, with comparison
to 2011. 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, 2012 and 2011, prepared in
accordance with International Financial Reporting Standards as issued by the
International Accounting Standards Board (IFRS) effective as of December 31,
2012. The information provided herein supplements, but does not form part of,
the consolidated financial statements. This discussion covers the year ended
December 31, 2012 and the subsequent period up to the date of this MD&A. All
dollar amounts are stated in thousands of United States dollars unless otherwise
indicated. Information for this MD&A is as at March 7, 2013.

|BUSINESS
      OVERVIEW
|-----------------------

Tahoe was incorporated on November 10, 2009 under the laws of
the Province of British Columbia and is focused on the acquisition, exploration
and development of mineral properties in the Americas for the mining of precious
metals.

Tahoes principal objective is to develop the Escobal project,
a mining project located in southeastern Guatemala containing high-grade silver,
gold, lead, and zinc mineralization (the Escobal project). Tahoe is engaging
in ongoing exploration drilling programs, detailed metallurgical investigations
and engineering design work as well as developing the mine and building plant
and processing facilities. Pending completion of construction and receipt of
operating permits, commercial production of silver-bearing concentrates is
expected in early 2014.

Developing the Escobal project into a profitable silver mining
operation will depend upon Tahoes ability to define mineral reserves, to permit
operations and to advance the project to production. The Company also engages in
activities to review prospective mineral property acquisitions. The Company
currently does not have any commercial operations or revenue. Tahoe expects that
its working capital (current assets minus current liabilities) is sufficient to
finance the Escobal project.

|HIGHLIGHTS OF
      2012
|------------------------

BUSINESS AND POLITICAL

- The extra-legal moratorium on the issuance of new mining permits effectively
      expired with the departure of the Colóm administration in early January
      2012. The new administration of President Otto Perez Molina refused to recognize
      the moratorium and issued eight exploration licenses and is again processing
      exploitation licenses for extractive companies in 2012.
- During the first quarter of 2012, the government of Guatemala and the Mining
      Association signed an agreement to voluntarily increase royalties on mining.
      The Company agreed to adhere to the terms of the voluntary agreement and
      began negotiating the specific terms of the agreement with The Ministry
      of Energy and Mines (MEM). Congress also enacted new legislation
      as to taxation on business and repatriation of dividends outside of Guatemala.
- On May 7, 2012, the Company announced the completion of a new National
      Instrument (NI) 43- 101 compliant resource estimate and Preliminary Economic
      Assessment (PEA) for the Escobal project. The PEA describes production expansion scenarios from the current 3500
  metric tonne per day (mtpd) scenario to 4500 and 5500 mtpd underground mine
  plans. The increased royalty rates from the voluntary agreement and new tax
  rates approved by Congress in 2012 are reflected in the Companys May 2012
  PEA.

|March 7, 2013 | 
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| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

- On May 8, 2012, the Company stock was listed on the New York Stock Exchange
    under the symbol TAHO.
- On September 17-18, 2012, anti-mining protestors impeded progress on the
    power line and trespassed onto mining property, causing minor injuries and
    some damage to contractor-owned equipment and temporary facilities. Company
    security, national police and the Guatemalan military were deployed to quell
    the violence and remove trespassers from the Escobal property. The federal
    prosecutors office brought charges against 27 of the violent offenders
    who were apprehended by authorities.
- In October 2012, MEM introduced a legislative proposal in Congress to increase
    the royalty rates to 5% for precious metals and 3% for base metals. If passed
    by Congress, these amendments would supplant the voluntary royalty agreement.
- MEM submitted legislation in October 2012, that would permit the state to
    acquire up to a 40% interest in natural resource projects in Guatemala. After
    introducing the legislation, MEM officials stated that the proposed amendment
    does not cover existing projects such as Escobal. However, it is unclear how
    this may affect the Companys regional exploration program.
- On March 7, 2013, the Board of Directors accepted the resignation of the
    Companys CFO, Jaime Mondragón, effective at midnight on March 8,
    2013 and appointed Mark Sadler to be the new CFO, effective March 9, 2013.
- As at December 31, 2012, Tahoe had outstanding a total of 145,565,204 common
    shares, 2,534,793 options to purchase common shares and 370,000 deferred share
    awards. As at December 31, 2012, Tahoe had a total of 148,469,997 common shares
    issued and outstanding on a fully diluted basis.

EXPLORATION

- In 2012, exploration drilling at the Escobal project explored extensions of
  the deposit where it was open laterally and to depth and improved confidence
  in the mineral resource through in-fill drilling. A total of between one and
  six drills operated from the surface at the Escobal project throughout the
  year.
- In early 2012 drilling was also carried out at the Varejones project 20
  kilometres east of Escobal with two drills. Drilling identified vein
  mineralization that was not deemed economically viable and the drilling was
  suspended in June.

|March 7, 2013 | 
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| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

OPERATIONAL

- As at December 31, 2012, the Engineering, Procurement and Construction
  Management (EPCM) was 69% complete and underground development was 70%
  complete. Total underground advance through year-end was 4,817 metres.
- In 2012, underground development was slowed by perched water associated
  with geologic structures in the east and central headings. The Company
  implemented surface well dewatering to support development advance.
  Development costs were higher than originally forecast but within the
  contingency in the capital cost estimate. By the end of the year, advance
  rates and development costs had improved as water and ground conditions
  normalized. Vein development on the 1,265 and 1,290 metre levels had commenced
  by year- end, and the underground mine is expected to be ready to feed the
  mill when commissioning commences in the second half of 2013.
- Power line installation along the highway right-of-way commenced in
  September 2012, but was interrupted by protestors. Given the civil unrest, the
  Company developed a contingency plan to provide temporary generator power for
  the mine start up in order to prevent delay to the production schedule. The
  Company anticipates it will recommence work on the power line in 2014, if not
  sooner.
- Construction of the mill and ancillary facilities at the Escobal project
  significantly advanced in 2012 and development remained on schedule and on
  budget. We expect the mill to be available for commissioning in the second
  half of 2013.
- Acquisition of all operating permits is now complete with the exception of
  the Escobal exploitation permit which the Company expects to receive in the
  first half of 2013.

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

All identified mineral resources for the Escobal project are
located on the Oasis concession, one of three exploration concessions which
comprise the project. The 2012 drilling program served to explore extensions of
the deposit where it was open laterally and to depth and to improve confidence
in the mineral resource through in-fill drilling. A total of between one and six
drills operated from the surface at the Escobal project throughout the year.

The Escobal project mineral resource occurs in a mineralized
zone within the Oasis concession 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 2012. As at December 31,
2012, a total of 391 exploration holes (152,993 metres) have targeted the
Escobal vein system. In addition, 21 drill holes totaling approximately 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 (64%) of mineralized intercepts drilled using NQ or larger size
drill core. Core recovery has averaged 96%.

Exploration drilling in 2012 concentrated on dip extensions in
  the East, Central, and West Margarito zones, and explored new mineralized zones
  in the extreme east and west extension areas. The drill campaign succeeded in
  expanding the known limits of the Escobal vein both to depth and laterally to
  the east and west. Step-out drilling In the Central zone further extended the
  irregularly dipping mineralized structure 80 metres down dip from the previously
  defined resource limit.

|March 7, 2013 | 
|------------- | 

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| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

In the East zone, drilling extended known mineralization 130
metres directly below the original East zone resource where the typical
south-dipping vein transitions to a dilational jog similar in character, rock
type and elevation as found in the Central Escobal zone. In addition, lateral
step out holes towards the east confirmed an extension of mineralization over
450 metres east of the current resource model. The East zone remains open to the
east and to depth. Additional drilling is planned in this zone in early 2013.

In the west zone, drilling succeeded in extending the Margarito
zone at depth while lateral drilling confirmed mineralized veining far to the
west of the published resource. New drilling extended the Margarito zone 200
metres vertically where the vein changes dip and follows a north-dipping vein
jog and remains open to depth. Three deep drillholes, using a large-capacity
drill confirmed deep vein intercepts similar to Escobal mineralization some 700
metres west and 950 metres below the current resource. These blind intercepts
occur under deep valley alluvial cover where the vein has been down-dropped in
stair-step fashion along roughly north trending normal faults. The far west
Escobal extension is interpreted to trend northwest and dip steeply to the north
although additional drilling is required to confirm orientation continuity of
these wide-spaced intercepts.

While exploration in 2012 was designed to define Escobal vein
extensions and enhance portions of the existing resource, drilling slowed during
the latter part of the year as 1) the available areas for surface drilling were
impeded by construction activities; 2) much of the exploration effort was
focused on the three underground drilling rigs which are devoted to in-fill and
stope definition drilling efforts; and, 3) budget and spending constraints
required a slow-down in surface drilling activities due to the high cost of deep
drilling in the west extension zone. As Escobal transitions into project
development, exploration will continue to define vein extensions through wide
step-out drilling as well as enhancing the resource through further in-fill
definition drilling. Priority will be placed on testing deep targets at Escobal
as well as other district and regional targets using the geologic model
developed at Escobal. In addition to the Escobal vein, twelve veins have been
discovered on the Companys concessions. These prospective areas continue to be
evaluated.

On a regional basis, drilling was carried out at the Varejones
project 20 kilometres east of Escobal with two drills in the first half of the
year. At Varejones, drilling totaled 26 holes for 8,085 metres on four target
areas along the three kilometre long vein trend. Drilling identified vein
mineralization that was not deemed economically viable and the drilling was
suspended in late June 2012.

In 2013, the drilling of the Escobal vein and regional drilling
is expected to continue using two core drills. Exploration expenditures for the
year ended December 31, 2012 totaled $10.6 million.

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

In 2012, Tahoe primarily focused on (1) community relations (2)
permitting activities and government relations; and (3) advancing underground
headings, mill construction, and development of surface and ancillary
facilities.

GOVERNMENT, PERMITTING AND COMMUNITY RELATIONS

Proposed Changes to Guatemalan Mining
  LawVoluntary Royalty Agreement:In January 2012, the new administration
  and the Mining Industry Association agreed to general terms of a royalty agreement
  (General Royalty Agreement) in which the industry agreed to voluntarily
  pay higher royalties to the national and local governments. Subsequent to executing
  the General Royalty Agreement, the Company and the federal government are discussing
  the terms of an individual royalty agreement (Escobal Royalty Agreement)
  that is meant to be finalized in 2013 prior to the commencement of mill commissioning at Escobal. The Escobal
Royalty Agreement is expected to commit the Company to pay a Net Smelter Revenue
(NSR) royalty on the concentrates sold from the Escobal projects mine
production, amounting to 5% NSR on all metals. The Company also expects the
royalty to revert to the 1% NSR contained in the current Mining Law if silver
prices fall below $16.00 per ounce. Finally, if the recently introduced
amendments to the existing mining law are passed by Congress, the terms of the
General and Escobal Royalty Agreements will be supplanted by the new law.

|March 7, 2013 | 
|------------- | 

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| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

Proposed Mining Law
Reform:On October 19, 2012, MEM proposed a new mining law to the
Guatemalan Congress that sets royalties for precious metals at 5% and for base
metals at 3%; establishes a mining fund to regulate distribution of the
royalties; develops programs for enhanced community dialogue and environmental
protection; and allows the state to participate in mining activities through a
state-owned mining company. Under the latter provision, the state company may
acquire an interest of up to forty percent of any project that exploits metallic
minerals. The latter proposal cannot go into effect without the passage of an
additional special law that is not described in the legislation. The Company
has been reassured by government officials, including the MEM Minister, that the
states proposed participation would not affect existing projects or the
Companys ownership interest in the Escobal project. In addition, after
introducing the proposed amendments, the MEM Minister publicly stated that
companies will not be required to partner with the state under any state
ownership program. It is not clear how the proposed reforms would affect the
Companys Guatemalan exploration projects. To be effective, the legislation must
be passed by a majority vote in Congress.

Exploitation Permit

From 2008-2011, President Colom imposed a de facto, extra-legal
moratorium on the issuance of new mineral resource permits. As a result of the
moratorium, MEM issued very few new licenses during Coloms tenure. A new
President, Otto Perez Molina, was inaugurated on January 14, 2012. The Perez
administration refused to recognize the moratorium and MEM began review of all
license applications in the first quarter of 2012. The new government has stated
its intention to uphold the mining law as written and support mining projects in
Guatemala. In 2012, MEM issued 8 exploration licenses, including the Companys
San Juan Bosco exploration license, and began processing exploitation license
applications.

In the first quarter of 2012, MEM completed its legal review of
the Companys application for an exploitation permit for Escobal. All
administrative steps for approval have now been completed by MEM. The MEM
Minister and President Perez have advised the Company that the exploitation
permit for Escobal will be issued in 2013 prior to mill commissioning at
Escobal.

The Escobal project is currently in the exploration, development,
  and construction phase which activities are permitted by both MEM and Ministerio
  de Ambiente y Recursos Naturales (MARN). However, as Escobal is
  the Companys sole project, failure to obtain the exploitation permit in
  time for mill commissioning would have a material adverse effect on the Companys
  business. There can be no assurance as to when or if the necessary exploitation
  permit will be granted. See Project Status and Timeline in this
  MD&A.

|March 7, 2013 | 
|------------- | 

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| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

Concession Filings

The three exploration concessions (Oasis, Lucero, Andres) that
were transferred from Goldcorp to Tahoe in June 2010 remain in good standing.
Environmental management plans for proposed drilling in these concessions have
been approved by MARN and all targets within these areas are approved for
drilling. In May 2012, MEM approved the San Juan Bosco exploration concession.
All other concessions are pending approval by MEM before an application can be
made for drilling. After moratorium-related inactivity within MEM in 2011,
preparations for concession granting proceeded in 2012. The Company expects that
the El Olivo exploration concession and the Soledad reconnaissance concession
will be approved in 2013.

Power Line

The Company has secured all necessary permits to construct the
69 kV power line from the San Rafael substation 5.6 kilometres from the Escobal
site, but organized resistance has impeded the Companys attempts to install the
line along an approved right of way. Objections to construction of the power
line range from claims of negative health effects of electricity to general
fears of contamination caused by mining. The Company believes these claims are
unfounded and without merit.

On September 17, 2012, installation work along the easement
ceased when an estimated 300 people threatened the power line crew, Company
employees, corporate counsel and a local judge with violence.

On the morning of September 18, 2012, armed protestors
reorganized at the mine site, and after a five-hour standoff with local police
and project security, broke through the property gates. The protestors fired
guns, burned a temporary core shed and vandalized vehicles and the cement batch
plant. National government officials reacted promptly to requests from the local
mayor, governors and Company representatives to intervene appropriately and
apprehend the violent offenders. There was no damage to any of the permanent
mine facilities, and three minor injuries were reported.

The Company has learned that the September 17 and 18, 2012,
protestors were not from the local area. Authorities identified them as
individuals transported into the area from outside regions, organized and funded
by local and international NGOs.

Local law enforcement authorities have charged 27 individuals
with assault, resisting arrest, arson, and breaking and entering. A trial date
is expected to be set in the first half of 2013. Given the civil unrest, the
Company has increased security and has developed a contingency plan to provide
temporary generator power for the mine start-up in order to prevent delay to the
production schedule.

Subsequent Events

January 12, 2013
Attack:On the night of January 12, 2013 armed criminals ambushed
a contract security team on duty at the project. Two guards were killed and
several others were injured.

The Escobal security team and National
  Police repelled the attackers who left behind numerous automatic weapons and
  incendiary devices. According to Guatemala news reports, a high-ranking government
  official close to the investigation stated that this was not a local protest
  but an organized, nighttime incursion by a well-armed group from outside the
  area. This was one of three attacks against mining entities
in Guatemala during the same week. The Company is cooperating with the
authorities to apprehend the perpetrators.

|March 7, 2013 | 
|------------- | 

---

| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

Actions by opponents, protesters and
anti-mining NGOs did not have a material adverse effect on our operations at
Escobal or on our financial position, cash flow and results of operations.

Appointment of New
CFO:On March 7, 2013, the Board of Directors accepted the
resignation of the Companys CFO, Jaime Mondragón, effective at midnight on
March 8, 2013 and appointed Mark Sadler to be the new CFO, effective March 9,
2013. Mr. Sadler joined the Company in 2012 as vice president of metal sales and
concentrate marketing following employment with Glencore Ltd. and over 18 years
with Rio Tinto, PLC. He holds an MBA from Westminster College and a bachelor
degree in accounting from the University of Utah. Mr. Sadler is a member of the
American Institute of Certified Public Accountants.

UNDERGROUND DEVELOPMENT AND CONSTRUCTION

The operations group focused on development activities
including underground development work, mill construction, and development of
surface and ancillary facilities.

In 2012, total primary and secondary underground development
advance was 4,817 metres. Progress in development was slowed when the declines
occasionally intersected north-south trending water-bearing structures.
Additional surface dewatering wells were completed and pumping has succeeded in
the drawdown of their perched water, resulting in improved advance rates.
Development costs have been higher than originally forecast, but are within the
contingency allowance provided in the capital cost estimate. The mine is
currently cross-cutting the vein on the 1,290-metre level and the Company is
planning primary stope development for the first quarter of 2013.

Surface development priorities include completion of concrete
foundations, steel erection, equipment installation in the process plant, dry
tailings disposal site, and support facilities such as offices and shops.
Foundations in the crushing and grinding, flotation, and concentrate and
tailings filtration areas were completed and mechanical installation of process
plant equipment continued on schedule. Site electrical progress also
continued.

The Company remains on schedule and on budget for mill
commissioning in the second half of 2013, at which time, mine production is
expected to commence at the 1,265-metre underground level before ramping up to
full production in early 2014. Mill operations and tailings disposal are subject
to receiving the exploitation license.

As at December 31, 2012, project procurement and major
equipment delivery-date forecasts remained on schedule. Despite financial
difficulties experienced by the manufacturer, delivery of parts for the mine
backfill paste plant was completed by year end. Paste plant construction is
expected to be completed in the second quarter of 2013.

M3 Engineering has been performing EPCM services for the
Escobal project since 2010. M3s design, procurement, and management of project
construction continued throughout the year and as at December 31, 2012, the EPCM
work was 69% complete and underground development was 70% complete

Mine activities are now focused on completion of the 1,290 and
  1,265 metre level footwall laterals, primary decline development to deeper mine
  levels, preparation of the initial production stopes, development of ventilation,
  backfill and other supporting infrastructure, and production miner training.

|March 7, 2013 | 
|------------- | 

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| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

PROJECT STATUS AND TIMELINE

The Company expects to receive the exploitation permit in first half of 2013. The exploitation permit is required for the Company to operate the mill and to produce concentrates from the mine. All other permits required for continued exploration,
construction and operations are in place.  See "Government, Permitting And Community Relations -  Exploitation Permit" and "Risk Factors -  Obtaining and Renewing Licenses and Permits" in this MD&A.

The exploitation permit is required for the Company to operate the mill and to produce concentrates from the mine, and the Company's ability to generate revenue is currently dependent upon such operation and production at Escobal. If the
exploitation permit for Escobal is not received in time for mill commissioning, the Company will be unable to generate revenue. As a result and under such circumstances, if the exploitation permit is not received within a reasonable period of time
thereafter, the Company expects this would adversely impact its business, results of operations, financial performance and prospects and may result in reduction of workforce at the project.

Mill commissioning is currently projected to start in the second half of 2013 with commercial production expected in early 2014. The Board has approved the Company's plan to continue Escobal project development for the 4500 mtpd case along the
guidelines provided for in the 5-year plan outlined in the May 2012 PEA and subject to receipt of the Escobal exploitation permit. Work on the expansion began in 2012 with production in excess of 3500 metric tons per day expected as early as 2015. A
decision to expand beyond 4500 metric tons per day is expected to be considered, subject to positive exploration results over the next several years.

|RISK FACTORS
|------------

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

DEPENDENCE ON THE ESCOBAL PROJECT

As an exploration and evaluation stage company, we do not anticipate receiving revenue from the Escobal project until late in the second half of 2013. Until we acquire additional property interests, any adverse development affecting the Escobal
project could have a material adverse effect upon the Company and would materially and adversely affect the potential production of Mineral Resources, profitability, financial performance and results of operations of the Company.

OPERATIONS IN GUATEMALA

The Escobal project is located in Guatemala. Guatemala 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 constitutional government was not restored until 1985.  Continued political unrest or a political crisis in Guatemala could adversely affect our business and results of
operations.

Our business may be exposed to a number of risks and uncertainties,
  including terrorism and hostage taking, military repression, expropriation or
  nationalization without adequate compensation, labour unrest, high rates of
  inflation, changes to royalty and tax regimes, extreme fluctuations in currency
exchange rates, volatile local, political and economic developments, difficulty with understanding and complying with the regulatory and legal framework respecting the ownership and maintenance of mineral properties, surface rights, mines and mining
operations, and difficulty obtaining key equipment, operating supplies and components for equipment.

|March 7, 2013 | 
|------------- | 

---

| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

OBTAINING AND RENEWING LICENSES AND PERMITS

Any unexpected refusals of required licenses or permits or delays or costs associated with the licensing or permitting process, and in particular delay of the exploitation permit beyond the time for mill commissioning in the second half of 2013,
could prevent or delay the development or impede the operation of a mine, which could adversely impact our operations and profitability.

ANTI-MINING RESISTANCE

In recent months outlier communities and non-governmental organizations ("NGOs") have become more vocal and active with respect to mining 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 in Guatemala. Such actions by communities and NGOs may have a material adverse
effect on our operations at the Escobal project and on its 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 production
will begin as anticipated or at all or that anticipated production costs will be achieved. Failure to commence production would have a material adverse impact on the Company's ability to generate revenue and cash flow to fund operations.
Failure to achieve the anticipated production costs would have a material adverse impact on the Company's cash flow and future profitability.

Factors that influence the Company's ability to succeed are more fully described in the Company's 2012 Annual Information Form available on www.sedar.comunder the heading "Description of Our Business -  Risk
Factors".

|SELECTED FINANCIAL INFORMATION
|------------------------------

BASIS OF PRESENTATION

The financial information and the 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, 2012 and 2011.  The Company has chosen to expense all exploration, evaluation and underground project development costs, except those costs associated with mineral property acquisition, surface
rights purchases, major equipment, buildings, and accrued reclamation, all of which are capitalized. These accounting policies have been followed consistently since incorporation in 2009.

|March 7, 2013 | 
|------------- | 

---

| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

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):

TotalInterest
    
    
    Net income
    
    
    Net loss per
    
    
    Total
    
    
    shareholdersQuarters ended
    
    income
    
    
    (loss)
    
    
    common share
    
    
    assets
    
    
    equityMarch 31, 2011
    
    1,030
    
    
    227
    
    
    0.00
    
    
    977,034
    
    
    970,567June 30, 2011
    
    1,027
    
    
    (13,338
    )
    
    (0.09
    )
    
    967,778
    
    
    960,861September 31, 2011
    
    972
    
    
    (39,106
    )
    
    (0.27
    )
    
    932,784
    
    
    924,208December 31, 2011
    
    934
    
    
    (16,949
    )
    
    (0.12
    )
    
    922,005
    
    
    911,654March 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
    
    
    831,297


Since acquisition of the Escobal project and Initial Public
Offering (IPO) completion in June 2010, the Company has expanded Escobal project
site activities and has 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 share based
payments, interest income on fluctuating cash balances, foreign exchange gains
(losses) from Canadian dollar holdings, and exploration drill programs.

SELECTED ANNUAL INFORMATION

Selected consolidated financial information from continuing
operations for 2012, 2011 and 2010 is as follows (expressed in thousands of
United States dollars, except per share information):

|                                   |   | December 31, |   |   | December 31, |   |   | December 31, |  
|---------------------------------- | - | ------------ | - | - | ------------ | - | - | ------------ | -
|                                   |   | 2012         |   |   | 2011         |   |   | 2010         |  
|Loss for the year                  | $ | 93,453       |   | $ | 69,166       |   | $ | 8,010        |  
|Loss per share  basic and diluted | $ | (0.65        | ) | $ | (0.48        | ) | $ | (0.12        | )
|Total assets                       | $ | 852,943      |   | $ | 922,005      |   | $ | 958,120      |  
|Long-term
      liabilities        | $ | 4,721        |   | $ | 540          |   | $ | 269          |  

Since acquisition of the Escobal project and Initial Public
Offering (IPO) completed in June 2010, the Company has expanded Escobal project
site activities and has incurred significant operation and exploration expenses,
advancing underground development and construction of support facilities and
process plant.

RESULTS OF OPERATIONS FOR THE FOURTH QUARTER

The following results of operations provide information on
expenses incurred in the quarters ended December 31, 2012 and 2011.

Exploration expense for the fourth quarter of 2012 was $0.9 million.
  A total of 5 exploration holes for 2,662 metres were drilled at Escobal for
  the period. On a regional basis, field work over a number of exploration and
  reconnaissance concessions is aimed at developing target areas for additional
  drilling.

|March 7, 2013 | 
|------------- | 

---

| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

Exploration expense for the fourth quarter of 2011 was $3.2
million and consisted primarily of a total of 27 holes for 13,317 metres that
were drilled at Escobal, focused on wide-spaced lateral and down-dip extensions
in the East zone and deep infill and depth-extension holes in the western
Margarito and Central zones which succeeded in expanding the known limits of the
Escobal down-dip and laterals from the previously defined resource limits.

During the fourth quarter of 2012 and 2011, the Company
incurred Escobal project expenses of $20.0 million and $15.9 million,
respectively. Variations in general site and mine infrastructure between the
fourth quarter of 2012 and 2011 can be attributed to a change in site
activities, primarily more extensive underground development work in 2012, 1,482
metres against 382 metres in the same period in 2011. Site infrastructure has
been capitalized in the 2012 period. Project cash and non-cash expenses for the
fourth quarter are:

Cash expenses
    
    2012
    
    
    2011General site infrastructure
    $
    -
    
    $
    4,427Mine infrastructure
    
    4,335
    
    
    7,670Engineering and design
      studies
    
    805
    
    
    345Mine adm inistration and other direct costs
    
    8,128
    
    
    423Salaries, w ages and benefits
    
    4,547
    
    
    1,964Total cash expenses
    
    17,815
    
    
    14,829Non-cash expensesShare-based paym ents
    
    (8
    )
    
    295Depreciation
    
    2,229
    
    
    731Total project expenses
    $
    20,036
    
    $
    15,855


Additionally, during the fourth quarter of 2012 and 2011,
corporate administration expenses were $4,248 and $4,704, respectively. These
include non-cash compensation expense of $1,295 in 2012 and $2,719 in 2011. 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 earned by the Company on its cash balances for
the fourth quarter of 2012 was $85, compared to $934 for the fourth quarter of
2011.

Foreign exchange loss of $0.01 million and a gain of $6.3
million were recorded for the fourth quarter of 2012 and 2011, respectively.
These resulted from the appreciation and depreciation of the Canadian dollar
against the US dollar applicable to the Companys Canadian dollar holdings at
the end of the respective periods.

|March 7, 2013 | 
|------------- | 

---

| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

Selected consolidated financial information from operations for
the quarters ended December 31, 2012 and 2011 follows (expressed in thousands of
United States dollars, except per share information):

4th Quarter endedDecember 31,
    
    
    December 31,2012
    
    
    2011Share-based compensation
    $
    1,287
    
    $
    3,064Corporate G&A
    
    2,953
    
    
    1,995Escobal project expenses
      (cash)
    
    17,815
    
    
    14,829Depreciation
    
    2,229
    
    
    731Exploration expenses
    
    897
    
    
    3,21625,181
    
    
    23,835Foreign exchange (gain) loss
    
    12
    
    
    (6,318
    )Interest income
    
    (85
    )
    
    (934
    )Income tax expense (benefit)
    
    (201
    )
    
    348Other expenses
    
    14
    
    
    18Loss (gain) for the period
    $
    24,921
    
    $
    16,949Loss per share  basic
    $
    (0.17
    )
    $
    (0.12
    )Loss per share  diluted
    $
    (0.17
    )
    $
    (0.12
    )Total assets
    $
    852,943
    
    $
    922,005Long-term liabilities
    $
    4,721
    
    $
    540


CASH FLOW

Operating activities reported a net cash outflow of $26.9
million in the fourth quarter of 2012 compared to $19.3 million in the same
quarter of 2011. Fourth quarter investing activities in 2012 amounted to $34.0
million primarily in capitalized property, plant and equipment, which compares
to $40.8 million in the fourth quarter of 2011.

Financing activities in the fourth quarter of 2012 generated a
net $0.4 million, whereas $2.1 million was generated in the same period of 2011.
Cash generated from financing activities in 2012 resulted from the exercise of
employee stock options and in 2011 from the exercise of underwriter
warrants.

SUMMARY OF OPERATING RESULTS YEARS ENDED DECEMBER 31, 2012
AND 2011

Selected consolidated financial information from operations for
the years ended December 31, 2012 and 2011 follows (expressed in thousands of
United States dollars, except per share information):

December 31,
    
    
    December 31,2012
    
    
    2011Escobal project expenses
    $
    70,945
    
    $
    39,564General and administrative expenses
    
    19,021
    
    
    19,092Exploration expenses
    
    10,613
    
    
    10,039Operating loss
    
    100,579
    
    
    68,695Foreign exchange (gain) loss
    
    (5,423
    )
    
    4,000Interest income
    
    (1,407
    )
    
    (3,963
    )Income tax expense (benefit)
    
    (310
    )
    
    406Other expense
    
    14
    
    
    28Loss for the year
    $
    93,453
    
    $
    69,166


|March 7, 2013 | 
|------------- | 

---

| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

Included in the operating loss for the year are non-cash items
related to share based payments and depreciation which are included in the
following line items:

December 31,
    
    
    December 31,2012
    
    
    2011Share-based paymentsEscobal project
      expenses
    $
    849
    
    $
    1,299General and administrative expenses
    
    8,011
    
    
    10,740$
    8,860
    
    $
    12,039DepreciationEscobal project expenses
    
    6,869
    
    
    1,200


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 2012
and 2011 was $10.6 million and $10.0 million respectively.

During 2012, the Company incurred $63.2 million in cash-related
Escobal Project expenses. These expenses included $35.9 million in underground
infrastructure and development, $2.4 million in engineering studies and
metallurgical test work, $25.0 million in site general administration and
operation. During 2011, the Company incurred $37.1 million in cash Escobal
Project expenses included: $10.1 million which were recorded as general site
infrastructure; $14.5 million in underground and surface infrastructure; $2.0
million in engineering studies and metallurgical drilling; $7.3 million in other
direct costs; and $3.2 million on salaries, wages and benefits to employees.

In addition to providing annual salaries to employees, the
Company compensated directors and employees in the form of stock options, common
shares, 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
expenses of $8.9 million and of $12.0 million were recognized during 2012 and
2011, respectively.

Corporate administration expense in 2012, excluding the
non-cash compensation expenses noted above, was $11.0 million compared to $8.4
million in 2011. 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 earned by the Company on its cash balances for
2012 was $1.4 million and $4.0 million in 2011.

Foreign exchange gains and losses resulted from the
appreciation and depreciation of the Canadian dollar against the US dollar
applicable to the Companys Canadian dollar cash and cash equivalent balances at
the end of 2012 and 2011. The Company recorded an exchange rate gain of $5.4
million in 2012 and an exchange rate loss of $4.0 million in 2011.

|March 7, 2013 | 
|------------- | 

---

| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

CASH FLOW

Operating activities reported a net cash outflow of $87.8
million in 2012 compared to $49.5 million in 2011. Increased outflow from
operations resulted primarily from commencement of underground development in
2011, continuing on into 2012 with, construction and surface development
expenses.

2012 investing activities consisted primarily of capitalized
property, plant and equipment and amounted to $107.9 million, which compares to
$47.9 million capitalized in 2011.

Cash proceeds from financing activities in 2012 generated $5.0
million and resulted from the exercise of Underwriter warrants and the issuance
of common shares, whereas financing activities in 2011 generated a net $14.7
million.

LIQUIDITY AND CAPITAL RESOURCES

The Companys cash and cash equivalents balance as at December
31, 2012 was $164.6 million.

The Company had working capital of $149.3 million and long-term
liabilities of $4.7 million as at December 31, 2012, consisting primarily of
accrued reclamation obligations. This compares to working capital of $340.3
million on December 31, 2011, a decrease of $191.0 million. This decrease was
primarily due to a decrease in cash and cash equivalents of $185.3 million. Of
this amount $87.3 million was spent in the operations and $110.7 million in
plant and equipment additions, and land acquisitions. This was partially offset
by $5.0 million of cash inflows through warrants and employee stock option
exercises and $5.4 million in foreign exchange gains.

Estimated expenditures remaining for project completion total
$117.3 million, which consist primarily of budgeted project construction for the
3500 mtpd project and for the expansion to 4500 mtpd. It is the opinion of
management, based on the Companys current liquidity position and estimates of
remaining project expenses, that the Companys liquid assets will be sufficient
to discharge liabilities and fund the Escobal project through development and
mill commissioning in the second half of 2013.

The Company is in the process of obtaining a banking credit
line for approximately $50 million to be implemented in the first half of 2013.
The proceeds are intended to provide additional working capital to fund the 4500
mtpd expansion project which was approved in May 2012.

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.

|March 7, 2013 | 
|------------- | 

---

| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

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, 2012 and
2011 includes accounts payable and accrued liabilities all of which are due
within 6 months or less. The long-term liability consists of the SARS long-term
portion, severance and reclamation provision.

Over
    
    
    December
      31,
    
    
    December
      31,1 year
    
    
    2-5
      years
    
    
    5
      years
    
    
    2012
    
    
    2011Accounts payable and accrued liabilities
    $
    16,925
    
    $
    -
    
    $
    -
    
    $
    16,925
    
    $
    9,811Lease agreements for rental of office facilities
    
    576
    
    
    315
    
    
    -
    
    
    891
    
    
    1,348Commitment to purchase plant and equipment
    
    65,366
    
    
    -
    
    
    -
    
    
    65,366
    
    
    58,403Other long-term liabilities
    
    -
    
    
    1,030
    
    
    -
    
    
    1,030
    
    
    540Reclamation and closure cost obligations
    
    -
    
    
    -
    
    
    3,691
    
    
    3,691
    
    
    -Total
    $
    82,867
    
    $
    1,345
    
    $
    3,691
    
    $
    87,903
    
    $
    70,102


As at December 31, 2012, the Company has outstanding
commitments to purchase equipment, services, materials and supplies as
follows:

December 31,2012Plant construction and equipment
    $
    50,779Underground and surface equipment
    
    6,028Mine development consumables
    
    7,448Services and others
    
    1,077Business system implementation
    
    34Total commitments
    $
    65,366


|March 7, 2013 | 
|------------- | 

---

| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

In the ordinary course of business, mining companies are
required to seek approvals and permits, Escobal is the Companys sole project,
and failure to obtain the exploitation permit in time for mill commissioning
would have a material adverse effect on the Companys business, and could create
liquidity challenges. There can be no assurance as to when or if the necessary
exploitation permit will be granted.

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.

The Company holds the majority of its cash and cash equivalents
in CAN and USD 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, 2012, the Company has converted
substantially all of CAN$ to US$ to minimize exchange rate risk during the
construction period.

December
      31,
    
    
    December
      31,2012
    
    
    2011Cash and cash equivalents in
      US$
    $
    163,518
    
    $
    49,799Cash in CAN$
    
    458
    
    
    299,255Cash in other currencies
    
    585
    
    
    783Total Cash and Cash Equivalents
    $
    164,561
    
    $
    349,837


Cash and cash equivalents comprise cash balances and deposits
with maturities of 90 days or less and Guarantee Investment Certificates (GICs)
callable on demand.

December
      31,
    
    
    December
      31,Cash
      and Cash Equivalents
    
    2012
    
    
    2011Cash in US$
    $
    146,585
    
    $
    138,315Cash
      equivalents
    
    17,975
    
    
    211,522Total Cash and Cash Equivalents
    $
    164,561
    
    $
    349,837




|March 7, 2013 | 
|------------- | 

---

| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

Interest Rate Risk

At the reporting date, the Companys interest-bearing financial
instruments are related to cash and cash equivalents only.

SHARE CAPITAL AND FINANCINGS

As at March 7, 2013, the Company had 145,565,204 issued and
outstanding common shares.

ASSET VALUATION

There have been no events or changes in circumstances that
would indicate an impairment of the Escobal project as at December 31, 2012.

OFF-BALANCE SHEET ARRANGEMENTS

The Company currently has no other off-balance sheet
arrangements.

OUTSTANDING SHARE DATA

As at March 7, 2013, the Company had the following common
shares and securities convertible into common shares outstanding:

Common shares issued prior to IPO
    
    3,100,001Common shares issued in IPO, Escobal project acquisition
      and related activities
    
    113,272,304Common shares issued in equity financing
    
    24,959,692Common shares issued after exercise of Underwriter warrants
      and stock options
    
    4,069,207Common shares issued under RSA and DSA
      compensation plan
    
    164,000Stock options (vested and unvested) outstanding
    
    216,000DSAs outstanding
    
    318,000Fully diluted shares outstanding
    
    146,099,204


CRITICAL ACCOUNTING ESTIMATES

Critical accounting estimates used in the preparation of the
financial statements include the Companys review of asset carrying values, the
determination of impairment charges of long-lived assets, determination of
mineral resources and valuation of share-based payments, the determination of
amounts accrued for reclamation obligations, and income tax. The estimates of
carrying values for the assets and expenses involve considerable judgment and
are, or could be, affected by significant factors that are out of the Companys
control. Actual results could differ from those estimates.

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 included in the
following notes of the financial statements:

Note 4  Mineral property, land, plant
and equipment; Note 5  Reclamation provision; Note 6  Share based
payments; and
  Note 16  Income tax.

|March 7, 2013 | 
|------------- | 

---

| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

MINERAL PROPERTY, LAND, PLANT AND EQUIPMENT

The Company considers both external and internal sources of information in assessing whether there are any indications that mining interests are impaired. External sources of information the Company considers include changes in the market, economic
and legal environment in which the Company operates that are not within its control and affect the recoverable amount of mining interests. Internal sources of information the Company considers include the manner in which mining properties and plant
and equipment are being used or are expected to be used and indications of economic performance of the assets. In determining the recoverable amounts of the Company's mining interests, the Company's management makes estimates of the
discounted future after-tax cash flows expected to be derived from the Company's mining properties, costs to sell the mining properties and the appropriate discount rate. Reductions in metal price forecasts, increases in estimated future costs
of production, increases in estimated future non-expansionary capital expenditures, reductions in the amount of recoverable reserves, resources, and exploration potential, and/or adverse current economics can result in a write-down of the carrying
amounts of the Company's mining interests.

RECLAMATION AND CLOSURE

The Company has an obligation to reclaim its properties. The Company's provision for reclamation and closure cost obligations represents management's best estimate of the present value of the future cash outflows required to settle the
liability which reflects estimates of future costs, inflation, movements in foreign exchange rates, assumptions of risks associated with the future cash outflows and assumptions of probabilities of alternative estimates of future cash outflows, and
the applicable risk-free interest rates for discounting those future cash outflows. Significant judgments and estimates are required in forming assumptions of future activities, future cash outflows and the timing of those cash outflows. These
assumptions are formed based on environmental and regulatory requirements or the Company's environmental policies which may give rise to a constructive obligation. The Company's assumptions are reviewed at the end of each reporting
period and adjusted to reflect management's current best estimate and changes in any of the above factors can result in a change to the provision recognized by the Company as at December 31, 2012.

The Company recognizes the present value of liabilities for reclamation and closure costs in the period in which they are incurred. A corresponding increase in the carrying amount of the related assets is recorded and amortized over the life of the
asset.  As at December 31, 2012 the Company has estimated the present value of the future reclamation obligation arising from its activities to be $3,691. The present value calculation assumes a discount rate of 2.30%, an inflation rate of
2.87%, an undiscounted amount to settle the obligation of $5,689 and the commencement of reclamation activities in 18 years. Reclamation liability as at December 31, 2011 was negligible as there had been no significant disturbance at the Escobal
mine site at that time.

SHARE BASED PAYMENTS

The factors affecting share-based expenses include estimates
  of when stock options might be exercised and stock price volatility. The timing
  of the exercise of options is out of the Company's control and will depend,
  among other things, upon a variety of factors including the market value of
  Company shares and financial objectives of the holders of the options. The Company
  has no internal historical data available to determine volatility in accordance
  with Black-Scholes modeling so it has included data of companies with similar
  assets. However, the future volatility is inherently uncertain and the model
  has its limitations. While these estimates can have a material impact on the
  share-based payments expense and hence results of operations, there is no impact
  on the Company's financial condition or liquidity.

|March 7, 2013 | 
|------------- | 

---

| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

INCOME TAXES

In assessing the probability of realizing income tax assets recognized, management makes estimates related to expectations of future taxable income, applicable tax opportunities, expected timing of reversals of existing temporary differences and the
likelihood that tax positions taken will be sustained upon examination by applicable tax authorities.  In making its assessments, management gives additional weight to positive and negative evidence that can be objectively verified.  Estimates of
future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. Forecasted cash flows from operations are based on the life of mine projections internally developed and reviewed
by management.  Weight is attached to tax planning opportunities that are within the Company's control, and are feasible and implementable without significant obstacles. The likelihood that tax positions taken will be sustained upon
examination by applicable tax authorities is assessed based on individual facts and circumstances of the relevant tax position evaluated in light of all available evidence. Where applicable tax laws and regulations are either unclear or subject to
ongoing varying interpretations, it is reasonably possible that changes in these estimates can occur that materially affect the amounts of income tax assets recognized. At the end of each reporting period, the Company reassesses unrecognized income
tax assets.

RELATED PARTY TRANSACTIONS

Goldcorp holds a 40% interest in the Company's publicly traded shares on a fully-diluted basis. There were no related-party transactions in 2012 and 2011 with Goldcorp.

|DISCLOSURE CONTROLS AND PROCEDURES
|----------------------------------

Our management, including the Chief Executive Officer and the Chief Financial Officer, acknowledge responsibility for the design of disclosure controls and procedures.

Having assessed the effectiveness of the Company's disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer believe that the disclosure controls and procedures are effective at a reasonable assurance level as
of the end of the period covered by this report.

|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.

|March 7, 2013 | 
|------------- | 

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| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

CHANGES IN INTERNAL CONTROLS

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

The Company's management, including the Chief Executive Officer 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.

|CHANGES IN ACCOUNTING STANDARDS
|-------------------------------

For a detailed description of the changes in accounting standards effective January 1, 2012 and January 1, 2013, please refer to Note 2 -  Significant accounting policies of the financial statements.

|ADDITIONAL INFORMATION
|----------------------

Tahoe is a Canadian public mineral exploration and development 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.

|CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
|---------------------------------------------------

FORWARD-LOOKING STATEMENTS

This MD&A contains "forward-looking information"
  within the meaning of applicable Canadian securities legislation and "forward
  looking statements" within the meaning of Unites States Private Securities
  Litigation Reform Act of 1995 (collectively referred to as "forward-looking
  information"). Wherever possible, words such as "plans", "expects",
  or "does not expect", "budget", "scheduled",
  "estimates", "forecasts", "anticipate" or
  "does not anticipate", "believe", "intend"
  and similar expressions or statements that certain actions, events or results
  "may", "could", "would", "might"
  or "will" be taken, occur or be achieved, have been used to identify
  forward-looking information.

|March 7, 2013 | 
|------------- | 

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| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

Forward-looking information in this MD&A may include, but is not limited to: statements relating to changes in Guatemalan mining laws and regulations, including the expected terms and timeline for finalization of the Escobal Royalty Agreement;
information with respect to our future financial and operating performance and that of our subsidiaries, including our statement that our objective is to develop the Escobal project into a profitable silver mining operation; the estimation of
mineral resources and our realization of mineral resource estimates; our statements relating to the assessment of mineralization such mineralization warranting further drilling of the property; our plan to pursue the exploration, permitting,
engineering and development of the Escobal project and to expand its resource base; costs, including projected operating costs, and timing of development of the Escobal project, including the resumption of work on and the completion of the power
line, commencing mill commissioning in the second half of 2013, completion of paste plant construction in the second quarter of 2013, underground development and the plan for primary stope development in the first quarter of 2013, mill start up and
full production and statements related to commencing commercial production by early 2014 and achieving production in excess of 3500 metric tons per day and in particular statements relating to project economics, production and timing for the 4500
metric tons per day scenario and timing for the 5500 metric tons per day scenario; the timing for receiving revenue from the Escobal project; 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 including the expected timeline for receiving the exploitation permit for the Escobal project
and permits for other mining property concessions; 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.

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 project and our
  limited operating history, risks associated with the fluctuation of the price
  of silver and other metals, the risk of unrest and political instability in
  Guatemala, the risk that an exploitation license and environmental permits for
  development of the Escobal project cannot be obtained, 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,
  legislative, judicial and litigation risks, the risk that dividends may never
  be declared, risks associated with the repatriation of earnings, risks of continued
  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.

|March 7, 2013 | 
|------------- | 

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| | Managements Discussion and
      Analysis 
      for Year Ended December 31, 2012
| | ----------------------------------------------------------------------------------

This forward-looking information is 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.

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.

|March 7, 2013 | 
|------------- | 

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