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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 20-F/AAmendment No. 1

(Mark One)

[ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
OF THE SECURITIES EXCHANGE ACT OF 1934

OR

[ x ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,
2008

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from
_____________ to______________

[ ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring shell company report ________________________________________

Commission file number 0-26424

SILVER STANDARD RESOURCES
INC.(Exact name of Registrant as specified in its
charter)

________________________________________
  (Translation of Registrants name into English)

British Columbia, Canada(Jurisdiction of
incorporation or organization)

Suite 1400  999 West Hastings Street, Vancouver, British
  Columbia V6C 2W2(Address of principal executive offices)

Securities registered or to be registered pursuant to Section
12(b) of the Act.

|Title of each class             | Name of each exchange on which registered
|------------------------------- | -----------------------------------------
|Common Shares without par value | Nasdaq Global Market                     

Securities registered or to be registered pursuant to Section
12(g) of the Act.

None(Title of Class)

Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act.

None(Title of Class)

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Indicate the number of outstanding shares of each of the
issuer's classes of capital or common stock as of the close of the period
covered by the annual report.62,755,547

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.[ x ] Yes[ ]
No

If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934.[ ] Yes[ x ] No

Note  Checking the box above will not relieve any registrant
required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.[ x ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of accelerated filer and large accelerated filer in Rule 12b-2 of
the Exchange Act. (Check one):

|Large accelerated filer [ x ] | Accelerated filer [ ] | Non-accelerated filer [ ]
|----------------------------- | --------------------- | -------------------------

Indicate by check mark which financial statement item the
Registrant has elected to follow. [ ] Item 17[ x ] Item 18

If this is an annual report, indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). [ ] Yes[ x ] No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)

Indicate by check mark whether the Registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.[ ] Yes[ ] No

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EXPLANATORY NOTE

Effective January 1, 2009, the Registrant changed its
functional and reporting currency to United States dollars and also
retrospectively adopted APB 14-1, Accounting for convertible debt instruments
that may be settled in cash upon conversion (including partial cash settlement)
and SFAS 160, Non-controlling interested in consolidated financial statements
for U.S. GAAP purposes. The sole purpose of filing this Amendment No. 1 to the
Annual Report on Form 20-F of Silver Standard Resources Inc. is to provide
financial statements and related disclosures in United States dollars. We have
amended Part I, Item 5 (Operating and Financial Review and Prospects) and Part
II, Item 18 (Financial Statements) and Item 19 (Exhibits) in their entirety to
conform to a reporting currency in United States dollars. Except as described
above, no other changes have been made to the Annual Report on Form 20-F for the
fiscal year ended December 31, 2008 and, other than as expressly set forth
above, this Amendment No. 1 does not, and does not purport to, update or restate
the information in any Item of the Form 20-F or reflect any events that have
occurred after the Form 20-F was filed.

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PART II

|Item 5 | Operating and Financial Review and
      Prospects
|------ | --------------------------------------------------

Operating Results

We are a development stage company that since 1994 has
assembled a portfolio of silver-dominant projects which are located in seven
countries in the Americas and Australia. We are now focused on advancing our
five principal projects, the Pirquitas Project, the San Luis Project, the
Pitarrilla Project, the Diablillos Project and the Snowfield Project, to
commercial production. Currently we are completing the construction of our
Pirquitas Project located in the province of Jujuy in northwest Argentina. In
aggregate, we own what we believe to be the largest in-ground silver resource of
any publicly-traded primary silver company. Certain of our projects also contain
significant gold resources. We may opportunistically monetize certain of our
other assets. Our common stock is quoted on the Nasdaq Global Market under the
trading symbol SSRI and listed on the Toronto Stock Exchange under the symbol
SSO.

This management discussion and analysis (MD&A) of the
financial position and operating results of the company for the twelve months
and three months ended December 31, 2008 and 2007 is prepared as of March 10,
2009 and should be read in conjunction with the audited consolidated financial
statements and the related notes thereto, which have been prepared in accordance
with Canadian generally accepted accounting principles. All dollar amounts
referred to in this discussion and analysis are expressed in US dollars except
where indicated otherwise. Additional information relating to us, including our
annual information form, is available free of charge on our website at www.silverstandard.com, on the Canadian Securities
Administrators (CSA) website at www.sedar.com, and on the EDGAR section of the SECs
website at www.sec.gov.

Effective January 1, 2009, we changed our measurement and
reporting currency from the Canadian dollar to the US dollar as a result of a
change in the nature of our operations. Due to the development of the Pirquitas
project as well as our other principal projects in countries other than Canada,
a significant portion of costs are incurred in US dollars. Our recent debt and
equity financings were completed in US dollars, and we now hold a majority of
our cash and cash equivalents in US dollars. With commercial production
anticipated to commence at our Pirquitas project in 2009, our revenue stream
will also be denominated in US dollars. Prior to January 1, 2009, we reported
our annual and quarterly consolidated financial statements in Canadian dollars.
These financial statements and corresponding notes for periods prior to January
1, 2009 have been restated to the US dollar for comparison to 2009 financial
results.

The MD&A contains forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Actof 1995 and
Canadian securities laws concerning the anticipated developments in our
operations in future periods, our planned exploration activities, the adequacy
of our financial resources and other events or conditions that may occur in the
future. These statements relate to analyses and other information that are based
on forecasts of future results, estimates of amounts not yet determinable and
assumptions of management (see Note Regarding Forward-Looking Statements).

Pirquitas Project Construction Update

During the year, we incurred approximately $129.2 million of
capital and $17.8 million for preoperating costs as we hired personnel to begin
establishing infrastructure for operations and $7.3 million of exploration
expenditures on the Pirquitas property in Argentina.. Pirquitas is on track with
process commissioning underway and commencement of ore delivery to the silver
circuit in the first quarter of 2009. Initial production will focus on the
processing of over 400,000 tonnes of run-of-mine grade jig tails from the
historic

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operations and then transition to material from the open pit.
To date, in excess of five million tonnes of material has been moved from the
Pirquitas open pit and stockpiling of ore has commenced.

At current metal prices, the silver and tin concentrates
account for over 95% of the anticipated revenue from the mine. As a result, the
silver circuit will be optimized first, followed by the tin circuit. A decision
to complete the zinc circuit is dependent on the results of metallurgical
testwork to be received on increasing silver recoveries. Process equipment
purchased for the zinc circuit may be better served increasing the silver
recovery.

With production ramping up through Q2, Pirquitas is expected to
produce in excess of six million ounces of silver in 2009 and achieve full
production in 2010 in excess of 10 million ounces of silver.

The Pirquitas Project is located in the province of Jujuy in
northwest Argentina. In May 2008, we reported that proven and probable silver
reserves at Pirquitas have increased by 43% to 195 million ounces. Based on the
increased reserves, Pirquitas mine life has been extended to 14.5 years. The
mine is expected to produce an average of approximately 10 million ounces of
silver per year.

In February 2009, we updated the capital cost estimate for the
project to $230 million plus IVA (Argentinean value added tax) from the previous
capital cost estimate of $220 million plus IVA as inflation in wages and local
inputs continues to place pressure on costs. In developing this cost estimate in
November 2007, we estimated inflation for wages and other inputs within
Argentina significantly higher than the official rate. With inflation exceeding
company estimates, the estimated cost to complete the construction of Pirquitas
has increased to $230 million or 5% over the 2007 estimate. With eight months of
mining experience and in-country administration, the company estimates that
mining, milling and administration costs will now average $26/tonne over the
life of the mine.

As of December 31, 2008, the Company had expended $194 million
of the total estimated construction costs of $230 million.

Financial Summary for 2008

- We recorded a loss for the year of $5.9 million or $0.09 per share. Significant
    items incurred during the year include:
    $17.9 million write-down on asset-backed commercial paper;
      $9.6 million non-cash stock based compensation;
      $4.9 million mark to market write-down of marketable securities;
      $4.8 million general and administration expense;
      $3.4 million future income tax expense;
      $3.8 million financing fees associated with the convertible debt financing;
      $2.7 million interest expense on convertible debt;
      $1.2 million current income tax expense;offset by:
- $17.9 million write-down on asset-backed commercial paper;
- $9.6 million non-cash stock based compensation;
- $4.9 million mark to market write-down of marketable securities;
- $4.8 million general and administration expense;
- $3.4 million future income tax expense;
- $3.8 million financing fees associated with the convertible debt financing;
- $2.7 million interest expense on convertible debt;
- $1.2 million current income tax expense;
- $23.7 million gain on sale of silver bullion;
- $18.1 million after-tax gain on sale of the Shafter Silver Project.

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- We incurred $7.3 million (2007 - $5.8 million) for exploration, $17.8
  million (2007 - $nil) for pre- operating costs, and $129.2 million (2007 -
  $50.4 million) for construction and mining equipment at the Pirquitas property
  during the year.
- We incurred total expenditures of $36.2 million (2007 - $33.7 million) to
  advance our other key properties during the year. Significant expenditures
  include $17.3 million (2007 - $16.4 million) for exploration at the Pitarrilla
  Project in Mexico, $6.5 million (2007 - $7.6 million) for exploration at the
  San Luis Project in Peru, $5.7 million (2007 - $4.4 million) for exploration
  at the Diablillos Project in Argentina, and $4.6 million (2007 - $2.4 million)
  for exploration at the Snowfield Project in Canada.
- We successfully completed a $138 million convertible debt financing for net
  proceeds of $132.8 million after fees and commissions.
- We sold our silver bullion at an average price of $20.30 per ounce for
  proceeds of $39.6 million.
- We closed the sale of the Shafter Silver Project in Presidio County, Texas,
  to Aurcana Corporation for total consideration of $38.1 million. The
  transaction resulted in a pre-tax gain of $31.5 million (after- tax gain of
  $18.1 million).

Current Market Conditions

The global financial markets have experienced significant
events which have impacted the global economy with reduced credit availability;
higher cost of funding; high volatility in commodity prices and foreign exchange
markets; and a slowdown in general economic activity. These events could have a
significant impact on our business such as:

- The credit crisis may impact the availability and cost of financing our
  projects.
- The volatility in silver and other metal prices impacts our future
  revenues, earnings and cash flow.
- The volatility of stock markets impacts the value of our share investments.

We will continue to adopt strategies to mitigate these
challenges. In February 2009, we successfully completed a public offering of
5.45 million common shares for net proceeds of $87 million after estimated fees
and commissions.

Critical Accounting Estimates

The preparation of our consolidated financial statements
requires management to use estimates and assumptions that affect the reported
amounts of assets and liabilities, as well as revenues and expenses. Our
accounting policies are described in note 2 of our 2008 audited annual financial
statements.

Mineral Property Costs

We regularly review the net carrying value of each mineral
property for conditions that suggest impairment. This review requires
significant judgment where we do not have any proven and probable reserves that
would enable us to estimate future cash flows to be compared to the carrying
values. Factors considered in the assessment of asset impairment include, but
are not limited to, whether there has been a significant decrease in the market
price of the property; whether there has been a significant adverse change in
the legal, regulatory, accessibility, title, environmental or political factors
that could affect the propertys value; whether there has been an accumulation
of costs significantly in excess of the amounts originally expected for

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the propertys acquisition, development or cost of holding;
whether exploration activities produced results that are not promising such that
no more work is being planned in the foreseeable future and whether the Company
has significant funds to be able to maintain its interest in the mineral
property.

Where we do have proven and probable reserves, as is now the
case at our Pirquitas Project, the expected undiscounted future cash flows from
an asset are compared to its carrying value. These future cash flows are
developed from models using assumptions that reflect the long-term operating
plans for an asset given our best estimate of the most probable set of economic
conditions. Commodity prices used reflect market conditions at the time the
models are developed. These models are updated from time to time, and lower
prices are used should market conditions deteriorate. Inherent in these
assumptions are significant risks and uncertainties.

Stock-based compensation

We provide compensation benefits to our employees, directors,
officers and consultants through a stock option plan. The fair value of each
option award is estimated on the date of the grant using the Black-Scholes
option pricing model. Expected volatility is based on historical volatility of
our share price. We utilize historical data to estimate option exercises and
termination behaviour with the valuation model. The risk-free rate for the
expected term of the option is based on the Government of Canada yield curve in
effect at the time of the grant. Actual results may differ materially from those
estimates based on these assumptions.

Asset Retirement Obligations

The amounts recorded for asset retirement costs are based on
estimates included in closure and remediation plans. These estimates are based
on engineering studies of the work that is required by environmental laws or
public statements by management which results in an obligation. These estimates
include an assumption on the rate at which costs may inflate in future periods.
Actual costs and the timing of expenditures could differ from these
estimates.

Income and Resource Taxes

The determination of our future tax liabilities and assets
involves significant management estimation and judgment involving a number of
assumptions. In determining these amounts we interpret tax legislation in a
variety of jurisdictions and make estimates of the expected timing of the
reversal of future tax assets and liabilities. We also make estimates of the
future earnings which affect the extent to which potential future tax benefits
may be used. We are subject to assessment by various taxation authorities, which
may interpret tax legislation in a manner different from our view. These
differences may affect the final amount or the timing of the payment of taxes.
When such differences arise we make provision for such items based on our best
estimate of the final outcome of these matters.

Other Investments

We hold C$57,102,000 ($21,803,000 net of fair value adjustment)
in ABCP investments as at December 31, 2008. See Other Investments discussion
under Investing Activities.

As at December 31, 2008, no market quoted value was available
to determine the fair value of our ABCP investments. As such, we estimated the
fair values of our ABCP investments based on information outlined in the
Restructuring Plan and the limited market data available. Since the fair values
are based on our assessment of market conditions at December 31, 2008, the
uncertainty regarding the outcome of the restructuring plan, and the related
amount and timing of cash flows the fair value reported may change materially in
subsequent periods.

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Convertible Debenture Receivable

We follow accounting guidelines in determining the value of the
liability and equity components of the convertible debenture receivable, as
disclosed in Note 5(c) to the annual Consolidated Financial Statements. The
carrying value of the note receivable component was determined by discounting
the stream of future payments of interest and principal over a 3 year expected
life at the prevailing market rate for a similar debenture without the
conversion feature. The note receivable component is accreted over its expected
life using the effective interest method. The carrying value of the conversion
feature was measured using the Black-Scholes valuation model. The conversion
feature component is re-valued at each period end with net change recorded to
the net earnings.

Convertible Debt

We follow accounting guidelines in determining the value of the
liability and equity components of the convertible notes, as disclosed in Note 9
to the Financial Statements. The carrying value of the liability component was
determined by discounting the stream of future payments of interest and
principal over a 5 year expected life at the prevailing market rate for a
similar liability without the conversion feature. The carrying value of the
equity component was measured as the face value of the notes less the portion
relating to the debt component. We estimated the expected life of the debt based
on early repayment rights exercisable by both parties in the fifth year of the
agreement.

Managements Annual Report on Internal Control Over
Financial Reporting

The following report is provided by management in respect of
internal control over financial reporting (as defined in the rules of the CSA
and the SEC):

|(1) | Management is responsible for establishing and
      maintaining adequate internal control over financial reporting. All
      internal control systems, no matter how well designed, have inherent
      limitations and may not prevent or detect misstatements. Therefore, even
      those systems determined to be effective can provide only reasonable
      assurance with respect to financial statement preparation and
      presentation. Also, projections of any evaluation of effectiveness to
      future periods are subject to the risk that controls may become inadequate
      because of changes in conditions, or that the degree of compliance with
      the policies or procedures may deteriorate.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(2) | Our management has used the Committee of Sponsoring
      Organizations of the Treadway Commission (COSO) framework to evaluate the
      effectiveness of our internal control over financial reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(3) | As at December 31, 2008, management assessed the
      effectiveness of our internal control over financial reporting and
      concluded that such internal control over financial reporting is effective
      and that there are no material weaknesses in our internal control over
      financial reporting.                                                                                                                                                                                                                                                                                                                                                                                                            

Changes in Internal Control Over Financial
Reporting

There have been no changes in our internal control over
financial reporting during the year ended December 31, 2008, that have
materially affected, or are reasonably likely to affect our internal control
over financial reporting.

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Changes in Accounting Policies

Financial Instruments - Disclosures

Effective January 1, 2008, we adopted CICA Handbook Section
3862, Financial Instruments  Disclosures and CICA Handbook Section 3863,
Financial Instruments  Presentation. Section 3862 requires the disclosure of
quantitative and qualitative information in our financial statements to evaluate
(a) the significance of financial instruments for our financial position and
performance; and (b) the nature and extent of risks arising from financial
instruments to which we are exposed during the period and at the balance sheet
date. Managements objectives, policies and procedures for managing such risks
are disclosed in note 5(d) of the financial statements. Section 3863 replaces
the existing requirements on presentation of financial instruments.

Capital Disclosure

Effective January 1, 2008, we adopted CICA Handbook Section
1535, Capital Disclosures, which requires the disclosure of information on our
objectives, policies, and processes for managing capital. This information is
disclosed in note 13 of the financial statements.

Going Concern

Effective January 1, 2008, we adopted an amendment to CICA
Handbook Section 1400, General Standards of Financial Statement Presentation
in relation to going concern. The amendment requires management to assess an
entitys ability to continue as a going concern. When management is aware of
material uncertainties related to events or conditions that may cast doubt on an
entitys ability to continue as a going concern, those uncertainties must be
disclosed. In assessing the appropriateness of the going concern assumption, the
standard requires management to consider all available information about the
future, which is at least, but not limited to, twelve months from the balance
sheet date. This standard has no significant effect on our financial
statements.

Inventories

Effective January 1, 2008, we adopted CICA Handbook Section
3031, Inventories, which prescribes the accounting treatment for inventories
and provides guidance on the determination of costs and its subsequent
recognition as an expense, including any write-down to net realizable value. It
also provides guidance on the cost formulas that are used to assign costs to
inventories. As at December 31, 2008, we have no inventories and this standard
has no effect on our financial statements.

Income Statement Presentation of Tax Loss
Carryforward

Effective September 30, 2008, we adopted EIC-172, Income
Statement Presentation of a Tax Loss Carryforward Recognized Following an
Unrealized Gain in Other Comprehensive Income. This abstract provides guidance
on whether the tax benefit from the recognition of previously unrecognized tax
loss carryforwards consequent to the recording of unrealized gains in other
comprehensive income, such as unrealized gains on available-for-sale financial
assets, should be recognized in net income or in other comprehensive income. The
abstract should be applied retrospectively, with restatement of prior periods
from January 1, 2007, the date of adoption of CICA Handbook Section 3855,
Financial Instruments Recognition and Measurement.

The adoption of EIC-172 resulted in a reclassification of
$4,363,000 of future income tax recovery from opening accumulated other
comprehensive income to opening accumulated deficit effective January 1, 2007,

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$1,022,000 of future income tax expense from other
comprehensive loss to net loss for the year ended December 31, 2007 and
$3,393,000 of future income tax expense from other comprehensive loss to net
loss in the current year.

Recent Accounting Pronouncements

Recent accounting pronouncements issued which may impact us in
the future are as follows:

Goodwill and Intangible Assets

CICA Handbook Section 3064, Goodwill and Intangible Assets,
replaces Section 3062, Goodwill and Other Intangible Assets, and CICA Section
3450, Research and Development Costs, and EIC-27, Revenues and expenditures
during the pre-operating period. The Standard reinforces the principle-based
approach to the recognition of assets only in accordance with the definition of
an asset and the criteria for asset recognition; and clarifies the application
of the concept of matching revenues and expenses such that the current practice
of recognizing assets that may not meet the definition and recognition criteria
are eliminated. This new standard also provides guidance for the treatment of
pre-production and start-up costs and requires that these costs and related
revenues be reflected in earnings. The changes are effective for interim and
annual financial statements beginning January 1, 2009. We have not yet
determined the impact of the adoption of this change on the disclosure in our
financial statements.

International Financial Reporting Standards

We have been monitoring the deliberations and progress being
made by accounting standard setting bodies and securities regulators in Canada
and United States with respect to their plans regarding convergence to
International Financial Reporting Standards (IFRS):

- In February 2008, the Canadian Accounting Standards Board confirmed that
      publicly listed companies will be required to adopt IFRS for interim and
      annual financial statements relating to fiscal years beginning on or after
      January 1, 2011. Early adoption may be permitted, however, exemptive relief
      requires approval of the Canadian Securities Administrators.
- In August 2008, the SEC announced that it would seek public comments on
      a proposed roadmap for the potential mandatory adoption of IFRS beginning
      in 2014 for large accelerated filers, accelerated filers in 2015 and then
      remaining public companies in 2016.

In preparation for the changeover from GAAP to IFRS, we commenced the
      planning process during the second quarter of 2008. Specific initiatives
      are underway and others have been planned for the transitioning from GAAP
      to IFRS. Current status of the project is as follows:

Resources

- We have retained the service of a major public accounting firm to provide
  technical and process management assistance for the project.
- We will continue to invest in training and resources to ensure a timely and
  effective conversion.

Process

- A diagnostic assessment of the key impact areas was completed.

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- A detailed assessment of accounting and measurement differences between
  IFRS and Canadian GAAP on current accounting policies, as well as new policies
  anticipated to be implemented as we transition to a producer, is currently
  underway.
- Initial findings and observations from the work completed to date will
  serve as an input in establishing the key parameters to develop solutions
  during the design phase of the project.
- An initial assessment of exemptions available under IFRS 1, First-time
  Adoption of IFRSs, has been completed.
- A high-level impact assessment of IFRS conversion on our IT systems and tax
  processes is underway.
- Our audit committee is monitoring our progress and is kept informed of
  issues identified.
- Our external auditor is advised of the progress status and issues
  identified.

We anticipate that there will be changes in accounting policies
and these changes may materially impact our financial statements.

Financial Review

For the year ended December 31, 2008, we recorded a net loss of
$5,946,000 ($0.09 per share), compared to $33,965,000 ($0.55 per share) in 2007.
A discussion on the various components of the expense and income items compared
to the prior year follows:

Financial Results from Operations

The following is a summary and discussion on the various
components of the expenses and income items recorded during the year compared to
the prior year:

|                                             |  | Year ended December 31, |  
|-------------------------------------------- |  | ----------------------- | -
|                                             |  | 2008                    |  
|Exploration and
      mineral property costs |  | $(000                   | )
|Property examination and exploration         |  | 340                     |  
|Reclamation and
      accretion              |  | 318                     |  
|                                             |  | 658                     |  

We incurred $340,000 in property examination and exploration
expenditures in 2008 compared to $73,000 in 2007, reflecting an increase in
generative activity in Mexico.

Reclamation and accretion expense in 2008 amounted to $318,000
compared to $728,000 in 2007. The various components of the expense were:
$143,000 of accretion expense in 2008 compared to $200,000 in 2007; $84,000 of
cash site restoration and clean-up costs in 2008 compared to $126,000 in 2007;
and $91,000 due to changes in estimates of the amount or timing of future cash
expenditures in 2008 compared to $402,000 in 2007, reflecting a decrease in
reclamation activity at the Duthie project during the period.

9

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|                               |  | Year ended December 31, |  
|------------------------------ |  | ----------------------- | -
|                               |  | 2008                    |  
|Expenses                       |  | $(000                   | )
|Salaries and employee benefits |  | 3,054                   |  
|Depreciation                   |  | 288                     |  
|Professional fees              |  | 915                     |  
|General and administration     |  | 4,774                   |  
|Stock-based compensation       |  | 9,601                   |  
|Foreign exchange
      loss    |  | (200                    | )
|                               |  | 18,432                  |  

Salaries and employee benefits for 2008 were $3,054,000
compared to $2,613,000 in 2007. The $441,000 increase in salaries and benefits
over 2007 is the result of hiring additional senior staff as we continue our
transition to a producing company and the impact of salary adjustments effective
at the beginning of 2008.

Depreciation expense during 2008 was $288,000 compared to
$296,000 recorded in 2007. The decrease is minimal as no significant capital
assets were purchased at our corporate office during the year.

Professional fees include fees for the annual audit,
accounting, tax and legal services. Total costs for 2008 were $915,000 compared
to $612,000 in 2007. The $303,000 increase in expenses in 2008 over the prior
year relates to higher accounting, tax and legal fees. These higher costs are
expected to continue as we grow and advance our properties.

General and administrative expenses for 2008 were $4,774,000
compared to $4,702,000 in 2007. The increase in general and administrative
expenses was due to higher insurance fees, office expenses and travel costs as
the company continues to grow.

Stock-based compensation expense for 2008 was $9,601,000
compared to $13,955,000 in 2007. Of the current years expense, $1,976,000 was
related to general and administration for directors and consultants as compared
to $2,609,000 in 2007, and $7,625,000 was related to employee salaries and
benefits as compared to $11,346,000 in 2007. The decrease in stock based
compensation was related to vesting of stock options granted in prior years and
less stock options being issued in the current year. We value stock options
granted to employees, directors and consultants using the Black-Scholes pricing
model.

Foreign exchange gain for 2008 was $200,000 compared to a loss
of $3,282,000 in 2007. As proceeds from our convertible debt financing and sale
of silver bullion were in US dollars, we now hold a significant portion of our
cash in US funds. Therefore, the strengthening of the US dollar versus the
Canadian dollar would result in a foreign exchange gain and vice versa. The
decrease in foreign exchange loss to a foreign exchange gain as compared to the
prior year reflected the strengthening in the US dollar versus the Canadian
dollar during the year.

10

---

|                                                                       |  | Year ended December 31, |  
|---------------------------------------------------------------------- |  | ----------------------- | -
|                                                                       |  | 2008                    |  
|Other income
      (expenses)                                          |  | $(000                   | )
|Investment income                                                      |  | 3,039                   |  
|Financing fees                                                         |  | (3,773                  | )
|Interest expense on convertible debt                                   |  | (2,726                  | )
|Gain on sale of silver bullion                                         |  | 23,699                  |  
|Gain on sale of marketable securities                                  |  | 2,090                   |  
|Unrealized gain (loss) on financial instruments
      held-for-trading |  | 114                     |  
|Write-down of marketable securities                                    |  | (4,891                  | )
|Write-down of other investments                                        |  | (17,903                 | )
|Gain on sale of mineral properties                                     |  | 31,463                  |  
|                                                                       |  | 31,112                  |  

Investment income was $3,039,000 for 2008 compared to
$6,287,000 in 2007. The decreased investment income was due to lower yields on
investments. As a result of significant volatility in the credit market since
the fourth quarter of 2007, we opted to mitigate credit risk by investing the
majority of our cash and cash equivalents in US and Canadian government treasury
bills. These treasuries have lower yields.

In February 2008, we successfully completed a $138,000,000
convertible note financing. The convertible notes bear interest at a rate of
4.5% per year and may be redeemed by us on and after March 5, 2013. Financing
fees of $3,773,000 incurred relate to one-time financing expenses including
underwriters commissions, legal fees and auditors fees associated with the
financing.

During 2008, accretion expense and interest expense related to
the convertible notes were $5,033,000 and $5,373,000, respectively; $3,750,000
of accretion expense and $3,931,000 of interest expense were capitalized to
construction in progress during the period resulting in $1,283,000 of accretion
and $1,443,000 of interest expensed in the period.

In March 2008, we sold our silver bullion at an average price
of $20.30 per ounce for cash proceeds of approximately $39,648,000. The silver
bullion was recorded at a cost of $15,977,000, resulting in an after-tax gain of
$23,699,000 after taking into account fluctuations in foreign exchange. No tax
expense was recorded as we have sufficient tax pools to offset the taxable gain
on the sale.

Gain on sale of marketable securities was $2,090,000 for 2008
compared to $605,000 in the prior year as we sold some of our marketable
securities during the year.

Unrealized gain on financial instruments held-for-trading
during the year was $114,000 compared to a loss of $1,801,000 in the prior year.
The gain in the current year consists of $1,429,000 gain on mark-to-market
adjustment of foreign exchange options net of $1,389,000 loss on revaluation of
Aurcana convertible debenture, $27,000 loss on mark-to-market adjustment on
stock warrants investments and $101,000 unrealized foreign exchange gain on
translation. The unrealized losses in the prior year were primarily related to
mark-to-market adjustment of foreign exchange options.

Write-down of other investments in 2008 of $17,903,000 (2007 -
$12,232,000) relates to the impairment in estimated fair value of our investment
in Canadian asset-backed commercial paper, which is further discussed in Other
Investments in the Liquidity section and in the Critical Accounting Estimate
sections below. In addition, a mark to market write-down of $4,891,000 was
recorded for available-for-sale marketable securities with decline in fair
values that are considered other-than-temporary.

In July 2008, we closed the sale of the Shafter Silver Project
in Presidio County, Texas, to Aurcana Corporation (Aurcana). Under the terms
of the agreement, Aurcana paid us total consideration of

11

---

$38,133,000 (C$38,210,000) consisting of $22,954,000
(C$23,000,000) in cash, 15 million Aurcana common shares with a fair value of
$6,886,000 and a $9,980,000 (C$10,000,000) convertible debenture with a fair
value of $8,293,000. After deducting transaction cost of $519,000, the sale of
the Shafter Silver Project resulted in a gain on sale of mineral property of
$31,463,000 (after-tax gain of $18,120,000). In 2007, we sold a number of
mineral properties for a total gain of $459,000.

|                          |  | Year ended December 31, |  
|------------------------- |  | ----------------------- | -
|                          |  | 2008                    |  
|Income
      taxes        |  | $(000                   | )
|Current income taxes      |  | 14,575                  |  
|Future income
      taxes |  | 3,393                   |  
|                          |  | 17,968                  |  

For the year ended December 31, 2008, we recorded an income tax
expense of $14,575,000 as compared to $nil in the prior year. Majority of the
income tax expense relates to the sale of the Shafter Silver Project.

Future income tax expense during the year was $3,393,000
compared to $1,022,000 in the prior year. During the year, we adopted new
accounting guidance requiring recognition of tax benefits or losses used to
offset future income tax against unrealized gains or losses on our marketable
securities to be recorded in net earnings instead of other comprehensive income.
Future income tax expense reflects the tax effect on change in fair value of our
marketable securities, which decreased significantly since the third
quarter.

Selected Financial Data

The following table sets forth selected financial data from our
audited consolidated financial statements and should be read in conjunction with
these statements:

|                                            |  |          |   |  | Year ended December 31, |  
|------------------------------------------- |  | -------- | - |  | ----------------------- | -
|                                            |  | 2008     |   |  | 2007                    |  
|                                            |  | $(000    | ) |  | $(000                   | )
|Total revenues                              |  | nil      |   |  | nil                     |  
|Earnings (loss) for year                    |  | (5,946   | ) |  | (33,965                 | )
|Other comprehensive loss for the year       |  | (114,106 | ) |  | (67,019                 | )
|Basic and diluted earnings (loss) per share |  | (0.09    | ) |  | (0.55                   | )
|Total assets                                |  | 567,905  |   |  | 504,851                 |  
|Long term debt                              |  | 104,046  |   |  | nil                     |  
|Working capital                             |  | 41,486   |   |  | 118,680                 |  
|Cash dividends
      declared               |  | nil      |   |  | nil                     |  

Summary of Quarterly Results

The following table sets forth selected quarterly financial
information for each of our last eight quarters:

12

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|                   |  | Total    |  |  | Earnings |   |  |      |  | Earnings (Loss) |  
|------------------ |  | -------- |  |  | -------- | - |  | ---- |  | --------------- | -
|Quarter ending     |  | Revenues |  |  | (Loss)   |   |  |      |  | Per Share       |  
|(unaudited)        |  | **$**    |  |  | $(000    | ) |  |      |  | **$**           |  
|December 31, 2008  |  | nil      |  |  | (14,312  | ) |  | (1 ) |  | (0.23           | )
|September 30, 2008 |  | nil      |  |  | 11,951   |   |  | (2 ) |  | 0.19            |  
|June 30, 2008      |  | nil      |  |  | (5,913   | ) |  | (3 ) |  | (0.09           | )
|March 31, 2008     |  | nil      |  |  | 2,328    |   |  | (4 ) |  | 0.04            |  
|December 31, 2007  |  | nil      |  |  | (14,375  | ) |  | (5 ) |  | (0.23           | )
|September 30, 2007 |  | nil      |  |  | (12,429  | ) |  | (6 ) |  | (0.20           | )
|June 30, 2007      |  | nil      |  |  | (6,382   | ) |  | (7 ) |  | (0.10           | )
|March 31, 2007     |  | nil      |  |  | (779     | ) |  |      |  | (0.01           | )

Explanatory notes:

|(1) | Includes $3,100,000 foreign exchange loss, $2,165,000
      non-cash stock based compensation expense, $4,891,000 mark to market
      write-down of marketable securities and $1,733,000 of current income tax
      expense.                                                                            
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                           
|(2) | Includes $18,120,000 after-tax gain on sale of Shafter
      Silver Project, $1,591,000 foreign exchange gain, net of $2,897,000 future
      income tax expense, $2,600,000 non-cash stock based compensation expense
      and $888,000 unrealized loss on financial instruments
      held-for-trading.
|    |                                                                                                                                                                                                                                                                                                           
|(3) | Includes $2,412,000 in non-cash expenses related to
      value assigned to stock options, $1,116,000 foreign exchange loss, and
      $1,420,000 interest expense on convertible debt.                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                           
|(4) | Includes $23,699,000 gain on sale of silver bullion,
      $2,825,000 foreign exchange gain, $1,391,000 gain on financial instruments
      held-for-trading and $974,000 gain on sale of marketable securities net of
      $17,903,000 write- down in fair value of asset-backed commercial
      paper.
|    |                                                                                                                                                                                                                                                                                                           
|(5) | Includes $3,956,000 in non-cash expenses related to
      value assigned to stock options and a further $8,510,000 write-down in
      fair value of asset-backed commercial paper.                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                           
|(6) | Includes $4,216,000 in non-cash expenses related to
      values assigned to stock options, $3,722,000 write-down in fair value of
      asset-backed commercial paper, $1,859,000 foreign exchange loss and a
      $1,795,000 loss on the fair value of foreign exchange
  contracts.                   
|    |                                                                                                                                                                                                                                                                                                           
|(7) | Includes $3,725,000 in non-cash expenses related to
      values assigned to stock options and $1,757,000 in future income tax
      expense.                                                                                                                                                             

Fourth Quarter Results

During the fourth quarter of 2008, we recorded a net loss of
$14,312,000 ($0.23 per share) as compared to a net loss of $14,375,000 ($0.23
per share) for the same quarter of the prior year. The net loss is mainly
attributed to foreign exchange loss of $3,100,000 (2007 - $1,065,000), non-cash
stock based compensation of $2,165,000 (2007 - $3,956,000), $4,891,000 (2007-
$nil) mark to market write-down of marketable securities with declines in fair
value that were considered other than temporary and current income tax expense
of $1,733,000 (2007 - $nil).

During the fourth quarter of 2008, total capital expenditures
on the Pirquitas Project were $49,095,000 (2007 -$25,790,000), which includes
$47,989,000 (2007 - $11,955,000) in construction and mining equipment and
$1,106,000 (2007 - $11,461,000) in exploration costs. Other significant mineral
property expenditures

13

---

include $3,576,000 (2007 - $4,659,000) for Pitarrilla,
$1,912,000 (2007 - $2,509,000) for Diablillos and $1,698,000 (2007 - $1,541,000)
for San Luis.

Liquidity and Capital Resources

At December 31, 2008, we held $72,013,000 in cash and cash
equivalents and $10,923,000 in marketable securities.

In 2008, we sold $138,000,000 senior convertible notes for net
proceeds of $132,753,000 after commissions. The unsecured senior Notes mature on
March 1, 2028 and bear interest at a rate of 4.5% per annum, payable
semi-annually. We intend to use part of the net proceeds of the offering to
finance a portion of the development costs of the Pirquitas Project and to use
the balance of the net proceeds for the exploration of our other properties, for
working capital and for general corporate purposes.

With the development of the Pirquitas mine, we are
transitioning from an acquirer of silver projects and assets to a developer of
silver projects and producer of silver. During our acquisition phase, we
purchased approximately 1.95 million ounces of silver bullion for investment
purposes at an average cost of $5.85 per ounce. In March 2008, we sold our
silver bullion at an average price of $20.30 per ounce for proceeds of
$39,648,000, which will be used to advance our projects to production.

In July 2008, we sold the Shafter silver project in Presidio
County, Texas, to Aurcana Corporation. Under the terms of the sales agreement,
we received total consideration of $38.1 million, consisting of $23 million in
cash, 15 million shares of Aurcana with a fair value of $6.9 million and a $10
million convertible debenture with a fair value of $8.3 million (see
Convertible debenture receivable).

Working capital at December 31, 2008 was $41,486,000 (2007 -
$118,680,000).

Subsequent to year end, we closed a public share offering of
5,450,000 common shares at a price of $17.00 per share, for aggregate gross
proceeds of $92,650,000. After deducting underwriting fees and estimated
offering expenses of $5,533,000, net proceeds were $87,117,000.

We have sufficient funds to complete the construction of the
Pirquitas mine as well as complete our planned exploration programs for next
year.

Operating Activities

Cash flow used in operations totaled $19,093,000 in 2008,
compared to cash generated by operations of $23,620,000 in 2007. This decrease
in cash flow generated was attributed to foreign exchange gain on our funds held
in U.S. Dollars, offset by financing fees and interest expense related to
issuance of convertible debt, additional salaries, professional fees and general
and administrative costs.

Financing Activities

During 2008, a net total of $138,719,000 was raised through
financing activities as compared to $10,973,000 in 2007. The following table
shows how the funds were raised:

14

---

|                                             |  | Year ended December 31, |  
|-------------------------------------------- |  | ----------------------- | -
|                                             |  | 2008                    |  
|                                             |  | $(000                   | )
|Financing activities                         |  |                         |  
|Proceeds from issuance of convertible notes  |  | 138,000                 |  
|Financing costs related to equity portion of |  |                         |  
|convertible notes
      financing            |  | (1,473                  | )
|Exercise of stock
      options              |  | 2,192                   |  
|                                             |  |                         |  
|                                             |  | 138,719                 |  

In 2008, we sold $138,000,000 senior convertible notes for net
proceeds of $132,753,000 after commissions. The unsecured senior Notes mature on
March 1, 2028 and bear interest at a rate of 4.5% per annum, payable
semi-annually. We intend to use part of the net proceeds of the offering to
finance a portion of the development costs of the Pirquitas Project and to use
the balance of the net proceeds for the exploration of our other properties, for
working capital and for general corporate purposes.

A total of 186,100 shares were issued on the exercise of stock
options for total proceeds received of $2,192,000 in 2008 compared to 886,600
shares issued on the exercise of stock options for total proceeds received of
$10,973,000 in 2007. The weighted average price received on the exercise of
options was $11.78 per share in 2008 compared to $12.38 in 2007.

Investing Activities

Mineral Properties and Capital Expenditures

We spent $61.9 million (2007 - $39.8 million) for exploration
and $107.8 million (2007 - $42.4 million) for construction and mining equipment
during the year. A summary of the exploration expenditures by mineral property
follows:

|                                          |  | Year ended December 31, |  
|----------------------------------------- |  | ----------------------- | -
|                                          |  | 2008                    |  
|                                          |  | $(000                   | )
|Bowdens                                   |  | 245                     |  
|Candelaria                                |  | 282                     |  
|Challacollo                               |  | 213                     |  
|Diablillos                                |  | 5,663                   |  
|Pitarrilla                                |  | 17,866                  |  
|San Luis                                  |  | 6,549                   |  
|Snowfield                                 |  | 4,643                   |  
|Veta Colorada                             |  | 567                     |  
|Other                                     |  | 1,075                   |  
|Changes in
      non-cash working capital |  | (347                    | )
|                                          |  |                         |  
|                                          |  | 36,756                  |  

The above table reflects cash expenditures incurred by
property. It does not include non-cash charges.

Pirquitas Project

A total of $136,441,000 was incurred at the Pirquitas property
in Argentina during the year, which includes $129,171,000 on mine construction
and mining equipment and $7,270,000 in exploration activities.

15

---

Construction is progressing well on the project. The
commissioning and process operations teams are in place and preparing for
start-up. The plan is to start-up the silver circuit initially and then follow
with the tin circuit once the silver process is operating. The Operations crews
are advancing well with the open pit pre-stripping. Continuous shift operations
are now well established, and we have seen success with the utilization of a
high percentage of local people in our operator compliment. Local community
employment is high, and we are well supported by the local communities.

In May 2008 we updated the proven and probable silver reserves
at Pirquitas, with silver reserves increasing by 43% to 195.1 million ounces.
Based on the increased reserves, Pirquitas mine life has been extended to 14.5
years, an increase of 4.5 years from the November 2007 reserve update. The
reserve is indicative of the geologic potential of the Pirquitas system and does
not incorporate any deepening of the initial pit. The deposit remains open at
depth. The approximate 50% increase in mine life not only adds robustness to the
project, but enables a greater window of opportunity for further exploration
activities. The updated reserve estimate incorporates drill data from an
additional 74 reverse circulation drill holes totaling 16,850 meters of in-pit
and pit wall drilling, uses metal prices of $11.00/ounce silver, $5.00/lb tin
and $1.05/lb zinc and is based on a new Whittle pit using total operating costs
of $22 per tonne.

In February 2009, we updated the capital cost estimate for the
project to $230 million plus IVA from the previous capital cost estimate of $220
million plus IVA as inflation in wages and local inputs continues to place
pressure on costs. In developing the previous cost estimate in November 2007, we
estimated inflation for wages and other inputs within Argentina significantly
higher than the official rate. With inflation exceeding company estimates, the
estimated cost to complete the construction of Pirquitas has increased to $230
million or 5% over the 2007 estimate. With eight months of mining experience and
in-country administration, the company estimates that mining, milling and
administration costs will now average $26/tonne over the life of the mine. As of
December 31, 2008, the Company had expended $194 million in construction costs
of the total estimated $230 million.

With production ramping up through Q2, Pirquitas is expected to
produce in excess of six million ounces of silver in 2009 with full production
in excess of 10 million ounces in 2010.

The government of Argentina is proposing to adopt a tax on the
export of concentrates for projects with fiscal stability agreements predating
2002. The Pirquitas Project has a fiscal stability agreement dating from 1998
and may be subject to this proposed export tax. Legality of the export tax is
under review by the court in Argentina.

San Luis Project

A total of $6,549,000 was spent at the San Luis Joint Venture
Project in Peru during the year compared to $7,626,000 in 2007.

Infill diamond drilling on the projects Ayelén Vein was
completed in 2007. In 2008, a 6,600 meter diamond drilling program was
completed, which tested a number of targets on this large property package
(approximately 96 square miles). Exploration targets focused on the BP Zone
where brecciated volcanic rocks hosting copper-zinc-lead sulphide mineralization
have been sampled over a broad area. Quartz vein systems where channel sampling
has identified structures enriched in gold and silver will also be tested. A
revised resource estimate was completed in the fourth quarter of 2008, which
defined a measured and indicated resource of 348,000 ounces of gold resources
and 9.0 million ounces of silver resources. A feasibility study on placing the
project in production has commenced and is expected to be completed in the first
half of 2009.

16

---

We currently hold a 55% interest in the San Luis Project and
have elected to increase our interest to 70% by completing a feasibility study.
We have the right to increase our interest in the San Luis Joint Venture to 80%
by placing the project in production. The remaining joint venture interest is
held by Esperanza Silver Corporation.

Pitarrilla Project

A total of $17,866,000 was spent on our Pitarrilla Project in
Mexico during the current year compared to $16,360,000 in 2007.

In August 2008, we reported an increase in the silver resources
at the Breccia Ridge Zone. Project resources now total 159.9 million ounces of
measured silver resources, 483.7 million ounces of indicated silver resources
and 82.3 million ounces of inferred silver resources, placing Pitarrilla among
the largest silver discoveries in the last decade. Infill and exploration
drilling of the Breccia Ridge Zone is ongoing with three drills on site. Work on
a 2.5 kilometer-long decline is continuing, which will provide underground
drilling stations for the high grade silver and base metal mineralization of the
Breccia Ridge Zone. The portal and more than 1,300 meters of ramp excavation
have been completed to date.

An engineering pre-feasibility study is nearing completion and
focuses initially on developing the underground sulphide-associated, base metal
and silver mineralization found at Breccia Ridge. A second study focusing on
development of the potential open pit resources is in progress.

Diablillos Project

A total of $5,663,000 was spent at the wholly-owned Diablillos
Project in Argentina during the year compared to $4,436,000 in 2007.

We completed an 11,000-meter diamond drill program during 2007
and early 2008 on the project. During the latter part of 2008, a further 5,063
meters of drilling was completed. The objective of the program was to better
define the inferred resource of 93.8 million ounces of silver resources and
815,000 ounces of gold resources. We are in the process of preparing an updated
resource estimate and conducting a metallurgical program for the Diablillos
Project. We have also engaged a Qualified Person as defined in NI 43-101 to
prepare an updated resource estimate for the Diablillos Project, which is
expected to be completed in the second quarter of 2009. Dependent on the results
of the resource estimate and the metallurgical program, we will advance a
pre-feasibility study on the economics of developing the Diablillos Project.

Snowfield Project

A total of $4,643,000 was spent at the wholly-owned property in
Canada during the year compared to $2,392,000 in 2007.

In February 2009, the company reported a five-fold increase in
gold resources at the wholly-owned Snowfield Project in northern British
Columbia, Canada. The increased gold resource is now comprised of measured and
indicated gold resources totalling 4,362,000 ounces and inferred gold resources
of 14,276,000 ounces using a cut-off grade of 0.5 grams of gold-equivalent per
tonne. The property is located 65 kilometres north of the town of Stewart and 20
kilometres southeast of Barrick's high-grade gold-silver mine at Eskay
Creek.

The resource estimate is based on 96 diamond drill holes
completed in 2006-2008, two re-sampled historical holes, collectively totalling
33,922 meters and 15 trenches totalling 126 meters of surface chip sampling.

17

---

A geological review is underway to assess the potential for
expanding the mineralization at Snowfield and the adjacent Sulphurets Project
held by Silver Standard. A follow-up program is being planned for 2009.

San Agustin Project

The San Agustin property is located 85 kilometers north of
Durango City in Durango, Mexico.

In February 2009, an exploration company that had an option to
acquire the property elected to not exercise its option. As a result, the
property has been improved by over $10 million in exploration expenditures and
is now the focus of an updated resource estimate commissioned by Silver
Standard. The property appears to host a significant gold, silver and base metal
resource.

As a result of developments at Snowfield and San Agustin, the
companys exposure to gold resources has expanded significantly.

Financial Position

Cash

At December 31, 2008, we had a cash and cash equivalent balance
of $72,013,000 as compared to $81,600,000 at December 31, 2007. The increase is
mainly attributed to:

- $138,000,000 raised from the convertible debt financing in February;
- $39,648,000 cash proceeds from sale of silver bullion in March;
- $22,954,000 cash proceeds from the sale of the Shafter Project in July;

net of:

- $61,861,000 (2007 - $39,774,000) spent on mineral properties;
- $107,814,000 (2007 - $42,386,000) spent to advance the development of
  Pirquitas.

Silver Bullion

In March 2008, we sold our silver bullion for cash proceeds of
$39,648,000. As at December 31, 2007, the silver bullion was recorded on our
balance sheet at a cost of $15,977,000. The sale resulted in a gain of
$23,699,000. No tax expense was recorded as we have sufficient tax pools to
offset the taxable gain on the sale.

Marketable Securities

Our marketable securities at December 31, 2008 have a carried
cost of $8,533,000 and a market value of $10,923,000 for an unrealized loss of
$2,390,000 compared to a carried cost of $10,359,000 and a market value of
$33,609,000 for an unrealized gain of $23,250,000 at December 31, 2007. These
investments were made in various mineral exploration companies and are
considered to be liquid.

Convertible debenture receivable

As part of considerations received for sale of the Shafter
Silver Project (see Liquidity), we received a $9,980,000 (C$10,000,000)
convertible debenture (Debenture) from Aurcana Corporation (Aurcana).

18

---

The Debenture has a three-year term, a coupon rate of 3% and is
convertible at our option into 6,600,000 Aurcana common shares at C$1.515 per
share. The Debenture is fully secured by general assets of Aurcana.

The note receivable component of the Debenture is designated as
loans and receivable financial instrument. At initial recognition, the fair
value of the note receivable component was estimated at $6,854,000 using the
discounted cash flow model method at market rate. The note receivable component
is accreted over an expected life of 3 years using the effective interest
method. As at December 31, 2008, the book value of the note receivable component
of the Debenture was $5,923,000. Interest and accretion income of $493,000 was
recorded to earnings in relation to the Debenture.

The conversion feature of the Aurcana Debenture is classified
as a held-for-trading financial instrument by default. The fair value of
conversion feature was estimated, at initial recognition, to be $1,439,000 and
is revalued at each period end based on the Black-Scholes valuation model. As at
December 31, 2008, the fair value of the conversion feature was $50,000. As a
result, an unrealized loss of $1,389,000 on financial instruments
held-for-trading was recorded to net earnings during the period.

Other Investments

As at December 31, 2008, we had a total of C$57,102,000
invested in Canadian asset-backed commercial paper (ABCP). At the dates at
which we acquired the investments, the non-bank sponsored ABCP was rated R-1
high by DBRS Limited (DBRS), the highest credit rating for commercial paper.
In August 2007, the ABCP market experienced liquidity problems and was
subsequently frozen. In September 2007, a Pan Canadian Committee (the
Committee) consisting of a panel of major ABCP investors was formed to
restructure the affected ABCP trusts.

At December 31, 2007, based on the limited data available, we
estimated the fair values of our ABCP investments to be $45,645,000 using a
valuation technique which incorporates a probability weighted approach applied
to discounted future cash flows and an impairment of $12,232,000 was recorded in
2007.

On December 24, 2008, the Committee confirmed that an agreement
has been reached with all key stakeholders, including the involvement of
provincial and federal governments. In January 2009, the Committee successfully
obtained the final court approval to complete the restructuring.

On January 28, 2009, we received the restructured notes with a
face value of C$57,142,000 and first interest payment of $1,630,000.

The face value of the restructured notes is allocated as follow:

- C$26,542,000 in Class A-1 Notes
- Senior notes, with the other series of notes subordinated to them
- Expected repayment in 8 years, contractual maturity in 47 years
- Coupon rate of Bankers Acceptance Rate (BA) less 0.5%.
- C$21,944,000 in Class A-2 Notes
      Senior to the Class B and C Notes
        Expected repayment in 8 years, contractual maturity in 47 years
- Senior to the Class B and C Notes
- Expected repayment in 8 years, contractual maturity in 47 years

19

---

- Coupon rate of BA Rate less 0.5%.
- C$3,983,000 in Class B Notes
      Senior to the Class C Notes
        Expected repayment in 8 years, contractual maturity in 47 years
		Coupon rate of BA Rate less 0.5%.
- Senior to the Class C Notes
- Expected repayment in 8 years, contractual maturity in 47 years
- Coupon rate of BA Rate less 0.5%.
- C$1,623,000 in Class C Notes
- Expected repayment in 8 years, contractual maturity in 47 years
- Coupon rate of BA Rate plus 20.0%.
- C$658,000 in Class 3 IA Tracking Notes
- Maturity of 7 years
- Coupon rate equivalent to the lesser of : (i) the rate of return generated
          by the specific underlying assets; and (ii) BA plus 11.0%.
- C$2,392,000 in Class 13 IA Tracking Notes
- Maturity of 5 years
- Coupon rate equivalent to the lesser of : (i) the rate
        of return generated by the specific underlying assets; and (ii) BA plus
        11.0%.

As no secondary market has been developed for these
restructured notes as at December 31, 2008, we estimated the fair value of our
restructured notes using a valuation technique which incorporates a probability
weighted approach applied to discounted future cash flows from the restructured
notes and the fair value of our investments based on the indicative values
contained in a report issued by J.P. Morgan, financial advisor to the Committee.
Based on our best estimate, the fair value of our restructured notes at December
31, 2008 was $21,803,000, resulting in an impairment of $17,903,000 recorded in
2008. There is currently no certainty regarding the development of a secondary
market for the restructured notes and therefore the fair value reported may
change materially in subsequent periods.

In July 2008, we initiated legal action against a Canadian
chartered bank and DBRS by filing a writ and statement of claim in the Supreme
Court of British Columbia to recover any losses that may occur with respect to
the ultimate recovery of our ABCP investments. There can be no assurance that
the outcome of this litigation will be favourable to us.

20

---

Long-term Contractual Obligations

The following table discloses our contractual obligations:

|                             |  | Less Than 1 Year |   |  | 1-3 Years |   |  | 4-5 Years |   |  | 5+ Years |   |  | Total   |  
|---------------------------- |  | ---------------- | - |  | --------- | - |  | --------- | - |  | -------- | - |  | ------- | -
|                             |  | $(000            | ) |  | $(000     | ) |  | $(000     | ) |  | $(000    | ) |  | $(000   | )
|Lease obligations            |  | 246              |   |  | 495       |   |  | 336       |   |  | -        |   |  | 1,077   |  
|Asset retirement obligations |  | 234              |   |  | 1,346     |   |  | 983       |   |  | 2,147    |   |  | 4,710   |  
|Long-term convertible notes* |  | 6,210            |   |  | 12,420    |   |  | 147,315   |   |  | -        |   |  | 165,945 |  
|Total                        |  | 6,690            |   |  | 14,261    |   |  | 148,634   |   |  | 2,147    |   |  | 171,732 |  

|* | Convertible notes are due in 2028 but expected to be
      repaid in 2013. The notes bear an interest rate of 4.5% per annum and are
      convertible into common shares at a fixed conversion rate upon specified
      events.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Additional Disclosures

Internal Control over Financial Reporting

Management is responsible for establishing and maintaining
adequate internal control over financial reporting. Any system of internal
control over financial reporting, no matter how well designed, has inherent
limitations. Therefore, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement
preparation and presentation. There have been no changes in our internal control
over financial reporting during the year ended December 31, 2008 that have
materially affected, or are reasonably likely to materially affect, internal
control over financial reporting.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet financing
arrangements.

Related Party Transactions

During the year ended December 31, 2008, we recorded
administrative, technical services and expense reimbursements of $1,276,000
(2007 - $396,000) from companies related by common directors or officers. At
December 31, 2008, accounts receivable include $42,000 (2007 - $112,000) from
these related parties. Any amounts due from related parties are non-interest
bearing and without specific terms of repayment. Any transactions for expense
reimbursement with related parties are at normal business terms.

Outstanding Share Data

The authorized capital consists of unlimited common shares
without par value. As at March 10, 2009, the following common shares, options
and share purchase warrants were outstanding:

|              |  | Number of  |  |  | Exercise              |  |  | Remaining       | 
|------------- |  | ---------- |  |  | --------------------- |  |  | --------------- | 
|              |  | Shares     |  |  | Price                 |  |  | Life            | 
|              |  |            |  |  | C$                    |  |  | (years)         | 
|Capital stock |  | 68,233,047 |  |  |                       |  |  |                 | 
|Stock options |  | 4,988,750  |  |  | $10.50
      - $40.62 |  |  | 0.8 -
      9.8 | 
|Fully diluted |  | 73,221,797 |  |  |                       |  |  |                 | 

21

---

Subsequent Events

|(a) | In February 2009, we closed a public share offering of
      5,450,000 common shares at a price of $17.00 per share, for aggregate
      gross proceeds of $92,650,000. After deducting underwriting fees and
      estimated offering expenses of $5,533,000, net proceeds were
      $87,117,000.                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(b) | In February 2009, Geologix Explorations Inc. elected not
      to exercise its option to acquire 100% interest in the San Agustin
      property. As a result, the San Agustin property, which contains estimated
      resources of 1.61 million ounces of indicated gold, 1.08 million ounces of
      inferred gold, 48.3 million ounces of indicated silver and 37.3 million
      ounces of inferred silver, was returned to us.

Financial Instruments and Other Instruments

Our financial instruments consist of cash and cash equivalents,
marketable securities, accounts receivable and accounts payable. It is
managements opinion that we are not exposed to significant interest, currency
or credit risks arising from our cash and cash equivalents, accounts receivable
and accounts payable.

We are exposed to currency risk on the acquisition and
exploration expenditures on our properties since we have to settle expenditures
either in local currency or US dollars. Our expenditures are negatively impacted
by increases in value of local currencies versus the US dollar.

Risks and Uncertainties

As a mineral exploration and development company, we are
exposed to a number of risks and uncertainties. See Item 3.D.-Risk
Factors.

- Research and Development, Patents and Licenses, etc.

We are a mineral exploration and development company with no
producing properties and, as such, the information required by this item is
inapplicable.

- Trend Information

We are a mineral exploration and development company with no
producing properties, and, as such, the information required by this item is
inapplicable.

- Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or
are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to investors.

- Tabular Disclosure of Contractual Obligations.

See Item 5.B  Liquidity and Capital Resources.

- Safe Harbor.

See Note Regarding Forward-Looking Statements.

22

---

PART III

|Item 18 | Financial Statements
|------- | --------------------

Effective January 1, 2009, we changed our functional and
reporting currency to the United States Dollar (U.S. Dollars). The change in
reporting currency is to better reflect our business activities and to improve
investors ability to compare our financial results with other publicly traded
businesses in the industry. We expect to conduct most of our business
transactions in U.S. Dollars.

Our audited consolidated financial statements are stated in
U.S. Dollars and are prepared in accordance with Canadian GAAP, which differs in
certain respects from those principles that we would have followed had our
audited consolidated financial statements been prepared in accordance with U.S.
GAAP. The major differences between Canadian and U.S. GAAP, as they affect us,
are disclosed in note 18 to the audited consolidated financial statements.

The financial statements and notes thereto as required under
Item 18 are attached to this Annual Report, are individually listed under Item
19, and are found immediately following the text of this Annual Report. The
audit report of PricewaterhouseCoopers LLP is included in this Annual Report
immediately preceding the financial statements.

|Item 19 | Exhibits
|------- | --------

All financial statements and exhibits referred to in this Item
19 are incorporated by reference into this Annual Report.

Financial Statements

|Document                                                                                                                                                                            |  | Page
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|Consolidated
        Financial Statements as at December 31, 2008, 2007 and 2006 (in U.S. Dollars)                                                                                  |  | F-1 
|Auditors Report,
        dated August 7, 2009                                                                                                                                      |  | F-2 
|Consolidated
        Balance Sheets as at December 31, 2008 and December 31, 2007 (in U.S.
        Dollars)                                                                         |  | F-5 
|Consolidated Statements
        of Earnings (Loss) and Comprehensive Loss for the years ended December
        31, 2008, December 31, 2007 and December 31, 2006 (in U.S. Dollars). |  | F-6 
|Consolidated
        Statements of Cash Flows for the years ended December 31, 2008, December
        31, 2007 and December 31, 2006 (in U.S. Dollars).                             |  | F-7 
|Consolidated Statements
        of Shareholders Equity for the years ended December 31, 2008, December
        31, 2007 and December 31, 2006 (in U.S. Dollars).                   |  | F-8 
|Notes
        to Consolidated Financial Statements for the years ended December 31,
        2008, December 31, 2007 and December 31, 2006 (in U.S. Dollars).                        |  | F-9 

23

---

|B. | Exhibits
|-- | --------

Exhibit
        Number
      
      Description1.1*
      
      Memorandum, Articles and Certificate
          of Incorporation incorporated by reference from Exhibit 1.1 to Registration
          Statement under the Securities Exchange Act of 1934 on Form 20-F, file
          no. 0-26424 filed on July 13, 1995.1.2*
      
      Notice of Articles and Articles
          filed under the Business Corporations Act (British Columbia) incorporated
          by reference from Exhibit 1.2 to Annual Report for the fiscal year ended
          December 31, 2005 under the Securities Exchange Act of 1934 on Form
          20-F, file no. 0-26424 filed on March 31, 2006.2.1*
      
      Indenture, dated as of February
          27, 2008, between the Company and the Bank of New York, as trustee,
          incorporated by reference from Exhibit 2.1 to Annual Report for the
          fiscal year ended December 31, 2007 under the Securities Exchange Act
          of 1934 on Form 20-F, file no. 0-26424 filed on March 31, 2008.8.1*
      
      List of Significant Subsidiaries
          (as defined in Rule 1-02(w) of Regulation S-X) included under Item 4.C,
          Organizational Structure.10.1*
      
      Underwriting Agreement dated
          February 24, 2009 incorporated by reference from Exhibit 99.1 to Report
          of Foreign Private Issuer under the Securities Exchange Act of 1934
          on Form 6-K, file no. 0- 26424 filed on February 25, 2009.12.1
      
      Certification
          of President Pursuant to Section 302 of the Sarbanes-Oxley Act of 200212.2
      
      Certification
          of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
          Act of 2002.13.1
      
      Certification
          of President Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002.13.2
      
      Certification
          of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted
          Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


|* | Previously filed.
|- | -----------------

24

---

Silver Standard Resources Inc.(a development stage company)

Consolidated Financial Statements (restated for change in reporting
  currency)December 31, 2008, 2007 and 2006(expressed in thousands of United States dollars)

F-1

---

Independent Auditors Report

To the Directors of Silver Standard Resources Inc.

We have completed integrated audits of the consolidated financial
  statements of Silver Standard Resources Inc. (the Company) for 2008,
  2007 and 2006 and of its internal control over financial reporting as at December
  31, 2008. Our opinions, based on our audits, are presented below.

Consolidated financial statements

We have audited the accompanying consolidated balance sheets
  of Silver Standard Resources Inc. as at December 31, 2008 and December 31, 2007,
  and the related consolidated statements of earnings (loss) and comprehensive
  loss, cash flows and shareholders equity for each of the years in the
  three year period ended December 31, 2008, presented in U.S. dollars. These
  financial statements are the responsibility of the Companys management.
  Our responsibility is to express an opinion on these financial statements based
  on our audits.

We conducted our audits of the Companys financial statements
  in accordance with Canadian generally accepted auditing standards and the standards
  of the Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform an audit to obtain reasonable assurance about
  whether the financial statements are free of material misstatement. An audit
  of financial statements includes examining, on a test basis, evidence supporting
  the amounts and disclosures in the financial statements. A financial statement
  audit also includes assessing the accounting principles used and significant
  estimates made by management, and evaluating the overall financial statement
  presentation. We believe that our audits provide a reasonable basis for our
  opinion.

In our opinion, the consolidated financial statements referred
  to above present fairly, in all material respects, the financial position of
  the Company as at December 31, 2008 and December 31, 2007 and the results of
  its operations and its cash flows for each of the years in the three year period
  ended December 31, 2008 in accordance with Canadian generally accepted accounting
  principles.

We previously reported to the Shareholders of the Company on
  March 10, 2009 that in our opinion, the consolidated financial statements, presented
  in Canadian dollars, presented fairly, in all material respects, the financial
  position of the Company as at December 31, 2008 and December 31, 2007 and the
  results of its operations and its cash flows for each of the years in the three
  year period ended December 31, 2008 in accordance with Canadian generally accepted
  accounting principles.

Internal control over financial reporting

We have also audited Silver Standard Resources Inc.s internal
  control over financial reporting as at December 31, 2008, based on criteria
  established in Internal Control - Integrated Framework issued by the
  Committee of Sponsoring Organizations of the Treadway Commission (COSO). The
  Companys management is responsible for maintaining effective internal
  control over financial reporting and for its assessment of the effectiveness
  of internal control over financial reporting, included in the accompanying Managements
  Report on Internal Controls over Financial Reporting. Our responsibility is
  to express an opinion on the Companys internal control over financial
  reporting based on our audit.

F-2

---

We conducted our audit of internal control over financial reporting
  in accordance with the standards of the Public Company Accounting Oversight
  Board (United States). Those standards require that we plan and perform the
  audit to obtain reasonable assurance about whether effective internal control
  over financial reporting was maintained in all material respects. An audit of
  internal control over financial reporting includes obtaining an understanding
  of internal control over financial reporting, assessing the risk that a material
  weakness exists, testing and evaluating the design and operating effectiveness
  of internal control based on the assessed risk, and performing such other procedures
  as we consider necessary in the circumstances. We believe that our audit provides
  a reasonable basis for our opinion.

A companys internal control over financial reporting is
  a process designed to provide reasonable assurance regarding the reliability
  of financial reporting and the preparation of financial statements for external
  purposes in accordance with generally accepted accounting principles. A companys
  internal control over financial reporting includes those policies and procedures
  that (i) pertain to the maintenance of records that, in reasonable detail, accurately
  and fairly reflect the transactions and dispositions of the assets of the company;
  (ii) provide reasonable assurance that transactions are recorded as necessary
  to permit preparation of financial statements in accordance with generally accepted
  accounting principles, and that receipts and expenditures of the company are
  being made only in accordance with authorizations of management and directors
  of the company; and (iii) provide reasonable assurance regarding prevention
  or timely detection of unauthorized acquisition, use, or disposition of the
  companys assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial
  reporting may not prevent or detect misstatements. Also, projections of any
  evaluation of effectiveness to future periods are subject to the risk that controls
  may become inadequate because of changes in conditions, or that the degree of
  compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects,
  effective internal control over financial reporting as at December 31, 2008
  based on criteria established in Internal Control  Integrated Framework
  issued by the COSO.

/s/ PricewaterhouseCoopers LLP

Chartered AccountantsVancouver, British Columbia
  March 10, 2009 (except for notes 2 and 18(b),vi),iv) which are as of August
  7, 2009)

F-3

---

Comments by Auditors for U.S. Readers on Canada-U.S. Reporting
  Differences

In the United States, reporting standards for auditors require
  the addition of an explanatory paragraph (following the opinion paragraph) when
  there are changes in accounting principles that have a material effect on the
  comparability of the Companys financial statements, such as the changes
  described in notes 2, and 18(b),vi),iv) to the financial statements. Our report
  to the Directors dated March 10, 2009 (except for notes 2 and 18(b),vi),iv)
  which are as of August 7, 2009) is expressed in accordance with Canadian reporting
  standards which do not require a reference to such a change in accounting principles
  in the auditors report when the change is properly accounted for and adequately
  disclosed in the financial statements.

/s/ PricewaterhouseCoopers LLP

Chartered AccountantsVancouver, British Columbia
  March 10, 2009 (except for notes 2 and 18(b),vi),iv) which are as of August
  7, 2009)

F-4

---

|Silver Standard Resources Inc.                                                    
|----------------------------------------------------------------------------------
|(a development stage company)                                                     
|Consolidated Balance Sheets                                                       
|As at December 31,
      2008 and 2007 (restated for change in reporting currency)
|(expressed in thousands of United States dollars)                                 

|                                                                |  | Note |  |  | 2008    |   |  | 2007       |  
|--------------------------------------------------------------- |  | ---- |  |  | ------- | - |  | ---------- | -
|                                                                |  |      |  |  | **$**   |   |  | **$**      |  
|Assets                                                          |  |      |  |  |         |   |  | (Restated) |  
|Current assets                                                  |  |      |  |  |         |   |  |            |  
|Cash and cash equivalents                                       |  |      |  |  | 72,013  |   |  | 81,600     |  
|Silver bullion                                                  |  | 4    |  |  | -       |   |  | 15,977     |  
|Marketable securities                                           |  | 5a   |  |  | 10,923  |   |  | 33,609     |  
|Accounts receivable                                             |  |      |  |  | 2,772   |   |  | 2,938      |  
|Prepaid expenses and deposits                                   |  |      |  |  | 1,106   |   |  | 458        |  
|                                                                |  |      |  |  | 86,814  |   |  | 134,582    |  
|                                                                |  |      |  |  |         |   |  |            |  
|Restricted cash                                                 |  | 10   |  |  | 1,793   |   |  | 1,831      |  
|Other investments                                               |  | 6    |  |  | 21,803  |   |  | 45,645     |  
|Convertible debenture                                           |  | 5c   |  |  | 5,973   |   |  | -          |  
|Valued added tax recoverable                                    |  | 7    |  |  | 30,332  |   |  | 9,642      |  
|Mineral property costs and property, plant,
      and equipment |  | 8    |  |  | 421,190 |   |  | 306,232    |  
|Mineral property held-for-sale                                  |  | 8    |  |  | -       |   |  | 6,919      |  
|                                                                |  |      |  |  | 567,905 |   |  | 504,851    |  
|Liabilities and Shareholders' Equity                            |  |      |  |  |         |   |  |            |  
|Current liabilities                                             |  |      |  |  |         |   |  |            |  
|Accounts payable                                                |  |      |  |  | 20,438  |   |  | 9,756      |  
|Accrued liabilities                                             |  |      |  |  | 10,875  |   |  | 3,676      |  
|Accrued interest on convertible notes                           |  | 9    |  |  | 2,066   |   |  | -          |  
|Current portion of taxes payable                                |  |      |  |  | 11,715  |   |  | -          |  
|Current portion of asset retirement obligations                 |  | 10   |  |  | 234     |   |  | 1,041      |  
|Foreign exchange derivatives                                    |  | 5b   |  |  | -       |   |  | 1,429      |  
|                                                                |  |      |  |  | 45,328  |   |  | 15,902     |  
|Asset retirement obligations                                    |  | 10   |  |  | 3,229   |   |  | 2,861      |  
|Taxes payable                                                   |  |      |  |  | 3,370   |   |  | -          |  
|Future income tax liability                                     |  |      |  |  | 22,335  |   |  | 25,557     |  
|Long-term convertible notes                                     |  | 9    |  |  | 104,046 |   |  | -          |  
|                                                                |  |      |  |  | 178,308 |   |  | 44,320     |  
|Non-controlling interest                                        |  |      |  |  | 496     |   |  | 615        |  
|                                                                |  |      |  |  | 178,804 |   |  | 44,935     |  
|Shareholders' Equity                                            |  |      |  |  |         |   |  |            |  
|Share capital                                                   |  | 11a  |  |  | 389,655 |   |  | 386,597    |  
|Value assigned to stock options                                 |  | 11b  |  |  | 36,502  |   |  | 27,706     |  
|Value assigned to convertible notes                             |  | 9    |  |  | 37,383  |   |  | -          |  
|Contributed surplus                                             |  |      |  |  | 510     |   |  | 510        |  
|Accumulated other comprehensive income (loss)                   |  |      |  |  | (19,569 | ) |  | 94,537     |  
|Deficit                                                         |  |      |  |  | (55,380 | ) |  | (49,434    | )
|                                                                |  |      |  |  | 389,101 |   |  | 459,916    |  
|                                                                |  |      |  |  |         |   |  |            |  
|                                                                |  |      |  |  | 567,905 |   |  | 504,851    |  

Commitments (note 17) 
  Subsequent events (note 19)

Approved on behalf of the Board of Directors

|John R. Brodie                  | Peter W. Tomsett
|--------------------------------- | ------------------
|John R. Brodie, FCA               | Peter W. Tomsett  
|(Chairman of the Audit Committee) | (Director)        

The accompanying notes are an integral part of the consolidated
  financial statements

F-5

---

|Silver Standard Resources Inc.                                                                        
|------------------------------------------------------------------------------------------------------
|(a development stage company)                                                                         
|Consolidated Statements of Earnings (Loss) and Comprehensive
      Loss                               
|For the years ended
      December 31, 2008, 2007 and 2006 (restated for change in reporting currency)
|(expressed in thousands of United States dollars, except per
      share amounts)                     

|                                                                                     |  | Note   |  |  | 2008     |   |  | 2007       |   |  | 2006    |  
|------------------------------------------------------------------------------------ |  | ------ |  |  | -------- | - |  | ---------- | - |  | ------- | -
|                                                                                     |  |        |  |  | **$**    |   |  | **$**      |   |  | **$**   |  
|                                                                                     |  |        |  |  |          |   |  | (Restated) |   |  |         |  
|Exploration and mineral property costs                                               |  |        |  |  |          |   |  |            |   |  |         |  
|Property examination and exploration                                                 |  |        |  |  | 340      |   |  | 73         |   |  | 235     |  
|Mineral property costs written-off                                                   |  |        |  |  | -        |   |  | -          |   |  | 89      |  
|Reclamation and accretion                                                            |  | 10     |  |  | 318      |   |  | 728        |   |  | 1,879   |  
|                                                                                     |  |        |  |  | (658     | ) |  | (801       | ) |  | (2,203  | )
|Expenses                                                                             |  |        |  |  |          |   |  |            |   |  |         |  
|Salaries and employee benefits                                                       |  |        |  |  | 3,054    |   |  | 2,613      |   |  | 1,993   |  
|Depreciation                                                                         |  |        |  |  | 288      |   |  | 296        |   |  | 125     |  
|Professional fees                                                                    |  |        |  |  | 915      |   |  | 612        |   |  | 541     |  
|General and administration                                                           |  |        |  |  | 4,774    |   |  | 4,702      |   |  | 3,549   |  
|Stock-based compensation                                                             |  | 11b    |  |  | 9,601    |   |  | 13,955     |   |  | 11,405  |  
|Foreign exchange (gain) loss                                                         |  |        |  |  | (200     | ) |  | 3,282      |   |  | 66      |  
|                                                                                     |  |        |  |  | (18,432  | ) |  | (25,460    | ) |  | (17,679 | )
|Other income (expenses)                                                              |  |        |  |  |          |   |  |            |   |  |         |  
|Investment income                                                                    |  |        |  |  | 3,039    |   |  | 6,287      |   |  | 5,276   |  
|Financing fees                                                                       |  | 9      |  |  | (3,773   | ) |  | -          |   |  | -       |  
|Interest expense on convertible notes                                                |  | 9      |  |  | (2,726   | ) |  | -          |   |  | -       |  
|Gain on sale of silver bullion                                                       |  | 4      |  |  | 23,699   |   |  | -          |   |  | -       |  
|Gain (loss) on sale of marketable securities                                         |  |        |  |  | 2,090    |   |  | 605        |   |  | (2,343  | )
|Unrealized gain (loss) on financial instruments held-for-trading                     |  | 5a,b,c |  |  | 114      |   |  | (1,801     | ) |  | -       |  
|Write-up (down) of marketable securities                                             |  | 5a     |  |  | (4,891   | ) |  | -          |   |  | 46      |  
|Write-down of other investments                                                      |  | 6      |  |  | (17,903  | ) |  | (12,232    | ) |  | -       |  
|Gain on sale of joint venture interest                                               |  | 8ii    |  |  | -        |   |  | -          |   |  | 30,865  |  
|Gain on sale of mineral property                                                     |  | 8xvii  |  |  | 31,463   |   |  | 459        |   |  | 153     |  
|                                                                                     |  |        |  |  | 31,112   |   |  | (6,682     | ) |  | 33,997  |  
|                                                                                     |  |        |  |  |          |   |  |            |   |  |         |  
|Earnings (loss) before income taxes                                                  |  |        |  |  | 12,022   |   |  | (32,943    | ) |  | 14,115  |  
|                                                                                     |  |        |  |  |          |   |  |            |   |  |         |  
|Income taxes:                                                                        |  |        |  |  |          |   |  |            |   |  |         |  
|Current income taxes                                                                 |  | 8xvii  |  |  | 14,575   |   |  | -          |   |  | -       |  
|Future income taxes                                                                  |  | 3e     |  |  | 3,393    |   |  | 1,022      |   |  | -       |  
|                                                                                     |  |        |  |  | 17,968   |   |  | 1,022      |   |  | -       |  
|                                                                                     |  |        |  |  |          |   |  |            |   |  |         |  
|Earnings (Loss) for the year                                                         |  |        |  |  | (5,946   | ) |  | (33,965    | ) |  | 14,115  |  
|                                                                                     |  |        |  |  |          |   |  |            |   |  |         |  
|Weighted average shares outstanding (thousands)                                      |  |        |  |  |          |   |  |            |   |  |         |  
|Basic                                                                                |  |        |  |  | 62,694   |   |  | 62,148     |   |  | 58,652  |  
|Diluted                                                                              |  |        |  |  | 62,694   |   |  | 62,148     |   |  | 58,904  |  
|Earnings (Loss) per common share                                                     |  |        |  |  |          |   |  |            |   |  |         |  
|Basic earnings (loss) per share                                                      |  |        |  |  | (0.09    | ) |  | (0.55      | ) |  | 0.24    |  
|Diluted earnings (loss) per share                                                    |  |        |  |  | (0.09    | ) |  | (0.55      | ) |  | 0.24    |  
|                                                                                     |  |        |  |  |          |   |  |            |   |  |         |  
|Comprehensive income (loss)                                                          |  |        |  |  |          |   |  |            |   |  |         |  
|Loss for the year                                                                    |  |        |  |  | (5,946   | ) |  | (33,965    | ) |  |         |  
|Other comprehensive income (loss)                                                    |  |        |  |  |          |   |  |            |   |  |         |  
|Translation adjustment                                                               |  |        |  |  | (97,587  | ) |  | 71,986     |   |  |         |  
|Unrealized loss on marketable
      securities, net of tax                           |  | 5a     |  |  | (14,785  | ) |  | (4,967     | ) |  |         |  
|Reclassification of realized gain on sale
      of marketable securities, net of tax |  | 5a     |  |  | (1,734   | ) |  | -          |   |  |         |  
|Other comprehensive income (loss) for the year                                       |  |        |  |  | (114,106 | ) |  | 67,019     |   |  |         |  
|Comprehensive income (loss) for the year                                             |  |        |  |  | (120,052 | ) |  | 33,054     |   |  |         |  

The accompanying notes are an integral part of the consolidated
  financial statements

F-6

---

|Silver Standard Resources Inc.                                                                        
|------------------------------------------------------------------------------------------------------
|(a development stage company)                                                                         
|Consolidated Statements of Cash Flows                                                                 
|For the years ended
      December 31, 2008, 2007 and 2006 (restated for change in reporting currency)
|(expressed in thousands of United States dollars)                                                     

|                                                      |  | Note |  |  | 2008     |   |  | 2007       |   |  | 2006    |  
|----------------------------------------------------- |  | ---- |  |  | -------- | - |  | ---------- | - |  | ------- | -
|                                                      |  |      |  |  | **$**    |   |  | **$**      |   |  | **$**   |  
|                                                      |  |      |  |  |          |   |  | (Restated) |   |  |         |  
|Operating activities                                  |  |      |  |  |          |   |  |            |   |  |         |  
|Earnings (Loss) for the year                          |  |      |  |  | (5,946   | ) |  | (33,965    | ) |  | 14,115  |  
|Items not affecting
      cash                        |  |      |  |  |          |   |  |            |   |  |         |  
|Depreciation                                          |  |      |  |  | 288      |   |  | 296        |   |  | 125     |  
|Stock-based
      compensation                        |  | 11b  |  |  | 9,601    |   |  | 13,955     |   |  | 11,405  |  
|Asset retirement obligations                          |  |      |  |  | 335      |   |  | 602        |   |  | 1,810   |  
|Mineral property
      costs written-off              |  |      |  |  | -        |   |  | -          |   |  | 89      |  
|Gain on sale of marketable
      securities           |  | 5a   |  |  | (2,090   | ) |  | (605       | ) |  | 2,343   |  
|Gain on sale
      of silver bullion                  |  | 4    |  |  | (23,699  | ) |  | -          |   |  | -       |  
|Gain on sale of joint venture
      interest          |  |      |  |  | -        |   |  | -          |   |  | (30,865 | )
|Gain on sale
      of mineral property                |  |      |  |  | (31,463  | ) |  | (459       | ) |  | (153    | )
|Unrealized gain on held-for-trading                   |  |      |  |  |          |   |  |            |   |  |         |  
|financial instruments                                 |  | 5a,b |  |  | (114     | ) |  | 1,801      |   |  | -       |  
|Accretion expense on convertible
      notes          |  | 9    |  |  | 1,283    |   |  | -          |   |  | -       |  
|Interest
      income on convertible debenture        |  | 5c   |  |  | (339     | ) |  | -          |   |  | -       |  
|Write-down (up) of marketable
      securities        |  | 5a   |  |  | 4,891    |   |  | -          |   |  | (46     | )
|Write-down
      of other investments                 |  | 6    |  |  | 17,903   |   |  | 12,232     |   |  | -       |  
|Future income tax expense                             |  | 3e   |  |  | 3,393    |   |  | 1,022      |   |  | -       |  
|Increase
      in non-current taxes payable           |  |      |  |  | 3,180    |   |  | -          |   |  | -       |  
|Foreign exchange loss (gain)                          |  |      |  |  | (9,163   | ) |  | 28,085     |   |  | (7,831  | )
|Donation
      of shares                              |  |      |  |  | -        |   |  | 893        |   |  | 206     |  
|Increase (decrease) in non-cash working capital items |  | 15   |  |  | 12,847   |   |  | (237       | ) |  | (1,248  | )
|Cash generated by (used in) operating activities      |  |      |  |  | (19,093  | ) |  | 23,620     |   |  | (10,050 | )
|                                                      |  |      |  |  |          |   |  |            |   |  |         |  
|Financing activities                                  |  |      |  |  |          |   |  |            |   |  |         |  
|Proceeds from issuance of convertible notes           |  | 9    |  |  | 138,000  |   |  | -          |   |  | -       |  
|Financing costs related to equity portion of          |  |      |  |  |          |   |  |            |   |  |         |  
|convertible notes financing                           |  | 9    |  |  | (1,473   | ) |  | -          |   |  | -       |  
|Shares and warrants issued for cash                   |  |      |  |  | 2,192    |   |  | 10,973     |   |  | 192,774 |  
|Share issue cash costs                                |  |      |  |  | -        |   |  | -          |   |  | (10,436 | )
|Cash generated by financing activities                |  |      |  |  | 138,719  |   |  | 10,973     |   |  | 182,338 |  
|                                                      |  |      |  |  |          |   |  |            |   |  |         |  
|Investing activities                                  |  |      |  |  |          |   |  |            |   |  |         |  
|Mineral property costs                                |  |      |  |  | (61,861  | ) |  | (39,774    | ) |  | (34,720 | )
|Property, plant and equipment                         |  |      |  |  | (107,814 | ) |  | (42,386    | ) |  | (3,181  | )
|Increase in value added tax recoverable (net)         |  |      |  |  | (24,401  | ) |  | (7,629     | ) |  | (1,170  | )
|Net proceeds from sale of mineral property            |  | 8    |  |  | 22,435   |   |  | -          |   |  | 11      |  
|Proceeds from sale of silver bullion                  |  | 4    |  |  | 39,648   |   |  | -          |   |  | -       |  
|Proceeds from sale of marketable securities           |  | 5a   |  |  | 2,780    |   |  | 755        |   |  | 46,038  |  
|Reliant, net of cash                                  |  |      |  |  | -        |   |  | 180        |   |  | -       |  
|Increase in investment in restricted cash             |  |      |  |  | -        |   |  | -          |   |  | (1,641  | )
|Purchase of marketable securities                     |  |      |  |  | -        |   |  | (3,394     | ) |  | (333    | )
|Other investments reclassified                        |  |      |  |  | -        |   |  | (57,790    | ) |  | -       |  
|Cash used in investing activities                     |  |      |  |  | (129,213 | ) |  | (150,038   | ) |  | 5,004   |  
|                                                      |  |      |  |  |          |   |  |            |   |  |         |  
|Increase (decrease) in cash and cash equivalents      |  |      |  |  | (9,587   | ) |  | (115,445   | ) |  | 177,292 |  
|                                                      |  |      |  |  |          |   |  |            |   |  |         |  
|Cash and cash equivalents - Beginning of year         |  |      |  |  | 81,600   |   |  | 197,045    |   |  | 19,753  |  
|                                                      |  |      |  |  |          |   |  |            |   |  |         |  
|Cash and cash equivalents - End of year               |  |      |  |  | 72,013   |   |  | 81,600     |   |  | 197,045 |  

Supplementary cash flow information (note 15)

The accompanying notes are an integral part of the consolidated
  financial statements

F-7

---

|Silver Standard Resources Inc.                                                                        
|------------------------------------------------------------------------------------------------------
|(a development stage company)                                                                         
|Consolidated Statements of Shareholders Equity                                                       
|For the years ended
      December 31, 2008, 2007 and 2006 (restated for change in reporting currency)
|(expressed in thousands of United States dollars)                                                     

|                                       |  |               |  |  |          |   |  | Values      |   |  | Values      |   |  |             |  |  | Accumulated   |   |  |            |   |  |               |  
|-------------------------------------- |  | ------------- |  |  | -------- | - |  | ----------- | - |  | ----------- | - |  | ----------- |  |  | ------------- | - |  | ---------- | - |  | ------------- | -
|                                       |  | Common Shares |  |  | assigned |   |  | assigned to |   |  |             |   |  | other       |  |  | Retained      |   |  | Total      |  
|                                       |  | Number of     |  |  |          |   |  | to stock    |   |  | convertible |   |  | Contributed |  |  | comprehensive |   |  | earnings   |   |  | shareholders' |  
|                                       |  | shares        |  |  | Amount   |   |  | options     |   |  | notes       |   |  | Surplus     |  |  | income        |   |  | (deficit)  |   |  | equity        |  
|                                       |  | (thousands)   |  |  | $        |   |  | $           |   |  | $           |   |  | $           |  |  | $             |   |  | $          |   |  | $             |  
|                                       |  |               |  |  |          |   |  |             |   |  |             |   |  |             |  |  | (Restated)    |   |  | (Restated) |   |  | (Restated)    |  
|                                       |  |               |  |  |          |   |  |             |   |  |             |   |  |             |  |  |               |   |  |            |   |  |               |  
|Balance, December 31, 2005             |  | 51,849        |  |  | 171,290  |   |  | 7,745       |   |  | 5,364       |   |  | -           |  |  | -             |   |  | (33,947    | ) |  | 150,452       |  
|Unrealized gain on translation of non- |  | -             |  |  | -        |   |  | -           |   |  | -           |   |  | -           |  |  | 6,308         |   |  | -          |   |  | 6,308         |  
|US dollar denominated accounts         |  |               |  |  |          |   |  |             |   |  |             |   |  |             |  |  |               |   |  |            |   |  |               |  
|Issued for cash:                       |  |               |  |  |          |   |  |             |   |  |             |   |  |             |  |  |               |   |  |            |   |  |               |  
|Public offering                        |  | 7,200         |  |  | 164,384  |   |  | -           |   |  | -           |   |  | -           |  |  | -             |   |  | -          |   |  | 164,384       |  
|Exercise of options                    |  | 669           |  |  | 5,773    |   |  | -           |   |  | -           |   |  | -           |  |  | -             |   |  | -          |   |  | 5,773         |  
|Exercise of warrants                   |  | 1,387         |  |  | 22,617   |   |  | -           |   |  | -           |   |  | -           |  |  | -             |   |  | -          |   |  | 22,617        |  
|For mineral property                   |  | 530           |  |  | 8,442    |   |  | -           |   |  | -           |   |  | -           |  |  | -             |   |  | -          |   |  | 8,442         |  
|Value assigned to options granted      |  | -             |  |  | -        |   |  | 12,067      |   |  | -           |   |  | -           |  |  | -             |   |  | -          |   |  | 12,067        |  
|Value of options exercised             |  | -             |  |  | 2,277    |   |  | (2,277      | ) |  | -           |   |  | -           |  |  | -             |   |  | -          |   |  | -             |  
|Value of warrants exercised            |  | -             |  |  | 5,643    |   |  | -           |   |  | (4,929      | ) |  | -           |  |  | -             |   |  | -          |   |  | 714           |  
|Donations                              |  | 11            |  |  | 206      |   |  | -           |   |  | -           |   |  | -           |  |  | -             |   |  | -          |   |  | 206           |  
|Share issue costs                      |  | -             |  |  | (10,436  | ) |  | -           |   |  | -           |   |  | -           |  |  | -             |   |  | -          |   |  | (10,436       | )
|Options expired                        |  | -             |  |  | -        |   |  | (75         | ) |  | -           |   |  | 75          |  |  | -             |   |  | -          |   |  | -             |  
|Warrants expired                       |  | -             |  |  | -        |   |  | -           |   |  | (435        | ) |  | 435         |  |  | -             |   |  | -          |   |  | -             |  
|Earnings (loss) for the year           |  | -             |  |  | -        |   |  | -           |   |  | -           |   |  | -           |  |  | -             |   |  | 14,115     |   |  | 14,115        |  
|                                       |  |               |  |  |          |   |  |             |   |  |             |   |  |             |  |  |               |   |  |            |   |  |               |  
|Balance, December 31, 2006             |  | 61,646        |  |  | 370,196  |   |  | 17,460      |   |  | -           |   |  | 510         |  |  | 6,308         |   |  | (19,832    | ) |  | 374,642       |  
|                                       |  |               |  |  |          |   |  |             |   |  |             |   |  |             |  |  |               |   |  |            |   |  |               |  
|Transition adjustment to opening       |  | -             |  |  | -        |   |  | -           |   |  | -           |   |  | -           |  |  | 21,210        |   |  | 4,363      |   |  | 25,573        |  
|balance (note 2)                       |  |               |  |  |          |   |  |             |   |  |             |   |  |             |  |  |               |   |  |            |   |  |               |  
|Issued for cash:                       |  |               |  |  |          |   |  |             |   |  |             |   |  |             |  |  |               |   |  |            |   |  |               |  
|Exercise of options                    |  | 887           |  |  | 10,973   |   |  | -           |   |  | -           |   |  | -           |  |  | -             |   |  | -          |   |  | 10,973        |  
|For mineral property                   |  | 9             |  |  | 338      |   |  | -           |   |  | -           |   |  | -           |  |  | -             |   |  | -          |   |  | 338           |  
|Value assigned to options granted      |  | -             |  |  | -        |   |  | 14,443      |   |  | -           |   |  | -           |  |  | -             |   |  | -          |   |  | 14,443        |  
|Value of options exercised             |  | -             |  |  | 4,197    |   |  | (4,197      | ) |  | -           |   |  | -           |  |  | -             |   |  | -          |   |  | -             |  
|Donations                              |  | 27            |  |  | 893      |   |  | -           |   |  | -           |   |  | -           |  |  | -             |   |  | -          |   |  | 893           |  
|Other comprehensive income (loss)      |  | -             |  |  | -        |   |  | -           |   |  | -           |   |  | -           |  |  | 67,019        |   |  | -          |   |  | 67,019        |  
|Earnings (loss) for the year           |  | -             |  |  | -        |   |  | -           |   |  | -           |   |  | -           |  |  | -             |   |  | (33,965    | ) |  | (33,965       | )
|                                       |  |               |  |  |          |   |  |             |   |  |             |   |  |             |  |  |               |   |  |            |   |  |               |  
|Balance, December 31, 2007             |  | 62,569        |  |  | 386,597  |   |  | 27,706      |   |  | -           |   |  | 510         |  |  | 94,537        |   |  | (49,434    | ) |  | 459,916       |  
|                                       |  |               |  |  |          |   |  |             |   |  |             |   |  |             |  |  |               |   |  |            |   |  |               |  
|Issued for cash:                       |  |               |  |  |          |   |  |             |   |  |             |   |  |             |  |  |               |   |  |            |   |  |               |  
|Exercise of options                    |  | 186           |  |  | 2,192    |   |  | -           |   |  | -           |   |  | -           |  |  | -             |   |  | -          |   |  | 2,192         |  
|Value assigned to options granted      |  | -             |  |  | -        |   |  | 9,662       |   |  | -           |   |  | -           |  |  | -             |   |  | -          |   |  | 9,662         |  
|Value of options exercised             |  | -             |  |  | 866      |   |  | (866        | ) |  | -           |   |  | -           |  |  | -             |   |  | -          |   |  | -             |  
|Value assigned to convertible notes    |  | -             |  |  | -        |   |  | -           |   |  | 37,383      |   |  | -           |  |  | -             |   |  | -          |   |  | 37,383        |  
|Other comprehensive income (loss)      |  | -             |  |  | -        |   |  | -           |   |  | -           |   |  | -           |  |  | (114,106      | ) |  | -          |   |  | (114,106      | )
|Earnings (loss) for the year           |  | -             |  |  | -        |   |  | -           |   |  | -           |   |  | -           |  |  | -             |   |  | (5,946     | ) |  | (5,946        | )
|                                       |  |               |  |  |          |   |  |             |   |  |             |   |  |             |  |  |               |   |  |            |   |  |               |  
|Balance, December 31, 2008             |  | 62,755        |  |  | 389,655  |   |  | 36,502      |   |  | 37,383      |   |  | 510         |  |  | (19,569       | ) |  | (55,380    | ) |  | 389,101       |  

The accompanying notes are an integral part of the consolidated
  financial statements

F-8

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|1 | NATURE OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | We are a development stage company that, since 1994,
        has assembled a portfolio of silver-dominant projects, which are located
        in seven countries in the Americas and Australia. We are now focused on
        advancing our five principal projects to commercial production. These
        include the Pirquitas Project, the San Luis Project, the Pitarrilla Project,
        the Diablillos Project and the Snowfield Project. In addition to our five
        principal projects, we hold a geologically-diverse portfolio of other
        predominantly silver projects in various stages of exploration.
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | Management has estimated that we will have adequate
        funds from existing working capital to meet our corporate, development,
        administrative and property obligations for the coming year, including
        the construction of the Pirquitas property. We will periodically need
        to obtain additional financing (see note 19  Subsequent events),
        and while we have been successful in the past, there can be no assurance
        that we will be able to do so in the future.                                                                                                                
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | The recoverability of the amounts shown for mineral
        properties and related deferred costs is dependent upon the existence
        of economically recoverable reserves, our ability to obtain necessary
        financing to complete the development, and upon future profitable production.
        The amounts shown as deferred expenditures and property acquisition costs
        represent net costs to date, less amounts amortized and/or written-off,
        and do not necessarily represent present or future values.                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2 | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | Generally accepted accounting principles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | These consolidated financial statements have been prepared
        in accordance with Canadian generally accepted accounting principles (Canadian
        GAAP). The significant differences between these principles and
        those that would be applied under U.S. generally accepted accounting principles
        and requirements promulgated by the Securities and Exchange Commission
        (collectively U.S. GAAP), as they affect the company, are
        disclosed in note 18.                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | Change in reporting currency                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | Effective January 1, 2009, we changed our reporting
        currency from the Canadian dollar to the US dollar. The change in reporting
        currency is to better reflect our business activities and to provide investors
        with comparability to other companies in the mining industry. Prior to
        January 1, 2009, we reported our annual and quarterly consolidated financial
        statements in Canadian dollars. These financial statements and corresponding
        notes for periods prior to January 1, 2009 have been restated to the US
        dollar for comparison to 2009 financial results.

F-9

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|2 | SIGNIFICANT ACCOUNTING POLICIES (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | Change in reporting currency (Cont)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | These consolidated financial statements have been translated
        to US dollars in accordance with EIC-130. Translation Method when
        the Reporting Currency differs from the Measurement Currency or there
        is a Change in the Reporting Currency. These guidelines require
        that the comparative financial statements and corresponding notes are
        restated from Canadian dollars to US dollars using the current rate method.
        Under this method, all assets and liabilities are translated into US dollars
        at the exchange rate prevailing at the balance sheet date; expense items
        are translated at the average rate of exchange for the period; one-time
        income or expense items are translated at the exchange rate on the date
        of the transaction; and the resulting translation adjustment is recorded
        as a cumulative translation adjustment (CTA) in accumulated
        other comprehensive income
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | Effective January 1, 2009, we determined that our functional
        currency had changed from the Canadian dollar to the US dollar as a result
        of a change in the nature of our operations. As a result of the change
        in our functional currency, effective January 1, 2009, our integrated
        foreign currency operations will be translated to US dollars using the
        temporal method on a prospective basis. Under the temporal method, monetary
        assets and liabilities are translated at the exchange rate in effect at
        the balance sheet date; non-monetary items are translated at historic
        exchange rates; and income and expense items are translated at the average
        exchange rate for the period. Translation gains and losses are recognized
        in the Consolidated Statement of Earnings (Loss) and Comprehensive Loss.                                                                                             
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | Basis of presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | The consolidated financial statements include the accounts
        of the company and its wholly-owned subsidiaries, the most significant
        of which are presented in the following table:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Subsidiary
      Location
      Ownership
      ProjectCandelaria Mining Company
      Delaware
      100%
      CandelariaMina Pirquitas, Inc.
      Delaware
      100%
      PirquitasMaverick Silver Inc.
      Nevada
      100%
      Maverick SpringsSociedad Minera Berenguela S.A.
      Peru
      100%
      BerenguelaReliant Ventures S.A.C.
      Peru
      55%
      San LuisMinera Silver Standard Chile S.A.
      Chile
      100%
      ChallacolloPacific Rim Mining Corporation Argentina, S.A.
      Argentina
      100%
      DiablillosSilver Standard Australia Pty Limited
      Australia
      100%
      Bowdens777666 B.C. Ltd.
      Canada
      100%
      Snowfield/SulphuretsSilver Standard Durango S.A. de C.V.
      Mexico
      100%
      PitarrillaSilver Standard Exploraciones S.A. de C.V.
      Mexico
      100%
      Veta Colorada


All inter-company transactions and balances
  have been eliminated on consolidation.

F-10

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|2 | SIGNIFICANT ACCOUNTING POLICIES (Contd)
|- | ----------------------------------------

Use of estimates

The preparation of financial statements
  in conformity with generally accepted accounting principles requires management
  to make estimates and assumptions that affect the amounts reported in the consolidated
  financial statements and related notes. Significant areas where managements
  judgment is applied are asset impairment, stock-based compensation, future income
  tax valuation reserves, ore reserve determinations and asset retirement obligations.
  Actual results could differ from those estimates.

Reclassifications

Certain reclassifications of prior year
  balances have been made to conform to the current year presentation. These reclassifications
  have had no impact on previously reported total current assets, total assets
  and working capital position, and do not affect previously reported cash flows
  from investing and financing activities.

Foreign currency translation

Our subsidiaries are considered to be
  integrated foreign operations whose financial position and results of operations
  are translated into Canadian dollars using the temporal method. Monetary items
  are translated at the exchange rate in effect at the balance sheet date; non-monetary
  items are translated at historical exchange rates. Income and expense items
  are translated at the average exchange rate for the period. Translation gains
  and losses are reflected in the Consolidated Statements of Earnings (Loss) and
  Comprehensive Loss unless they relate to a specific mineral property in which
  case they are capitalized.

Cash and cash equivalents

Cash and cash equivalents include cash,
  bank balances and short-term investments with original maturities of three months
  or less and are stated at cost, which approximates market value.

Silver bullion

Silver bullion is valued at the lower
  of original cost or net realizable value.

Financial Instruments

As at December 31, 2008, our financial
  instruments are comprised of cash and cash equivalents, marketable securities,
  accounts receivable, restricted cash, convertible debenture receivable, other
  investments, accounts payable, accrued liabilities, and convertible notes. The
  fair value of accounts receivable, accounts payable and accrued liabilities
  approximate their carrying value due to their short-term maturity or capacity
  of prompt liquidation.

Cash equivalents

Cash equivalents are composed of short-term
  investments with provinces of Canada, Canada or the United States of America
  or their respective agencies, with a term of less than 90 days. Cash and cash
  equivalents are designated as held-for-trading as at December 31, 2008.

F-11

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|2 | SIGNIFICANT ACCOUNTING POLICIES (Contd)
|- | ----------------------------------------

Financial Instruments (Cont)

Marketable securities

Marketable securities are reported at
  their fair market value based on quoted market prices. Non-derivative based
  marketable securities are designated as available-for-sale financial instruments,
  as they were not acquired for purpose of trading. Derivative based marketable
  securities are designated as held-for-trading financial instruments as their
  default category.

Restricted cash

Restricted cash is designated as available-for-sale
  as it is not acquired for purpose of trading and has short-term maturity.

Convertible debenture receivable

Convertible debenture receivable consists
  of a note receivable component and a conversion feature component. The note
  receivable component is designated as loans and receivable and is recorded at
  amortized cost. The conversion feature is a derivative and is recorded at fair
  value based on the Black-Scholes model, with changes in fair value reflected
  in earnings.

Other investments

Other investments consist of note receivables
  received from restructuring of our asset-backed commercial paper investments.
  As no quoted market price is available, these note receivables are reported
  at their fair value, estimated based on a combination of valuation techniques
  (see note 6). Other investments are currently designated as available-for-sale
  and classified as non-current assets due to uncertainty in development of a
  secondary market.

Convertible notes

Convertible notes are designated as other
  liabilities and related transaction costs on the debt component are expensed
  as incurred. Interest expense related to development expenditures incurred on
  Pirquitas is capitalized to construction in progress.

F-12

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|2 | SIGNIFICANT ACCOUNTING POLICIES (Contd)
|- | ----------------------------------------

Mineral property costs and property,
  plant and equipment

Mineral property costs

We record our interests in mineral properties
  at cost. Costs include the costs of acquiring mineral properties and related
  exploration and development expenditures, interest expense allocable to the
  cost of developing mining properties and to construct new facilities and holding
  costs to maintain a property. Related foreign exchange amounts are deferred.
  These costs are amortized using the units-of-production method against future
  production or are written-off if the properties are sold, allowed to lapse or
  abandoned. General exploration is expensed in the period incurred.

Option payments received are treated
  as a reduction of the carrying value of the related mineral property and deferred
  costs until the payments are in excess of costs incurred, at which time they
  are then credited to income. Options payments are at the discretion of the optionee,
  and accordingly, are accounted for on a cash basis or when receipt is reasonably
  assured.

Our management regularly reviews the
  recoverability of the carrying value of each mineral property. Where information
  and conditions suggest impairment, estimated future cash flows are calculated
  using estimated future prices, proven and probable reserves, weighted probable
  outcomes and operating capital and reclamation costs on an undiscounted basis.
  If it is determined that the future cash flows are less than the carrying value,
  a write-down to the estimated fair value is expensed for the period. Where estimates
  of future net cash flows are not available and where other conditions suggest
  impairment, management assesses if carrying values can be recovered. If the
  carrying values exceed estimated recoverable values, then the costs are written-down
  to fair values with the write-down expensed in the year.

Managements estimates of future
  mineral prices, recoverable resources, initial and operating capital and reclamation
  costs are subject to certain risks and uncertainties that may affect the recoverability
  of mineral property costs. Although management has made its best estimate of
  these factors, it is possible that changes could occur that could adversely
  affect managements estimate of the net cash flows to be generated from
  its properties.

Property, plant and equipment

Property, plant and equipment are recorded
  at cost less accumulated depreciation. Depreciation is calculated on a straight-line
  basis over the useful life of the asset at rates ranging from 10% to 30% per
  annum once the asset is put in service. Construction in progress is recorded
  at cost and re-allocated to mining equipment and machinery when it becomes available
  for use. Depreciation for mining equipment and machinery is calculated on a
  straight-line basis over the useful life of the equipment or the life of mine
  when it becomes available for use. Leasehold improvements are amortized over
  the shorter of their economic lives and the lease term plus lease renewals,
  if any, only when such renewals are reasonably assured. Depreciation charges
  on assets that are directly related to mineral properties are allocated to that
  mineral property. We assess if an impairment loss exists when events or changes
  in circumstances indicate that the carrying amount of an asset may not be recoverable.
  An impairment loss is recognized if the carrying amount of a long-lived asset
  exceeds the sum of the undiscounted cash flows expected to result from its use
  and eventual disposition. The amount of the loss is measured as the amount by
  which long-lived assets carrying value exceeds its fair value.

F-13

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|2 | SIGNIFICANT ACCOUNTING POLICIES (Contd)
|- | ----------------------------------------

Asset retirement obligations

We recognize a liability for our legal
  obligations associated with the retirement of property, plant and equipment
  when the liability is incurred. A liability is recognized initially at fair
  value and the resulting amount is capitalized as part of the assets carrying
  value unless the asset has been previously written-off, in which case the amount
  is expensed. The liability is accreted over time through periodic charges to
  earnings where the assets have previously been written-off or to mineral property
  costs where the assets are in the preproduction stage. In subsequent periods,
  we adjust the carrying amounts of the asset and the liability for changes in
  estimates of the amount or timing of underlying future cash flows. The fair
  value of the legal obligation for asset retirement is assessed each reporting
  period.

It is reasonably possible that our estimates
  of our ultimate reclamation and site restoration liability could change as a
  result of changes in regulations or cost estimates. The effect of changes in
  estimated costs is recognized on a prospective basis.

Stock-based compensation

Compensation expense for stock options
  granted to employees or non-employees is measured at the fair value using the
  Black-Scholes valuation model and is recognized over the vesting period of the
  options granted. In situations where stock options are granted in exchange for
  services directly related to specific mineral properties, the expense is capitalized
  against that mineral property. The value assigned to stock options shown on
  the balance sheet is subsequently reduced if the options are exercised and the
  amount so reduced is then credited to share capital. Any values assigned to
  stock options that have expired are transferred to contributed surplus.

Income taxes

The liability method of income tax allocation
  is used and is based on differences between financial reporting and tax bases
  of assets and liabilities. Temporary differences arising from the difference
  between the tax basis of an asset or liability and its carrying amount on the
  balance sheet are used to calculate future income tax liabilities or assets.
  Future income tax liabilities or assets are calculated using the tax rates anticipated
  to apply in the periods that the temporary differences are expected to reverse.
  Future tax assets are recognized to the extent that they are considered more
  likely than not to be realized.

Earnings (loss) per common share

Earnings (loss) per share is calculated
  based on the weighted average number of common shares issued and outstanding
  during the year. We follow the treasury stock method in the calculation of diluted
  earnings per share. Under this method, the weighted average number of shares
  includes the potential net issuances of common shares for in-the-money
  options and warrants assuming the proceeds are used to repurchase common shares
  at the average market price during the period, if dilutive. The effect of potential
  issuances of shares under options and warrants would be anti-dilutive if a loss
  is reported, and therefore basic and diluted losses per share are the same.

F-14

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|2 | SIGNIFICANT ACCOUNTING POLICIES (Contd)
|- | ----------------------------------------

Recent accounting pronouncements

Recent accounting pronouncements issued
  which may impact us in the future are as follows:

Goodwill and Intangible Assets

CICA Handbook Section 3064, Goodwill
  and Intangible Assets, replaces Section 3062, Goodwill and Other
  Intangible Assets, and CICA Section 3450, Research and Development
  Costs, and EIC-27, Revenues and expenditures during the pre-operating
  period. The Standard reinforces the principle-based approach to the recognition
  of assets only in accordance with the definition of an asset and the criteria
  for asset recognition; and clarifies the application of the concept of matching
  revenues and expenses such that the current practice of recognizing assets that
  may not meet the definition and recognition criteria are eliminated. This new
  standard also provides guidance for the treatment of pre-production and start-up
  costs and requires that these costs and related revenues be reflected in earnings.
  The changes are effective for interim and annual financial statements beginning
  January 1, 2009. We have not yet determined the impact of the adoption of this
  change on the disclosure in our financial statements.

International Financial Reporting
  Standards

We have been monitoring the deliberations
  and progress being made by accounting standard setting bodies and securities
  regulators in Canada and United States with respect to their plans regarding
  convergence to International Financial Reporting Standards (IFRS):

- In February 2008, the Canadian Accounting Standards
      Board confirmed that publicly listed companies will be required to adopt
      IFRS for interim and annual financial statements relating to fiscal years
      beginning on or after January 1, 2011. Early adoption may be permitted,
      however, exemptive relief requires approval of the Canadian Securities Administrators.
- In August 2008, the Securities and Exchange Commission
      of the United States announced that it would seek public comments on a proposed
      roadmap for the potential mandatory adoption of IFRS beginning in 2014 for
      large accelerated filers, accelerated filers in 2015 and then remaining
      public companies in 2016.

In preparation for the changeover from
  GAAP to IFRS, we commenced the planning process during the second quarter of
  2008. Specific initiatives are underway and others have been planned for the
  transitioning from GAAP to IFRS. Current status of the project is as follows:

Resources

- We have retained the service of a major public
      accounting firm to provide technical and process management assistance for
      the project.
- We will continue to invest in training and resources
      to ensure a timely and effective conversion.

F-15

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|2 | SIGNIFICANT ACCOUNTING POLICIES (Contd)
|- | ----------------------------------------

Recent accounting pronouncements (Cont)

International Financial Reporting
  Standards (Cont)

Process

- A diagnostic assessment of the key impact areas
      was completed.
- A detailed assessment of accounting and measurement
      differences between IFRS and Canadian GAAP on current accounting policies,
      as well as new policies anticipated to be implemented as we transition to
      a producer, is currently underway.
- Initial findings and observations from the work
      completed to date will serve as an input in establishing the key parameters
      to develop solutions during the design phase of the project.
- An initial assessment of exemptions available under
      IFRS 1, First-time Adoption of IFRSs, has been completed.
- A high-level impact assessment of IFRS conversion
      on our IT systems and tax processes is underway.
- Our audit committee is monitoring our progress
      and is kept informed of issues identified.
- Our external auditor is advised of the progress
      status and issues identified.

We anticipate that there will be changes
  in accounting policies and these changes may materially impact our financial
  statements.

|3 | CHANGES IN ACCOUNTING POLICIES
|- | ------------------------------
|  |                               
|  | a)                            
|  |                               
|  |                               
|  |                               
|  | b)                            
|  |                               
|  |                               

F-16

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|3 | CHANGES IN ACCOUNTING POLICIES
|- | ------------------------------
|  |                               
|  | c)                            
|  |                               
|  |                               
|  |                               
|  | d)                            
|  |                               
|  |                               
|  |                               
|  | e)                            
|  |                               
|  |                               
|  |                               
|  |                               

F-17

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|4 | SILVER BULLION                                                                                                                                                                                                                                                                                                                                                                                                                        
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  | In March 2008, we sold our silver bullion for cash proceeds
        of $39,648,000. As at December 31, 2007, the silver bullion was recorded
        on our balance sheet at a cost of $15,977,000. After taking into account
        fluctuations in foreign exchange, the sale results in a gain of $23,699,000.
        No tax expense was recorded as we have sufficient tax pools to offset
        the taxable gain on the sale.
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|5 | FINANCIAL INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  | As at December 31, 2008, the carrying and fair values
        of our financial instruments by category are as follows:                                                                                                                                                                                                                                                                                                                

| |                                     |  |          |  |  |                 |  |  |           |  |  |             |  |  |              |  |  | 2008    | 
| | ----------------------------------- |  | -------- |  |  | --------------- |  |  | --------- |  |  | ----------- |  |  | ------------ |  |  | ------- | 
| |                                     |  |          |  |  |                 |  |  |           |  |  | Other       |  |  |              |  |  |         | 
| |                                     |  | Held for |  |  | Loans &         |  |  | Available |  |  | financial   |  |  | **Carrying** |  |  | Fair    | 
| |                                     |  | trading  |  |  | **receivables** |  |  | for sale  |  |  | liabilities |  |  | value        |  |  | value   | 
| | Financial assets                    |  | ($)      |  |  | ($)             |  |  | ($)       |  |  | ($)         |  |  | ($)          |  |  | ($)     | 
| | Cash and cash equivalents           |  | 72,013   |  |  | -               |  |  | -         |  |  | -           |  |  | 72,013       |  |  | 72,013  | 
| | Marketable securities (note 5a)     |  | -        |  |  | -               |  |  | 10,923    |  |  | -           |  |  | 10,923       |  |  | 10,923  | 
| | Accounts receivable                 |  | -        |  |  | 2,772           |  |  | -         |  |  | -           |  |  | 2,772        |  |  | 2,772   | 
| | Restricted cash (note 10)           |  | -        |  |  | -               |  |  | 1,793     |  |  | -           |  |  | 1,793        |  |  | 1,793   | 
| | Other investments (note 6)          |  | -        |  |  | -               |  |  | 21,803    |  |  | -           |  |  | 21,803       |  |  | 21,803  | 
| | Convertible debenture (note 5c) (1) |  | 50       |  |  | 5,923           |  |  | -         |  |  | -           |  |  | 5,973        |  |  | 6,904   | 
| |                                     |  | 72,063   |  |  | 8,695           |  |  | 34,519    |  |  | -           |  |  | 115,277      |  |  | 116,208 | 
| | Financial liabilities               |  |          |  |  |                 |  |  |           |  |  |             |  |  |              |  |  |         | 
| | Accounts payable and                |  |          |  |  |                 |  |  |           |  |  |             |  |  |              |  |  |         | 
| | and accrued liabilities             |  | -        |  |  | -               |  |  | -         |  |  | 31,313      |  |  | 31,313       |  |  | 31,313  | 
| | Convertible notes (note 9) (2)      |  | -        |  |  | -               |  |  | -         |  |  | 106,112     |  |  | 106,112      |  |  | 91,191  | 
| |                                     |  | -        |  |  | -               |  |  | -         |  |  | 137,425     |  |  | 137,425      |  |  | 122,504 | 

| | (1) | The fair value of convertible debenture is estimated
        using the discounted cash flow method at market rate on the balance sheet
        date.                             
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                  
| | (2) | The fair value of convertible notes is estimated using
        average market quoted price provied by market makers in over-the-counter
        market on the balance sheet date.

As at December 31, 2007, the fair value
  of all financial instruments approximated their carrying value.

F-18

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|5 | FINANCIAL INSTRUMENTS (Contd)
|- | ------------------------------
|  |                               
|  | (a)                           
|  |                               
|  |                               
|  |                               
|  |                               

| |                                |  | December 31, 2008 |  |  | December 31, 2007 | 
| | ------------------------------ |  | ----------------- |  |  | ----------------- | 
| |                                |  |                   |  |  |                   | 
| |                                |  |                   |  |  |                   | 
| |                                |  | Fair Value        |  |  | Cost              | 
| | Available-For-Sale Shares      |  | ($)               |  |  | ($)               | 
| | Esperanza Silver Corporation   |  | 3,165             |  |  | 3,938             | 
| | Aurcana Corporation            |  | 1,470             |  |  | 1,470             | 
| | Minco Silver Corporation       |  | 4,080             |  |  | 1,854             | 
| | Silvermex Resources Ltd.       |  | 286               |  |  | 245               | 
| | Canplats Resources Corporation |  | 747               |  |  | 41                | 
| | Geologix Explorations Inc.     |  | 188               |  |  | 188               | 
| | Other investments              |  | 987               |  |  | 457               | 
| |                                |  | 10,923            |  |  | 8,193             | 
| | Held-For-Trading Warrants      |  |                   |  |  |                   | 
| | Esperanza Silver Corporation   |  | -                 |  |  | 340               | 
| | Total Marketable Securities    |  | 10,923            |  |  | 8,533             | 

For the year ended December 31, 2008,
  we recognized an unrealized loss of $19,911,000 (2007 -$6,515,000) on marketable
  securities designated as available-for-sale which was recorded in other comprehensive
  loss. This unrealized loss resulted in future income tax expense of $3,393,000
  (2007 -$1,111,000), representing the reversal of the tax benefit arising on
  recognition of previously unrecognized loss carryforwards, with a corresponding
  impact on other comprehensive loss. During the year, we also recorded a write-down
  of $4,891,000 for marketable securities with decline in fair values that were
  assessed as other-than-temporary.

We recorded an unrealized loss on marketable
  securities designated as held-for-trading of $27,000 (2007 - $362,000) during
  the year.

In July 2008, as part of considerations
  received for sale of the Shafter Silver Project (See note 8(xvii)), we received
  15 million common shares of Aurcana Corporation (Aurcana). As at
  the date of the transaction, the Aurcana common shares had a fair value of $6,886,000
  (C$6,900,000).

F-19

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|5 | FINANCIAL INSTRUMENTS (Contd)
|- | ------------------------------
|  |                               
|  | (b)                           
|  |                               
|  |                               
|  |                               
|  | (c)                           
|  |                               
|  |                               
|  |                               
|  |                               
|  |                               
|  |                               
|  |                               
|  | (d)                           
|  |                               
|  |                               

F-20

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|5 | FINANCIAL INSTRUMENTS (Contd)
|- | ------------------------------

Foreign Exchange Risk

We operate projects in seven different
  countries and therefore, foreign exchange risk exposures arise from transactions
  denominated in foreign currencies. Our foreign exchange risk arises primarily
  with respect to the US dollar and Argentine Peso. As at December 31, 2008, our
  exposure to the US dollar is as follows:

| |                                               |  | December 31 |   |  | December 31 |  
| | --------------------------------------------- |  | ----------- | - |  | ----------- | -
| |                                               |  | 2008        |   |  | 2007        |  
| |                                               |  | US$         |   |  | US$         |  
| | Cash and cash equivalents                     |  | 53,659      |   |  | 10,769      |  
| | Restricted cash                               |  | 1,637       |   |  | 1,637       |  
| | Accounts payable and accrued liabilities      |  | (8,387      | ) |  | (3,028      | )
| | Convertible notes (Face value of $138million) |  | (106,112    | ) |  | -           |  
| |                                               |  |             |   |  |             |  
| |                                               |  | (59,203     | ) |  | 9,378       |  

As at December 31, 2008, with other
  variables unchanged, a $0.01 strengthening (weakening) of the US dollar against
  the Canadian dollar would decrease (increase) our net earnings by $59,000.

As at December 31, 2008, our exposure
  to Argentine Peso (ARS) was ARS$1,800,000, which includes ARS$103,364,000
  in value added tax recoverable, net of ARS$101,563,000 in accounts payable and
  accrued liabilities. With other variables unchanged, a ARS$0.01 strengthening
  (weakening) of Argentine Peso against the Canadian dollar would increase (decrease)
  our net earnings by $6,000.

Interest Rate Risk

Our interest rate risk mainly arises
  from the interest rate impact on our cash and cash equivalents. Cash and cash
  equivalents receive interest based on market interest rates. Our long-term note
  receivable and long-term debt have fixed interest rates and are not exposed
  to interest rate risk.

As at December 31, 2008, the weighted
  average interest rate of our cash equivalents investment was 0.55% . With other
  variables unchanged, a 1% increase (decrease) in the interest rate would increase
  (decrease) our net earnings by $1,584,000.

Commodity Price Risk

Our profitability and long-term viability
  will depend, in large part, on the market price of silver, gold, tin, zinc,
  lead and copper. The market prices for these metals are volatile and are affected
  by numerous factors beyond our control, including:

- global or regional consumption patterns;
- the supply of, and demand for, these metals;
- speculative activities;
- the availability and costs of metal substitutes;
- expectations for inflation; and
- political and economic conditions, including interest
      rates and currency values.

F-21

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|5 | FINANCIAL INSTRUMENTS (Contd)
|- | ------------------------------

Commodity Price Risk (Cont)

We cannot predict the effect of these
  factors on metal prices. A decrease in the market price of silver and other
  metals would affect the profitability of the Pirquitas Project and could affect
  our ability to finance the exploration and development of any of our other mineral
  properties. The market price of silver and other metals may be subject to significant
  fluctuations. In particular, an increase in worldwide supply, and consequent
  downward pressure on prices, may result over the longer term from increased
  silver production from mines developed or expanded as a result of current metal
  price levels.

Credit Risk

Credit risk arises from the non-performance
  by counterparties of contractual financial obligations. Our credit risk arises
  primarily with respect to our money market investments, convertible debenture
  receivable and investment in asset-backed commercial papers.

We manage our credit risk on money market
  investments by investing only in obligations of any Province of Canada, Canada
  or the United States of America or their respective agencies, obligations of
  enterprises sponsored by any of the above governments; bankers acceptances
  purchased in the secondary market and having received the highest credit rating
  from a recognized rating agency in Canada or the United States, with a term
  of less than 90 days; and bank term deposits and bearer deposit notes, with
  a term of less than 90 days.

Our maximum exposure to credit risk
  at the reporting date is the carrying value of cash and cash equivalents, other
  receivables, convertible debenture receivable (see note 5c) and other investments
  (see note 6). At December 31, 2008, there were no significant concentrations
  of credit risk and no amounts were held as collateral.

Liquidity Risk

Liquidity risk represents our ability
  to fund future operating activities and investments. We manage liquidity risk
  by maintaining adequate cash and cash equivalent balances to meet short-term
  business requirements. If necessary, we may raise funds through the issuance
  of debt, equity, or monetization of non core assets. For example, in February
  2008, we completed a $138,000,000, 4.5% convertible debenture due in 2028. In
  July 2008, we closed the sale of our Shafter Silver Project for total considerations
  of $38,133,000 (C$38,210,000). Subsequent to year end, we raised $92,650,000
  through public offering of common shares (see note 19).

We ensure that there is sufficient capital
  to meet our long-term obligations by continuously monitoring and reviewing actual
  and forecasted cash flows, and match the maturity profile of financial assets
  to development, capital and operating needs. We believe our sources will be
  sufficient to cover our short-term and long-term cash requirements.

See Note 17  Commitments
  for contractual undiscounted cash flow requirements for financial liabilities
  as at December 31, 2008.

F-22

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|6 | OTHER INVESTMENTS
|- | -----------------

As at December 31, 2008, we had a total
  of C$57,102,000 invested in Canadian asset-backed commercial paper (ABCP).
  At the dates at which we acquired the investments, the non-bank sponsored ABCP
  was rated R-1 high by DBRS Limited (DBRS), the highest credit rating
  for commercial paper. In August 2007, the ABCP market experienced liquidity
  problems and was subsequently frozen. In September 2007, a Pan Canadian Committee
  (the Committee) consisting of a panel of major ABCP investors was
  formed to restructure the affected ABCP trusts.

At December 31, 2007, based on the limited
  data available, we estimated the fair values of our ABCP investments to be $45,645,000
  using a valuation technique which incorporates a probability weighted approach
  applied to discounted future cash flows and an impairment of $12,232,000 was
  recorded in 2007.

On December 24, 2008, the Committee confirmed
  that an agreement has been reached with all key stakeholders, including the
  involvement of provincial and federal governments. In January 2009, the Committee
  successfully obtained the final court approval to complete the restructuring.
  On January 28, 2009, we received the restructured notes with a face value of
  C$57,142,000. At the time of receipt of the restructured notes, we also received
  a retroactive interest payment on our original notes covering the period from
  August 2007 to August 2008 of $1,630,000.

The face value of the restructured notes
  is allocated as follow:

| | o | C$26,542,000 in Class A-1 Notes          
| | - | -----------------------------------------
| |   | •                                        
| |   | •                                        
| |   | •                                        
| |   |                                          
| | o | C$21,944,000 in Class A-2 Notes          
| |   | •                                        
| |   | •                                        
| |   | •                                        
| |   |                                          
| | o | C$3,983,000 in Class B Notes             
| |   | •                                        
| |   | •                                        
| |   | •                                        
| |   |                                          
| | o | C$1,623,000 in Class C Notes             
| |   | •                                        
| |   | •                                        
| |   |                                          
| | o | C$658,000 in Class 3 IA Tracking Notes   
| |   | •                                        
| |   | •                                        
| |   |                                          
| | o | C$2,392,000 in Class 13 IA Tracking Notes
| |   | •                                        
| |   | •                                        

F-23

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|6 | OTHER INVESTMENTS (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  | As no secondary market has been developed for these
        restructured notes as at December 31, 2008, we estimated the fair value
        of our restructured notes using a valuation technique which incorporates
        a probability weighted approach applied to discounted future cash flows
        from the restructured notes and the fair value of our investments based
        on the indicative values contained in a report issued by J.P. Morgan,
        financial advisor to the Committee. Based on our best estimate, the fair
        value of our restructured notes at December 31, 2008 was $21,803,000,
        resulting in an impairment of $17,903,000 recorded in 2008. There is currently
        no certainty regarding the development of a secondary market for the restructured
        notes and therefore the fair value reported may change materially in subsequent
        periods. In July 2008, we initiated legal action against a Canadian chartered
        bank and DBRS by filing a writ and statement of claim in the Supreme Court
        of British Columbia to recover any losses that may occur with respect
        to the ultimate recovery of our ABCP investments. There can be no assurance
        that the outcome of this litigation will be favourable to us.
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|7 | VALUE ADDED TAX RECOVERABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  | We have recorded the value added tax (VAT)
        paid in Argentina and related to the Pirquitas property as a recoverable
        asset. Argentinean law states that VAT paid is recoverable once the company
        reaches the production stage. In October 2006, we made a production decision
        on this property and any VAT paid in Argentina related to Pirquitas is
        expected to be recoverable through production from the proven and probable
        reserves from this property. The amount recoverable at December 31, 2008
        is estimated to be $30,332,000 (2007 - $9,642,000).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  | In countries where we have paid VAT and where there
        is uncertainty of the recoverability, the VAT payments have either been
        deferred within mineral property costs or expensed if it relates to mineral
        exploration. If we ultimately recover amounts that have been deferred,
        the amount received will be applied to reduce mineral property costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|8 | MINERAL PROPERTY COSTS AND PROPERTY, PLANT AND EQUIPMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| |                                |  | December 31, 2008 |  |  | December 31, 2007 |  
| | ------------------------------ |  | ----------------- |  |  | ----------------- | -
| |                                |  |                   |  |  | Accum.            |  
| |                                |  | Cost              |  |  | Amort.            |  
| |                                |  | **$**             |  |  | **$**             |  
| |                                |  |                   |  |  |                   |  
| | Mineral property costs         |  | 162,872           |  |  | -                 |  
| | Development property costs     |  | 95,960            |  |  | -                 |  
| | Construction in progress       |  | 142,777           |  |  | -                 |  
| | Mining equipment and machinery |  | 18,728            |  |  | (869              | )
| | Other                          |  | 2,829             |  |  | (1,107            | )
| |                                |  | 423,166           |  |  | (1,976            | )

During the year, the Company recorded
  $1,023,000 (2007  $725,000; 2006 - $111,000) of depreciation on property,
  plant, and equipment, of which $288,000 (2007  $296,000; 2006 - $125,000)
  was charged to the Consolidated Statements of Earnings (Loss) and Comprehensive
  Loss and $735,000 (2007 - $429,000; 2006  ($14,000)) deferred as mineral
  property costs. We reclassified $17,835,000 of pre-operating costs incurred
  during the year ended December 31, 2008 from construction in progress to development
  property costs.

F-24

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|8 | MINERAL PROPERTY COSTS AND PROPERTY, PLANT AND
      EQUIPMENT (Contd)
|- | -----------------------------------------------------------------------

At December 31, mineral property costs
  are as follows:

| |                      |  |             |  |  | Exploration |  |  |            |  |  |             |  |  |             | 
| | -------------------- |  | ----------- |  |  | ----------- |  |  | ---------- |  |  | ----------- |  |  | ----------- | 
| |                      |  |             |  |  | and         |  |  |            |  |  | Total       |  |  | Total       | 
| |                      |  | Acquisition |  |  | development |  |  | Future tax |  |  | December 31 |  |  | December 31 | 
| |                      |  | costs       |  |  | costs       |  |  | effects    |  |  | 2008        |  |  | 2007        | 
| |                      |  | $           |  |  | $           |  |  | $          |  |  | **$**       |  |  | $           | 
| |                      |  |             |  |  |             |  |  |            |  |  |             |  |  |             | 
| | Exploration Projects |  |             |  |  |             |  |  |            |  |  |             |  |  |             | 
| |                      |  |             |  |  |             |  |  |            |  |  |             |  |  |             | 
| | Argentina            |  |             |  |  |             |  |  |            |  |  |             |  |  |             | 
| | Diablillos           |  | 4,515       |  |  | 10,288      |  |  | -          |  |  | 14,803      |  |  | 12,231      | 
| | Other                |  | 19          |  |  | 170         |  |  | -          |  |  | 189         |  |  | 208         | 
| | Australia            |  |             |  |  |             |  |  |            |  |  |             |  |  |             | 
| | Bowdens              |  | 8,901       |  |  | 7,223       |  |  | 2,710      |  |  | 18,834      |  |  | 23,126      | 
| | Other                |  | 2           |  |  | 202         |  |  | -          |  |  | 204         |  |  | 249         | 
| | Canada               |  |             |  |  |             |  |  |            |  |  |             |  |  |             | 
| | Silvertip            |  | 1,485       |  |  | 257         |  |  | -          |  |  | 1,742       |  |  | 2,114       | 
| | Snowfield            |  | 102         |  |  | 7,617       |  |  | -          |  |  | 7,719       |  |  | 4,543       | 
| | Sulphurets           |  | 1,954       |  |  | 1,025       |  |  | -          |  |  | 2,979       |  |  | 3,692       | 
| | Sunrise Lake         |  | 1,008       |  |  | 58          |  |  | -          |  |  | 1,066       |  |  | 1,317       | 
| | Chile                |  |             |  |  |             |  |  |            |  |  |             |  |  |             | 
| | Challacollo          |  | 2,411       |  |  | 4,273       |  |  | 342        |  |  | 7,026       |  |  | 8,458       | 
| | Other                |  | 41          |  |  | 224         |  |  | -          |  |  | 265         |  |  | 285         | 
| | Mexico               |  |             |  |  |             |  |  |            |  |  |             |  |  |             | 
| | Pitarrilla           |  | 10,981      |  |  | 44,477      |  |  | 1,534      |  |  | 56,992      |  |  | 51,744      | 
| | San Marcial          |  | 1,021       |  |  | 644         |  |  | 41         |  |  | 1,706       |  |  | 2,043       | 
| | Veta Colorada        |  | 3,689       |  |  | 790         |  |  | 210        |  |  | 4,689       |  |  | 4,970       | 
| | Other                |  | 826         |  |  | 1,439       |  |  | -          |  |  | 2,265       |  |  | 2,494       | 
| | Peru                 |  |             |  |  |             |  |  |            |  |  |             |  |  |             | 
| | Berenguela           |  | 10,563      |  |  | 2,740       |  |  | 5,710      |  |  | 19,013      |  |  | 22,211      | 
| | San Luis             |  | 354         |  |  | 14,026      |  |  | 571        |  |  | 14,951      |  |  | 11,591      | 
| | Other                |  | 21          |  |  | 141         |  |  | -          |  |  | 162         |  |  | -           | 
| | United States        |  |             |  |  |             |  |  |            |  |  |             |  |  |             | 
| | Candelaria           |  | 2,434       |  |  | 3,008       |  |  | 330        |  |  | 5,772       |  |  | 6,714       | 
| | Maverick Springs     |  | 565         |  |  | 1,884       |  |  | 46         |  |  | 2,495       |  |  | 2,725       | 
| |                      |  | 50,892      |  |  | 100,486     |  |  | 11,494     |  |  | 162,872     |  |  | 160,715     | 
| | Development Project  |  |             |  |  |             |  |  |            |  |  |             |  |  |             | 
| |                      |  |             |  |  |             |  |  |            |  |  |             |  |  |             | 
| | Argentina            |  |             |  |  |             |  |  |            |  |  |             |  |  |             | 
| | Pirquitas            |  | 45,981      |  |  | 39,138      |  |  | 10,841     |  |  | 95,960      |  |  | 86,913      | 
| |                      |  |             |  |  |             |  |  |            |  |  |             |  |  |             | 
| |                      |  | 96,873      |  |  | 139,624     |  |  | 22,335     |  |  | 258,832     |  |  | 247,628     | 

F-25

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|8 | MINERAL PROPERTY COSTS AND PROPERTY, PLANT
        AND EQUIPMENT (Contd)
|- | -------------------------------------------------------------------------
|  |                                                                          
|  | i)                                                                       
|  |                                                                          
|  |                                                                          
|  |                                                                          
|  | ii)                                                                      
|  |                                                                          
|  |                                                                          
|  |                                                                          
|  | iii)                                                                     
|  |                                                                          
|  |                                                                          
|  |                                                                          
|  | iv)                                                                      
|  |                                                                          
|  |                                                                          
|  |                                                                          
|  | v)                                                                       
|  |                                                                          
|  |                                                                          
|  |                                                                          
|  | vi)                                                                      
|  |                                                                          
|  |                                                                          
|  |                                                                          
|  | vii)                                                                     
|  |                                                                          
|  |                                                                          

F-26

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|8 | MINERAL PROPERTY COSTS AND PROPERTY, PLANT
        AND EQUIPMENT (Contd)
|- | -------------------------------------------------------------------------
|  |                                                                          
|  | viii)                                                                    
|  |                                                                          
|  |                                                                          
|  |                                                                          
|  | ix)                                                                      
|  |                                                                          
|  |                                                                          
|  |                                                                          
|  | x)                                                                       
|  |                                                                          
|  |                                                                          
|  |                                                                          
|  | xi)                                                                      
|  |                                                                          
|  |                                                                          
|  |                                                                          
|  | xii)                                                                     
|  |                                                                          
|  |                                                                          
|  |                                                                          
|  | xiii)                                                                    
|  |                                                                          
|  |                                                                          

F-27

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|8 | MINERAL PROPERTY COSTS AND PROPERTY, PLANT
        AND EQUIPMENT (Contd)
|- | -------------------------------------------------------------------------
|  |                                                                          
|  | xiv)                                                                     
|  |                                                                          
|  |                                                                          
|  |                                                                          
|  |                                                                          

| |                                      |  | $(000 | )
| | ------------------------------------ |  | ----- | -
| | Cash                                 |  | 170   |  
| | Receivables and other current assets |  | 27    |  
| | Mineral property interest            |  | 4,098 |  
| | Current liabilities                  |  | (321  | )
| | Non-controlling interest             |  | (536  | )
| |                                      |  | 3,438 |  

| | xv)  | Candelaria, U.S.A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |      | We own a 100% interest in the Candelaria silver property
        in Nevada and have lodged environmental bonding in the amount of $1,637,000
        (note 10) relating to this property.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | xvi) | Maverick Springs, U.S.A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |      | In June 2003, we signed an exploration and development
        agreement with Vista Gold Corp. (Vista) in which we will have
        exposure to the silver resources hosted in the Maverick Springs gold-silver
        property in northern Nevada, U.S.A. We and Vista have entered into a joint
        venture agreement governing their respective rights and obligations in
        respect of the property. Subsequent to October 7, 2006, Newmont Mining
        Corporation (Newmont) had a one time back-in right to acquire
        a 51% interest in the property. Newmonts back-in right expired unexercised
        in 2007.

F-28

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|8 | MINERAL PROPERTY COSTS AND PROPERTY, PLANT
        AND EQUIPMENT (Contd)
|- | -------------------------------------------------------------------------
|  |                                                                          
|  | xvii)                                                                    
|  |                                                                          
|  |                                                                          
|  |                                                                          
|  |                                                                          

|9 | CONVERTIBLE NOTES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  | In February 2008, we sold $138,000,000 in
        senior convertible notes (Notes) for net proceeds of $132,753,000
        after payment of commissions and expenses related to the offering. The
        unsecured Notes mature on March 1, 2028 and bear an interest rate of 4.5%
        per annum, payable semi-annually. The Notes will be convertible into our
        common shares at a fixed conversion rate, subject to certain anti-dilution
        adjustments, only in the following events:                                                                                                                                                                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  | a.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | b.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | c.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | d.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  | e.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  | On conversion, holders of the Notes will receive
        cash and, if applicable, common shares (or, at our election, in lieu of
        such common shares, cash or any combination of cash and common shares).
        In addition, if certain fundamental changes occur to us, holders of the
        Notes may be entitled to an increased conversion rate. The Notes will
        be convertible into our common shares at an initial conversion rate of
        23.0792 common shares per $1,000 principal amount of Notes converted,
        representing an initial conversion price of approximately $43.33 per common
        share.                                                                                                                                                                                                     
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  | Holders of the Notes will have the right to
        require us to repurchase all or part of their Notes on March 1 of each
        of 2013, 2018 and 2023, and upon certain fundamental corporate changes.
        The repurchase price will be equal to 100% of the principal amount of
        the Notes being converted, plus accrued and unpaid interest to, but excluding,
        the repurchase date. Subject to specified conditions, we shall pay the
        purchase price in cash. On and after March 5, 2013, we may redeem all
        or part of the Notes for cash at a redemption price equal to 100% of the
        principal amount of the Notes being redeemed, plus accrued and unpaid
        interest to, but excluding, the redemption date. All principal and interest
        payments will be denominated in US Dollars.

F-29

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|9 | CONVERTIBLE NOTE(Contd)
|- | ------------------------

The face value of the Notes has been
  allocated as follows for accounting purposes:

| | Allocation of gross proceeds          |  |         |  
| | ------------------------------------- |  | ------- | -
| | Gross proceeds                        |  | 138,000 |  
| | Fair value of debt component          |  | (99,144 | )
| | Fair value of equity component        |  | 38,856  |  
| |                                       |  |         |  
| | Convertible notes                     |  |         |  
| | Opening balance                       |  | 99,144  |  
| | Accretion expense                     |  | 4,902   |  
| | Interest accrued                      |  | 5,223   |  
| | Interest paid                         |  | (3,157  | )
| | Foreign exchange loss on revaluation  |  | -       |  
| | Ending balance                        |  | 106,112 |  
| |                                       |  |         |  
| | Accrued interest on convertible notes |  | 2,066   |  
| | Long-term convertible notes           |  | 104,046 |  
| | Total convertible notes               |  | 106,112 |  

The fair value of the debt portion of
  the Notes at initial recognition was estimated using a discounted cash flow
  model method. The fair value of the equity component was estimated using the
  residual value method. The debt component of the Notes is accreted over an expected
  life of 5 years using the effective interest method. Total financing fees associated
  with the transaction were $5,246,000, of which $3,773,000 was charged to net
  income for the period and $1,473,000 was charged to equity.

During 2008, accretion expense and interest
  expense related to the convertible notes were $5,033,000 and $5,373,000 respectively;
  $3,750,000 of accretion expense and $3,931,000 of interest expense were capitalized
  to construction in progress during the period resulting in $1,283,000 of accretion
  and $1,443,000 of interest expensed in the period.

|10 | ASSET RETIREMENT OBLIGATIONS                                                                                                                                                                                                                                                            
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                         
|   | During the year ended December 31, 2008, we expensed
        $318,000 (2007 - $728,000) in on-going, non- legally required environmental
        and reclamation costs, accretion of asset retirement obligations and changes
        in the provision for asset retirement obligations.
|   |                                                                                                                                                                                                                                                                                         
|   | At December 31, 2008, $3,463,000 (2007 - $3,902,000)
        was recorded by us as a provision for future asset retirement obligation
        expenses for our various mineral properties, of which $234,000 (2007 -
        $1,041,000) is considered current.                         

F-30

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|10 | ASSET RETIREMENT OBLIGATIONS (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Our asset retirement obligations relate to legal obligations
        associated with site restoration and clean-up costs of our various mineral
        properties. The properties that comprise the majority of the obligations
        are the Duthie and Silver Standard Mine properties located in British
        Columbia, Canada, Veta Colorada property located in Mexico, San Luis in
        Peru and Pirquitas property located in Argentina.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | A reconciliation of the provision for asset retirement
        obligations is as follows:                                                                                                                                                                                                                                                                                                                                                               

| |                                        |  | 2008  |   |  | 2007  |  
| | -------------------------------------- |  | ----- | - |  | ----- | -
| |                                        |  | **$** |   |  | **$** |  
| |                                        |  |       |   |  |       |  
| | Balance, beginning of year             |  | 3,902 |   |  | 2,925 |  
| |                                        |  |       |   |  |       |  
| | Liabilities settled during the year    |  | (558  | ) |  | (455  | )
| | Accretion expense                      |  | 148   |   |  | 248   |  
| | Foreign exchange (loss) gain           |  | (800  | ) |  | 562   |  
| | Revisions and new estimated cash flows |  | 771   |   |  | 622   |  
| | Balance, end of year                   |  | 3,463 |   |  | 3,902 |  
| |                                        |  |       |   |  |       |  
| | Balance sheet presentation             |  |       |   |  |       |  
| | Current portion                        |  | 234   |   |  | 1,041 |  
| | Long-term
      portion                |  | 3,229 |   |  | 2,861 |  
| | Balance, end of year                   |  | 3,463 |   |  | 3,902 |  

The provision for asset retirement obligations
  is based on the following key assumptions:

- Present value of total asset retirement obligations
      is $3,463,000 (2007 - $3,902,000), reflecting payments for approximately
      the next 10 years
- Total undiscounted value of these payments is $7,202,000
      (2007 - $5,408,000)
- Present value determined using a credit adjusted
      risk-free rate of 8% - 12%

At December 31, 2008, we have lodged
  $1,793,000 (2007 - $1,830,000) in security deposits with various government
  agencies in relation to our reclamation obligations. Of the amount lodged, $156,000
  (2007 -$193,000) is in the form of cash deposits and $1,637,000 (2007 - $1,637,000)
  as security for a $1,637,000 bond for the Candelaria property.

F-31

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|11 | SHAREHOLDERS EQUITY
|-- | --------------------
|   |                     
|   | (a)                 
|   |                     
|   |                     
|   |                     
|   |                     
|   |                     
|   | (b)                 
|   |                     
|   |                     
|   |                     
|   |                     

| |                                    |  |           |   |  | 2008         |  |  |           |   |  | 2007         |  |  |           |   |  | 2006         | 
| | ---------------------------------- |  | --------- | - |  | ------------ |  |  | --------- | - |  | ------------ |  |  | --------- | - |  | ------------ | 
| |                                    |  | Number    |   |  | **Weighted** |  |  | Number    |   |  | **Weighted** |  |  | Number    |   |  | **Weighted** | 
| |                                    |  | of shares |   |  | average      |  |  | of shares |   |  | average      |  |  | of shares |   |  | average      | 
| |                                    |  |           |   |  | exercise     |  |  |           |   |  | exercise     |  |  |           |   |  | exercise     | 
| |                                    |  |           |   |  | price        |  |  |           |   |  | price        |  |  |           |   |  | price        | 
| |                                    |  |           |   |  | C$           |  |  |           |   |  | C$           |  |  |           |   |  | C$           | 
| |                                    |  |           |   |  |              |  |  |           |   |  |              |  |  |           |   |  |              | 
| | Options outstanding at January 1   |  | 4,419,350 |   |  | 27.77        |  |  | 4,455,950 |   |  | 22.68        |  |  | 2,613,200 |   |  | 12.85        | 
| | Granted                            |  | 810,000   |   |  | 15.47        |  |  | 985,000   |   |  | 37.54        |  |  | 2,551,500 |   |  | 29.30        | 
| | Exercised                          |  | (186,100  | ) |  | 12.46        |  |  | (886,600  | ) |  | 13.30        |  |  | (668,750  | ) |  | 9.79         | 
| | Expired / Forfeited                |  | (27,000   | ) |  | 24.31        |  |  | (135,000  | ) |  | 26.16        |  |  | (40,000   | ) |  | 17.67        | 
| | Options outstanding at December 31 |  | 5,016,250 |   |  | 26.37        |  |  | 4,419,350 |   |  | 27.77        |  |  | 4,455,950 |   |  | 22.68        | 
| | Options exercisable at December 31 |  | 2,962,250 |   |  | 29.03        |  |  | 2,310,350 |   |  | 26.04        |  |  | 2,253,200 |   |  | 24.48        | 

As of December 31, 2008, incentive stock
  options represent 8.0% (2007  7.1%) of issued and outstanding common capital.
  The aggregate intrinsic value of vested share options (the market value less
  the exercise value) at December 31, 2008 was $2,576,000 (2007 - $23,411,000).

F-32

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|11 | SHAREHOLDERS EQUITY (Contd)
|-- | -----------------------------

The following table summarizes information
  about stock options outstanding and exercisable at December 31, 2008:

Weighted averageOptions
      
      
      Options
      
      
      
      
      
      remaining contractualExercise price
      
      outstanding
      
      
      exercisable
      
      
      Expiry date
      
      
      lifeC$
      
      
      
      
      
      
      
      
      
      
      (years)10.50  18.73
      
      1,599,750
      
      
      969,750
      
      
      Oct 2009  Dec 2018
      
      
      1.721.30  29.02
      
      1,081,500
      
      
      165,000
      
      
      Jul 2011  Aug 2013
      
      
      3.832.08  40.62
      
      2,335,000
      
      
      1,827,500
      
      
      Dec 2011  Mar 2013
      
      
      3.226.37
      
      5,016,250
      
      
      2,962,250
      
      
      
      
      
      3.7


During the year ended December 31, 2008,
  810,000 (2007  985,000) options were granted to employees, directors and
  consultants at a weighted average strike price of C$15.47 (2007 - C$37.54) and
  average fair value of C$8.59 (2007 - C$11.61) per option based on the Black-Scholes
  option pricing model. We amortize the fair value of stock options on a graded
  basis over the respective vesting period of the stock options. At December 31,
  2008, the non-vested stock option expense not yet recognized was C$9,372,000
  (2007 - C$13,412,000) and this expense is expected to be recognized over the
  next 3 years.

The allocation of fair value of options
  was as follow:

| |                                                                 |  | 2008  |  |  | 2007   |  |  | 2006   | 
| | --------------------------------------------------------------- |  | ----- |  |  | ------ |  |  | ------ | 
| |                                                                 |  | **$** |  |  | **$**  |  |  | **$**  | 
| | Consolidated Balance Sheets                                     |  |       |  |  |        |  |  |        | 
| | Mineral property costs                                          |  | 61    |  |  | 488    |  |  | 662    | 
| |                                                                 |  |       |  |  |        |  |  |        | 
| | Consolidated Statements of Earnings (Loss),                     |  |       |  |  |        |  |  |        | 
| | and Comprehensive Loss                                          |  |       |  |  |        |  |  |        | 
| | Stock based compensation - Employee salaries
      and benefits |  | 7,625 |  |  | 11,346 |  |  | 8,777  | 
| | Stock based compensation - General and administration           |  | 1,976 |  |  | 2,609  |  |  | 2,628  | 
| |                                                                 |  |       |  |  |        |  |  |        | 
| |                                                                 |  | 9,601 |  |  | 13,955 |  |  | 11,405 | 
| |                                                                 |  |       |  |  |        |  |  |        | 
| | Total stock based compensation                                  |  | 9,662 |  |  | 14,443 |  |  | 12,067 | 

F-33

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|11 | SHAREHOLDERS EQUITY (Contd)
|-- | -----------------------------

The fair value of stock options for
  all options issued, re-priced or extended was estimated at the grant date based
  on the Black-Scholes option pricing model, using the following weighted average
  assumptions:

| |                                     |  | 2008 |  |  | 2007 |  |  | 2006 | 
| | ----------------------------------- |  | ---- |  |  | ---- |  |  | ---- | 
| |                                     |  |      |  |  |      |  |  |      | 
| | Expected dividend yield (%)         |  | Nil  |  |  | Nil  |  |  | Nil  | 
| | Average risk-free interest rate (%) |  | 3.1  |  |  | 4.2  |  |  | 4.0  | 
| | Expected life (years)               |  | 5.8  |  |  | 3.0  |  |  | 3.3  | 
| | Expected volatility (%)             |  | 56   |  |  | 42   |  |  | 47   | 

| |     | Option pricing models require the input of highly subjective
        assumptions. The expected life of the options considered such factors
        as the average length of time similar option grants in the past have remained
        outstanding prior to exercise and the vesting period of the grants. Volatility
        was estimated based upon historical price observations over the expected
        term. Changes in the subjective input assumptions can materially affect
        the estimated fair value of the options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (c) | Convertible Senior Notes due 2028                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | In February 2008, we sold $138,000,000 in senior convertible
        notes (Notes). The Notes will be convertible into Silver Standard
        common shares at a fixed conversion rate of $43.33 per common share upon
        specified events. On conversion, holders of the Convertible Notes will
        receive cash and, if applicable, common shares (or, at our election, in
        lieu of such common shares, cash or any combination of cash and common
        shares). The convertible notes mature on March 1, 2028.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (d) | Deferred Share Units                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | Effective June 2008, we established a Deferred share
        unit (DSUs) plan for non-executive Directors. DSUs are issued
        at the market value of our common shares at the date of grant, in addition,
        directors may elect to receive a portion of their annual compensation
        in the form of DSUs which are issued at the market value of our common
        shares on a quarterly basis. The DSUs vest immediately and are redeemable
        in cash on the date the director ceases to be a director of the Company.
        For the year ended December 31, 2008, a total of 23,000 DSUs were granted
        with fair value of $492,000 (C$525,000). As a result of the decline in
        our share price during the year, a reversal of $64,000 (C$78,000) in fair
        value was recorded to general and administration expense. As at December
        31, 2008, 23,000 DSUs were outstanding with a fair value of $365,000 (C$447,000)
        recorded in accrued liabilities. No DSUs were exercised in 2008.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (e) | Diluted Earnings (Loss) Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | The shares issuable pursuant to the terms of the convertible
        debenture have not been included in the calculation of diluted earnings
        (loss) per share as the impact would be anti-dilutive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

F-34

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|12 | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | During the year ended December 31, 2008, we
        recorded administrative, technical services and expense reimbursements
        of $1,276,000 (2007 - $396,000; 2006 - $320,000) from companies related
        by common directors or officers. At December 31, 2008, accounts receivable
        include $42,000 (2007 - $112,000) from these related parties. Any amounts
        due from related parties are non-interest bearing and without specific
        terms of repayment. Any transactions for expense reimbursement with related
        parties are at normal business terms.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|13 | CAPITAL RISK MANAGEMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Our objectives when managing capital are:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | In order to facilitate the management of our
        capital requirements, we prepare annual expenditure budgets and continuously
        monitor and review actual and forecasted cash flow. The annual and updated
        budgets are approved by the Board of Directors.                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | To maintain the capital structure, we may,
        from time to time, attempt to issue new shares, issue new debt or dispose
        of non-core assets. We expect our current capital resources will be sufficient
        to carry our exploration and development plans and operations through
        the current operating period.                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|14 | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| |                                                     |  | 2008   |   |  | 2007    |   |  | 2006   |  
| | --------------------------------------------------- |  | ------ | - |  | ------- | - |  | ------ | -
| |                                                     |  |        |   |  |         |   |  |        |  
| | Statutory tax rate                                  |  | 31.00% |   |  | 34.10%  |   |  | 34.10% |  
| |                                                     |  |        |   |  |         |   |  |        |  
| |                                                     |  | **$**  |   |  | **$**   |   |  | **$**  |  
| | Earnings (loss) for the year before taxes           |  | 12,022 |   |  | (32,943 | ) |  | 14,115 |  
| |                                                     |  |        |   |  |         |   |  |        |  
| | Provision for income taxes based on statutory rates |  | 3,727  |   |  | (11,234 | ) |  | 4,813  |  
| | Differences in foreign tax rates                    |  | 2,432  |   |  | 13      |   |  | (9     | )
| | Foreign exchange                                    |  | (1,033 | ) |  | 402     |   |  | 116    |  
| | Tax benefits not recognized and other               |  | 12,842 |   |  | 11,841  |   |  | (4,920 | )
| |                                                     |  | 17,968 |   |  | 1,022   |   |  | -      |  

F-35

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|14 | INCOME TAXES (Contd)
|-- | ---------------------
|   |                      
|   | ii)                  

| |                                                       |  | 2008     |   |  | 2007    |  
| | ----------------------------------------------------- |  | -------- | - |  | ------- | -
| |                                                       |  | **$**    |   |  | **$**   |  
| | Future tax assets                                     |  |          |   |  |         |  
| | Property, plant and equipment and resource properties |  | 88,825   |   |  | 43,041  |  
| | Capital and non-capital loss carry-forwards           |  | 22,604   |   |  | 22,426  |  
| | Foreign resource pools                                |  | 13,429   |   |  | 11,970  |  
| | Share issuance costs                                  |  | 1,856    |   |  | 2,231   |  
| | Marketable securities                                 |  | 915      |   |  | -       |  
| | Other investments                                     |  | 3,227    |   |  | 1,640   |  
| | Other                                                 |  | -        |   |  | 2,219   |  
| | Total future tax assets                               |  | 130,856  |   |  | 83,527  |  
| |                                                       |  |          |   |  |         |  
| | Future tax liabilities                                |  |          |   |  |         |  
| | Resource properties                                   |  | (127,095 | ) |  | (80,614 | )
| | Marketable securities                                 |  | -        |   |  | (2,625  | )
| | Other                                                 |  | (2,067   | ) |  | -       |  
| | Total future tax liabilities                          |  | (129,162 | ) |  | (83,239 | )
| |                                                       |  |          |   |  |         |  
| | Valuation allowance for future tax assets (i)         |  | (24,029  | ) |  | (25,845 | )
| | Future income tax liability                           |  | (22,335  | ) |  | (25,557 | )

| | (i) | Future tax assets have been recognized to the extent
        the future taxable amounts related to taxable temporary differences for
        which a future tax liability is recognized can be offset. We believe it
        is more likely than not that we will realize the benefits of these deductible
        differences, net of the existing valuation allowance at December 31, 2008.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | iii) | At December 31, the company has the following estimated
        operating losses:
| | ---- | ---------------------------------------------------------------------------------

| |           |  | 2008   |  |  | 2007   | 
| | --------- |  | ------ |  |  | ------ | 
| |           |  | **$**  |  |  | **$**  | 
| |           |  |        |  |  |        | 
| | Argentina |  | 13,977 |  |  | 9,118  | 
| | Australia |  | 9,006  |  |  | 8,839  | 
| | Canada    |  | 10,507 |  |  | 9,490  | 
| | Chile     |  | 108    |  |  | 102    | 
| | Mexico    |  | 45,591 |  |  | 30,145 | 
| | Peru      |  | 1,220  |  |  | 372    | 
| | U.S.A.    |  | 7,223  |  |  | 8,188  | 

The operating losses expire between
  2009 and 2028, with the exception of those for Chile and Australia which are
  available indefinitely to reduce future taxable income.

F-36

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|15 | SUPPLEMENTARY CASH FLOW INFORMATION                                                                                                                                                                 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                     
|   | During the years ended December 31, 2008, 2007 and 2006,
        we conducted non-cash financing and investing activities as set out below.
        Non-cash operating activities are not presented.
|   |                                                                                                                                                                                                     
|   | Non-cash working capital activities were:                                                                                                                                                           

| |                                             |  | 2008   |   |  | 2007   |   |  | 2006   |  
| | ------------------------------------------- |  | ------ | - |  | ------ | - |  | ------ | -
| |                                             |  | **$**  |   |  | **$**  |   |  | **$**  |  
| | Accounts receivable                         |  | (373   | ) |  | 813    |   |  | (2,284 | )
| | Prepaid expenses and deposits               |  | (1,692 | ) |  | 165    |   |  | (118   | )
| | Accounts payable and current portion of ARO |  | 279    |   |  | (1,182 | ) |  | 778    |  
| | Accrued liabilities                         |  | 1,066  |   |  | (33    | ) |  | 376    |  
| | Accrued interest on convertible debt        |  | 2,229  |   |  | -      |   |  | -      |  
| | Current portion of taxes payable            |  | 11,338 |   |  | -      |   |  | -      |  
| |                                             |  | 12,847 |   |  | (237   | ) |  | (1,248 | )

| | Non-cash investing activities were:          |  |       |  |  |       |   |  |        |  
| | -------------------------------------------- |  | ----- |  |  | ----- | - |  | ------ | -
| |                                              |  | 2008  |  |  | 2007  |   |  | 2006   |  
| |                                              |  | **$** |  |  | **$** |   |  | **$**  |  
| |                                              |  |       |  |  |       |   |  |        |  
| | Non-cash investing activities                |  |       |  |  |       |   |  |        |  
| | Shares acquired for sale of mineral property |  | -     |  |  | 837   |   |  | 220    |  
| | Shares issued for mineral properties         |  | -     |  |  | (337  | ) |  | (8,442 | )

During the year ended December 31, 2008,
  we paid a total of $3,117,000 (2007 - $nil; 2006 - $nil) in interest expense.
  No income tax was paid in 2008, 2007 or 2006.

F-37

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|16 | SEGMENTED FINANCIAL INFORMATION                                                                                                                                                                                                                                                                                                                                                   
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                   
|   | We have one operating segment, which is the exploration
        and development of mineral properties. Mineral property expenditures by
        property are detailed in note 8. Substantially all of our earnings or
        losses for the years ended December 31, 2008, 2007 and 2006 were incurred
        in Canada. Segmented assets by geographic location are as follows:

December 31, 2008UnitedArgentina
      
      
      Australia
      
      
      Canada
      
      
      Chile
      
      
      Mexico
      
      
      Peru
      
      
      States
      
      
      Total$
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      
      
      $Mineral propertycosts and property,plant and equipment
      
      271,589
      
      
      19,036
      
      
      14,531
      
      
      7,292
      
      
      65,901
      
      
      34,575
      
      
      8,266
      
      
      421,190Total assets
      
      303,280
      
      
      19,130
      
      
      125,370
      
      
      7,294
      
      
      68,376
      
      
      36,148
      
      
      8,308
      
      
      567,905


December 31, 2007UnitedArgentina
      
      
      Australia
      
      
      Canada
      
      
      Chile
      
      
      Mexico
      
      
      Peru
      
      
      States
      
      
      Total$
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      
      
      $Mineral propertycosts and property,plant and equipment
      
      156,112
      
      
      23,375
      
      
      13,022
      
      
      8,743
      
      
      61,392
      
      
      34,150
      
      
      9,438
      
      
      306,232Total assets
      
      172,619
      
      
      23,519
      
      
      183,895
      
      
      8,869
      
      
      64,930
      
      
      34,620
      
      
      16,399
      
      
      504,851


|17 | COMMITMENTS                                                                                             
|-- | --------------------------------------------------------------------------------------------------------
|   |                                                                                                         
|   | As at December 31, 2008, we have committed to payments
        under contractual obligations as follows:

Less than
      
      
      1-3 years
      
      
      4-5 years
      
      
      5+ years
      
      
      Total1 year$
      
      
      $
      
      
      $
      
      
      $
      
      
      $Lease obligations
      
      246
      
      
      495
      
      
      336
      
      
      -
      
      
      1,077Asset retirement obligations
      
      234
      
      
      1,346
      
      
      983
      
      
      2,147
      
      
      4,710Long-term convertible notes*
      
      6,210
      
      
      12,420
      
      
      147,315
      
      
      -
      
      
      165,9456,690
      
      
      14,261
      
      
      148,634
      
      
      2,147
      
      
      171,732


| | * | Convertible notes are due in 2028 but expected to be
        repaid in 2013. The notes bear an interest rate of 4.5% per annum and
        are convertible into common shares at a fixed conversion rate upon specified
        events.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-38

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|18 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND
      UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
      (GAAP)
|-- | -------------------------------------------------------------------------------------------------------------------

Consolidated summarized balance sheets:

| |                                        |  |          |   |  |                 |   |  | 2008     |   |  |          |   |  |                 |   |  | 2007     |  
| | -------------------------------------- |  | -------- | - |  | --------------- | - |  | -------- | - |  | -------- | - |  | --------------- | - |  | -------- | -
| |                                        |  |          |   |  |                 |   |  |          |   |  |          |   |  |                 |   |  |          |  
| |                                        |  | Canadian |   |  | **Adjustments** |   |  | U.S.     |   |  | Canadian |   |  | **Adjustments** |   |  | U.S.     |  
| |                                        |  | GAAP     |   |  |                 |   |  | GAAP     |   |  | GAAP     |   |  |                 |   |  | GAAP     |  
| |                                        |  | **$**    |   |  | **$**           |   |  | **$**    |   |  | **$**    |   |  | **$**           |   |  | **$**    |  
| | Assets                                 |  |          |   |  |                 |   |  |          |   |  |          |   |  |                 |   |  |          |  
| | Current assets                         |  | 86,814   |   |  | -               |   |  | 86,814   |   |  | 134,582  |   |  | -               |   |  | 134,582  |  
| | Other investments                      |  | 21,803   |   |  | -               |   |  | 21,803   |   |  | 45,645   |   |  | -               |   |  | 45,645   |  
| | Convertible debenture                  |  | 5,973    |   |  | -               |   |  | 5,973    |   |  | -        |   |  | -               |   |  | -        |  
| | Value added tax recoverable            |  | 30,332   |   |  | -               |   |  | 30,332   |   |  | 9,642    |   |  | -               |   |  | 9,642    |  
| | Mineral property costs (a)i)           |  | 258,832  |   |  | (222,951        | ) |  | 35,881   |   |  | 254,547  |   |  | (244,306        | ) |  | 10,241   |  
| | Other property, plant and              |  |          |   |  |                 |   |  |          |   |  |          |   |  |                 |   |  |          |  
| | equipment (a)vi)                       |  | 162,358  |   |  | 3,600           |   |  | 165,958  |   |  | 58,604   |   |  | -               |   |  | 58,604   |  
| | Other assets                           |  | 1,793    |   |  | -               |   |  | 1,793    |   |  | 1,831    |   |  | -               |   |  | 1,831    |  
| |                                        |  | 567,905  |   |  | (219,351        | ) |  | 348,554  |   |  | 504,851  |   |  | (244,306        | ) |  | 260,545  |  
| |                                        |  |          |   |  |                 |   |  |          |   |  |          |   |  |                 |   |  |          |  
| | Liabilities                            |  |          |   |  |                 |   |  |          |   |  |          |   |  |                 |   |  |          |  
| | Current liabilities                    |  | 45,328   |   |  | -               |   |  | 45,328   |   |  | 15,902   |   |  | -               |   |  | 15,902   |  
| |                                        |  |          |   |  |                 |   |  |          |   |  |          |   |  |                 |   |  |          |  
| | Long-term convertibles note (a)vi)     |  | 104,046  |   |  | -               |   |  | 104,046  |   |  | -        |   |  | -               |   |  | -        |  
| | Other liabilities (a)i)                |  | 28,934   |   |  | (22,335         | ) |  | 6,599    |   |  | 28,418   |   |  | (25,557         | ) |  | 2,861    |  
| |                                        |  |          |   |  |                 |   |  |          |   |  |          |   |  |                 |   |  |          |  
| |                                        |  | 178,308  |   |  | (22,335         | ) |  | 155,973  |   |  | 44,320   |   |  | (25,557         | ) |  | 18,763   |  
| |                                        |  |          |   |  |                 |   |  |          |   |  |          |   |  |                 |   |  |          |  
| | Shareholders Equity                   |  |          |   |  |                 |   |  |          |   |  |          |   |  |                 |   |  |          |  
| | Share capital (a)iii)                  |  | 389,655  |   |  | (950            | ) |  | 388,705  |   |  | 386,597  |   |  | (950            | ) |  | 385,647  |  
| | Value assigned to:                     |  |          |   |  |                 |   |  |          |   |  |          |   |  |                 |   |  |          |  
| |                                        |  |          |   |  |                 |   |  |          |   |  |          |   |  |                 |   |  |          |  
| | Long-term convertible notes (a)vi)     |  | 37,383   |   |  | -               |   |  | 37,383   |   |  | -        |   |  | -               |   |  | -        |  
| | Stock options (a)v)                    |  | 36,502   |   |  | (4,186          | ) |  | 32,316   |   |  | 27,706   |   |  | (4,186          | ) |  | 23,520   |  
| | Contributed surplus                    |  | 510      |   |  | -               |   |  | 510      |   |  | 510      |   |  | -               |   |  | 510      |  
| | Accumulated other                      |  |          |   |  |                 |   |  |          |   |  |          |   |  |                 |   |  |          |  
| | comprehensive income (a)ii)            |  | (19,569  | ) |  | 5,230           |   |  | (14,339  | ) |  | 94,537   |   |  | (40,325         | ) |  | 54,212   |  
| | Deficit (a)i), (a)ii), (a)iii), (a)vi) |  | (55,380  | ) |  | (197,110        | ) |  | (252,490 | ) |  | (49,434  | ) |  | (173,288        | ) |  | (222,722 | )
| |                                        |  |          |   |  |                 |   |  |          |   |  |          |   |  |                 |   |  |          |  
| |                                        |  | 389,101  |   |  | (197,016        | ) |  | 192,085  |   |  | 459,916  |   |  | (218,749        | ) |  | 241,167  |  
| |                                        |  |          |   |  |                 |   |  |          |   |  |          |   |  |                 |   |  |          |  
| | Non-controlling interest               |  | 496      |   |  | -               |   |  | 496      |   |  | 615      |   |  | -               |   |  | 615      |  
| |                                        |  | 567,905  |   |  | (219,351        | ) |  | 348,554  |   |  | 504,851  |   |  | (244,306        | ) |  | 260,545  |  

F-39

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|18 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED
      STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Contd)
|-- | ----------------------------------------------------------------------------------------------------------------------

Consolidated summarized statements
  of loss:

| |                                                                      |  | 2008     |   |  | 2007    |   |  | 2006    |  
| | -------------------------------------------------------------------- |  | -------- | - |  | ------- | - |  | ------- | -
| |                                                                      |  | **$**    |   |  | **$**   |   |  | **$**   |  
| |                                                                      |  |          |   |  |         |   |  |         |  
| | Earnings (loss) in accordance with Canadian
      GAAP               |  | (5,946   | ) |  | (33,965 | ) |  | 14,115  |  
| | Mineral property costs for the year (a)i)                            |  | (37,763  | ) |  | (35,200 | ) |  | (40,367 | )
| | Gain on sale of mineral property (a)i)                               |  | 6,948    |   |  | -       |   |  | -       |  
| | Financing fees on convertible notes (a)vi)                           |  | 3,600    |   |  | -       |   |  | -       |  
| | Future income tax expense on marketable securities
      (a)ii)      |  | 3,393    |   |  | 1,022   |   |  | -       |  
| | Gain on sale of joint venture (a)i)                                  |  | -        |   |  | -       |   |  | 15,823  |  
| | Mineral costs written-off during the year (a)i)                      |  | -        |   |  | -       |   |  | 89      |  
| |                                                                      |  |          |   |  |         |   |  |         |  
| | Loss in accordance with U.S. GAAP                                    |  | (29,768  | ) |  | (68,143 | ) |  | (10,340 | )
| |                                                                      |  |          |   |  |         |   |  |         |  
| | Other comprehensive income (loss)                                    |  |          |   |  |         |   |  |         |  
| | in accordance with Canadian GAAP                                     |  | (114,106 | ) |  | 67,019  |   |  | 6,308   |  
| | Translation adjustment                                               |  | 48,948   |   |  | (43,666 | ) |  | -       |  
| | Future income tax expense on marketable securities (a)ii)            |  | (3,393   | ) |  | (1,022  | ) |  | -       |  
| | Unrealized gain (loss) on available-for-sale
      securities (a)ii) |  | -        |   |  | -       |   |  | 15,062  |  
| | Reclassification adjustment for realized (gain) loss on              |  |          |   |  |         |   |  |         |  
| | available-for-sale securities                                        |  | -        |   |  | -       |   |  | 2,297   |  
| |                                                                      |  |          |   |  |         |   |  |         |  
| | Other comprehensive income (loss)                                    |  |          |   |  |         |   |  |         |  
| | in accordance with U.S. GAAP                                         |  | (68,551  | ) |  | 22,331  |   |  | 23,667  |  
| |                                                                      |  |          |   |  |         |   |  |         |  
| | Total comprehensive income (loss)                                    |  |          |   |  |         |   |  |         |  
| | in accordance with U.S. GAAP                                         |  | (98,319  | ) |  | (45,812 | ) |  | 13,327  |  
| |                                                                      |  |          |   |  |         |   |  |         |  
| | Basic weighted-average common shares (000s)                         |  | 62,694   |   |  | 62,148  |   |  | 58,652  |  
| | Diluted weighted-average common shares (000s)                       |  | 62,694   |   |  | 62,148  |   |  | 58,904  |  
| |                                                                      |  |          |   |  |         |   |  |         |  
| | Basic and diluted earnings (loss) per share                          |  | (0.47    | ) |  | (1.10   | ) |  | (0.18   | )

F-40

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|18 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED
      STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Contd)
|-- | ----------------------------------------------------------------------------------------------------------------------

Consolidated summarized statements
  of cash flows:

| |                                            |  | 2008     |   |  | 2007     |   |  | 2006    |  
| | ------------------------------------------ |  | -------- | - |  | -------- | - |  | ------- | -
| |                                            |  | **$**    |   |  | **$**    |   |  | **$**   |  
| |                                            |  |          |   |  |          |   |  |         |  
| | Cash flows from operating activities       |  |          |   |  |          |   |  |         |  
| | Pursuant to Canadian GAAP                  |  | (19,093  | ) |  | 23,620   |   |  | (10,050 | )
| | Mineral property costs (a)i)               |  | (37,763  | ) |  | (33,943  | ) |  | (31,697 | )
| | Financing fees on convertible notes (a)vi) |  | 3,600    |   |  | -        |   |  | -       |  
| | Pursuant to U.S. GAAP                      |  | (53,256  | ) |  | (10,323  | ) |  | (41,747 | )
| |                                            |  |          |   |  |          |   |  |         |  
| | Cash flows from financing activities       |  |          |   |  |          |   |  |         |  
| | Pursuant to Canadian GAAP                  |  | 138,719  |   |  | 10,973   |   |  | 182,338 |  
| | Financing fees on convertible notes (a)vi) |  | (3,600   | ) |  | -        |   |  | -       |  
| | Pursuant to U.S. GAAP                      |  | 135,119  |   |  | 10,973   |   |  | 182,338 |  
| |                                            |  |          |   |  |          |   |  |         |  
| | Cash flows from investing activities       |  |          |   |  |          |   |  |         |  
| | Pursuant to Canadian GAAP                  |  | (129,213 | ) |  | (150,038 | ) |  | 5,004   |  
| | Mineral property costs (a)i)               |  | 37,763   |   |  | 33,943   |   |  | 31,697  |  
| | Pursuant to U.S. GAAP                      |  | (91,450  | ) |  | (116,095 | ) |  | 36,701  |  

F-41

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|18 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED
      STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Contd)
|-- | ----------------------------------------------------------------------------------------------------------------------

| | a) | We prepare our consolidated financial statements
        in accordance with accounting principles generally accepted in Canada
        (Canadian GAAP), which differ in certain respects from those
        principles that we would have followed had our consolidated financial
        statements been prepared in accordance with accounting principles generally
        accepted in the United States and requirements promulgated by the Securities
        and Exchange Commission (SEC) (collectively U.S. GAAP).
        The major differences between Canadian and U.S. GAAP and their effect
        on the consolidated financial statements are summarized below:
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

F-42

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|18 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED
      STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Contd)
|-- | ----------------------------------------------------------------------------------------------------------------------

| | ii)  | Under U.S. GAAP, securities that are available-for-sale
        are recorded at fair value and unrealized gains or losses are included
        as part of comprehensive income. An impairment on available-for- sale
        securities is recorded in income if such loss is determined to be other
        than temporary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      | Under Canadian GAAP, prior to January 1, 2007, marketable
        securities were valued at the lower of cost and market with any write-down
        recorded as a charge to earnings. Effective January 1, 2007, upon adoption
        of new CICA Handbook Section 3855, marketable securities have been designated
        as available-for-sale financial assets and are recorded at fair value
        consistent with U.S. GAAP. We recognized an adjustment of $25,573,000
        to the opening balance of accumulated other comprehensive income, representing
        the unrealized gain on available-for-sale marketable securities held by
        us at January 1, 2007 under Canadian GAAP. No similar adjustment would
        be recognized under U.S. GAAP in 2007. Consequently, GAAP differences
        related to available-for-sale securities have been eliminated effective
        January 1, 2007.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      | Under Canadian GAAP, as described in Note 3(e), effective
        September 30, 2008, the Company adopted the provisions of EIC-172 which
        required the tax benefits recognized consequent to the recording of unrealized
        gains in comprehensive income to be recognized in net income. Under U.S.
        GAAP, no similar provisions exist and such tax benefits would be recorded
        in other comprehensive income. For U.S. GAAP purposes, opening deficit
        as at January 1, 2007 would decrease and other comprehensive income would
        decrease by $4,363,000. Other comprehensive loss would increase and income
        tax expense would decrease by $3,393,000 (2007 - $1,022,000) during the
        year.                                                                                                                                                                         
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | iii) | Under Canadian GAAP, before the introduction of Canadian
        Institute of Chartered Accountants (CICA) 1581, Business Combinations,
        the fair value of shares issued by an acquirer to effect a business combination
        was based on the quoted market price of shares at the date of acquisition.
        Under U.S. GAAP, the fair value of shares issued is based on the market
        price surrounding the date the business combination agreement is agreed
        to and announced.                                                                                                                                                                                                                                                                                                                                                                                                                
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | iv)  | Canadian GAAP provides for investments in jointly controlled
        entities to be accounted for using proportionate consolidation. Under
        U.S. GAAP, investments in incorporated joint ventures are to be accounted
        for using the equity method. Under an accommodation of the SEC, the accounting
        for joint ventures need not be reconciled from Canadian to U.S. GAAP.
        The different accounting treatment affects only the presentation and classification
        of financial statement items and not net income or shareholders
        equity.                                                                                                                                                                                                                                                                                                                                        

F-43

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|18 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED
      STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Contd)
|-- | ----------------------------------------------------------------------------------------------------------------------

| | v)  | For U.S. GAAP purposes, we previously accounted for
        employee stock-based compensation arrangements using the intrinsic value
        method prescribed in Accounting Principles Board APB) Opinion
        No. 25, Accounting for Stock Issued to Employeesand
        related interpretations. Accordingly, since stock options are granted
        at exercise prices that are at or above the quoted market value of our
        common shares at the date of grant, there is no compensation cost recognized
        by the company for options granted to employees. We adopted the fair value
        based method of accounting for employee stock-based compensation under
        U.S. GAAP effective January 1, 2005 using the modified prospective transition
        method. Under this method, we recognized employee stock-based compensation
        beginning January 1, 2005 as if the fair value method had been used to
        account for all employee awards granted, modified, or settled in fiscal
        years beginning after December 15, 1994.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | For Canadian GAAP purposes, we adopted, as of January
        1, 2004, the CICAs amendments to Section 3870, Stock-Based
        Compensation and other Stock-Based Payments, which required
        the fair value method to be applied to employee stock-based compensation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | Effective January 1, 2006, we adopted Statement of Financial
        Accounting Standard (SFAS) No. 123R, Share Based
        Payment for all employee stock-based awards granted, modified
        or settled after the effective date using the fair value measurement method.
        Compensation cost is recognized over the period during which an employee
        is required to provide service in exchange for the award  the requisite
        service period. For unvested awards outstanding as of the effective date,
        compensation was recognized based upon the grant-date fair value determined
        under SFAS No. 123 Accounting for Stock-Based Compensation.
        Upon adoption of SFAS 123R using the modified prospective method, there
        was no cumulative effect adjustment required and no differences exist
        between the accounting for employee stock-based compensation expense in
        2006 to December 31, 2008 between Canadian and U.S. GAAP.                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | vi) | The adoption of FASB Staff Position Accounting Principles
        Board 14-1 (FSP APB 14-1) on January 1, 2009 resulted in the
        elimination of the Canadian and U.S. GAAP difference on all convertible
        debt balances with the exception of financing costs, which are expensed
        under Canadian GAAP and capitalized and amortized in accordance with U.S.
        GAAP. In addition, under U.S. GAAP, related financing costs are classified
        as financing activities. Accordingly, financing fees charged to net income
        would decrease by $3,600,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | The results of adopting this standard have been retrospectively
        applied in these consolidated financial statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-44

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|18 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED
      STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Contd)
|-- | ----------------------------------------------------------------------------------------------------------------------

| | b) | Other disclosures                                                                                                                                              
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                
| |    | The following additional information would be presented
        if these consolidated financial statements were presented in accordance
        with U.S. GAAP:
| |    |                                                                                                                                                                
| |    | i)               
        Accounts receivable                                                                                                                  

| |                   |  | 2008  |  |  | 2007  | 
| | ----------------- |  | ----- |  |  | ----- | 
| |                   |  | **$** |  |  | **$** | 
| |                   |  |       |  |  |       | 
| | Value added tax   |  | 241   |  |  | 407   | 
| | Other receivables |  | 2,531 |  |  | 2,531 | 
| |                   |  | 2,772 |  |  | 2,938 | 

| | ii) | Development stage enterprise
| | --- | ----------------------------

We meet the definition of a development
  stage enterprise under SFAS No. 7, Accounting and Reporting by Development Stage
  Enterprises. The following additional disclosures are required under U.S. GAAP:

Consolidated summarized statements of
  loss and deficit and cash flows since October 1, 1993, the date we made a strategic
  decision to concentrate on the acquisition and exploration of bulk silver mineral
  properties in North, Central and South America.

Consolidated loss and deficit:

| |                                                                          |  | Period from       |  
| | ------------------------------------------------------------------------ |  | ----------------- | -
| |                                                                          |  | October 1, 1993   |  
| |                                                                          |  | (inception) to    |  
| |                                                                          |  | December 31, 2008 |  
| |                                                                          |  | **$**             |  
| |                                                                          |  |                   |  
| | Mineral property exploration and reclamation                             |  | 252,351           |  
| | General and administration, salaries, professional fees                  |  | 80,894            |  
| | Other income                                                             |  | (80,000           | )
| | Net loss for the period from October 1, 1993 to December 31,
      2008, |  |                   |  
| | being the deficit accumulated
      during the development stage         |  | 253,244           |  
| | Opening retained earnings, October 1, 1993                               |  | (755              | )
| | Ending deficit, December, 2008                                           |  | 252,490           |  

F-45

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|18 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED
      STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Contd)
|-- | ----------------------------------------------------------------------------------------------------------------------

| | Consolidated cash flows:                            |  |                   |  
| | --------------------------------------------------- |  | ----------------- | -
| |                                                     |  | Period from       |  
| |                                                     |  | October 1, 1993   |  
| |                                                     |  | (inception) to    |  
| |                                                     |  | December 31, 2008 |  
| |                                                     |  | **$**             |  
| | Operating activities                                |  | (182,508          | )
| | Investing activities                                |  | (187,714          | )
| | Financing activities                                |  | 441,360           |  
| |                                                     |  |                   |  
| | Increase in cash and cash and cash equivalents      |  | 71,138            |  
| | Cash and cash equivalents  October 1, 1993         |  | 875               |  
| | Cash and cash equivalents  December
      31, 2008 |  | 72,013            |  

| | iii) | Additional shareholders equity disclosure
      required under FAS No. 7.
| | ---- | --------------------------------------------------------------------------

|                                          |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  | Value       |  |  |             |  |  | Compre-       |   |  |           |   |  |               |  
|----------------------------------------- |  | ----- |  |  | ------------- |  |  | ------ | - |  | ---------- |  |  | ---------- |  |  | ----------- |  |  | ----------- |  |  | ----------- |  |  | ------------- | - |  | --------- | - |  | ------------- | -
|                                          |  |       |  |  | Common Shares |  |  | Sub-   |   |  | Values     |  |  | Values     |  |  | assigned to |  |  |             |  |  | hensive     |  |  | Retained      |   |  | Total     |  
|                                          |  | Issue |  |  | Number of     |  |  |        |   |  | scriptions |  |  | assigned   |  |  | assigned    |  |  | convertible |  |  | Contributed |  |  | income (loss) |   |  | earnings  |   |  | shareholders |  
|                                          |  | Price |  |  | shares        |  |  | Amount |   |  | receivable |  |  | to options |  |  | to warrants |  |  | notes       |  |  | Surplus     |  |  |               |   |  | (deficit) |   |  | equity        |  
|                                          |  | $     |  |  | '000s         |  |  | $      |   |  | $          |  |  | $          |  |  | $           |  |  | $           |  |  | $           |  |  | $             |   |  | $         |   |  | $             |  
|Balance October 1, 1993                   |  |       |  |  | 3,410         |  |  | 1,758  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | 755       |   |  | 2,513         |  
|Issued for cash                           |  | 0.58  |  |  | 2,810         |  |  | 1,631  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 1,631         |  
|Non-cash                                  |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Mineral properties                      |  | 0.56  |  |  | 25            |  |  | 14     |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 14            |  
|- Allotted but not issued                 |  |       |  |  | -             |  |  | -      |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | -             |  
|- Assigned values to options issued       |  |       |  |  | -             |  |  | 241    |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 241           |  
|Gain (loss) for year                      |  |       |  |  | -             |  |  | -      |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | 1,626         |   |  | 120       |   |  | 1,746         |  
|Balance September 30, 1994                |  |       |  |  | 6,245         |  |  | 3,644  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | 1,626         |   |  | 875       |   |  | 6,145         |  
|Issued for cash                           |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Private placement                       |  | 0.78  |  |  | 2,570         |  |  | 2,004  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 2,004         |  
|Non-cash                                  |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Mineral properties                      |  | 3.20  |  |  | 15            |  |  | 48     |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 48            |  
|- Allotted shares issued                  |  | 3.16  |  |  | 75            |  |  | 237    |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 237           |  
|- Assigned values to options issued       |  |       |  |  | -             |  |  | 14     |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 14            |  
|Gain (loss) for year                      |  |       |  |  | -             |  |  | -      |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | (809          | ) |  | (1,903    | ) |  | (2,712        | )
|Balance September 30, 1995                |  |       |  |  | 8,905         |  |  | 5,947  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | 817           |   |  | (1,028    | ) |  | 5,736         |  
|Issued for cash                           |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Private placement                       |  | 3.30  |  |  | 2,550         |  |  | 8,426  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 8,426         |  
|- Special warrants                        |  | 3.10  |  |  | 2,000         |  |  | 6,190  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 6,190         |  
|Non-cash                                  |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Mineral properties                      |  | 4.02  |  |  | 85            |  |  | 343    |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 343           |  
|- Finder's fees                           |  |       |  |  | -             |  |  | (429   | ) |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | (429          | )
|- Assigned values to options
      issued |  |       |  |  | -             |  |  | 13     |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 13            |  
|Gain (loss) for year                      |  |       |  |  | -             |  |  | -      |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | (45           | ) |  | (6,866    | ) |  | (6,911        | )
|Balance December 31, 1996                 |  |       |  |  | 13,540        |  |  | 20,490 |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | 772           |   |  | (7,894    | ) |  | 13,368        |  

F-46

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|18 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED
      STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Contd)
|-- | ----------------------------------------------------------------------------------------------------------------------

|                                    |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  | Value       |  |  |             |  |  | Compre-       |   |  |           |   |  |               |  
|----------------------------------- |  | ----- |  |  | ------------- |  |  | ------ | - |  | ---------- |  |  | ---------- |  |  | ----------- |  |  | ----------- |  |  | ----------- |  |  | ------------- | - |  | --------- | - |  | ------------- | -
|                                    |  |       |  |  | Common Shares |  |  | Sub-   |   |  | Values     |  |  | Values     |  |  | assigned to |  |  |             |  |  | hensive     |  |  | Retained      |   |  | Total     |  
|                                    |  | Issue |  |  | Number of     |  |  |        |   |  | scriptions |  |  | assigned   |  |  | assigned    |  |  | convertible |  |  | Contributed |  |  | income (loss) |   |  | earnings  |   |  | shareholders |  
|                                    |  | Price |  |  | shares        |  |  | Amount |   |  | receivable |  |  | to options |  |  | to warrants |  |  | notes       |  |  | Surplus     |  |  |               |   |  | (deficit) |   |  | equity        |  
|                                    |  | $     |  |  |               |  |  | $      |   |  | $          |  |  | $          |  |  | $           |  |  | $           |  |  | $           |  |  | $             |   |  | $         |   |  | $             |  
|Issued for cash                     |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Private placement                 |  | 3.87  |  |  | 680           |  |  | 2,631  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 2,631         |  
|- Exercise of options               |  | 4.43  |  |  | 25            |  |  | 111    |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 111           |  
|- For special warrants              |  | 3.33  |  |  | 745           |  |  | 2,478  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 2,478         |  
|Non-cash                            |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Mineral properties                |  | 3.83  |  |  | 311           |  |  | 1,192  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 1,192         |  
|- Finder's fees                     |  | 3.87  |  |  | 20            |  |  | 77     |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 77            |  
|- Assigned values to options issued |  |       |  |  | -             |  |  | 627    |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 627           |  
|- Share issue costs                 |  |       |  |  | -             |  |  | (245   | ) |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | (245          | )
|Gain (loss) for year                |  |       |  |  | -             |  |  | -      |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | (416          | ) |  | (14,359   | ) |  | (14,775       | )
|Balance December 31, 1997           |  |       |  |  | 15,321        |  |  | 27,361 |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | 356           |   |  | (22,253   | ) |  | 5,464         |  
|Issued for cash                     |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Private placement                 |  |       |  |  | -             |  |  | -      |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | -             |  
|- Exercise of options               |  | 4.41  |  |  | 10            |  |  | 44     |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 44            |  
|- For special warrants              |  | 4.26  |  |  | 630           |  |  | 2,681  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 2,681         |  
|Non-cash                            |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Mineral properties                |  | 2.97  |  |  | 85            |  |  | 252    |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 252           |  
|- Assigned values to options issued |  |       |  |  | -             |  |  | 120    |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 120           |  
|- Share issue costs                 |  |       |  |  | -             |  |  | (221   | ) |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | (221          | )
|Gain (loss) for year                |  |       |  |  | -             |  |  | -      |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | (351          | ) |  | (4,941    | ) |  | (5,292        | )
|Balance December 31, 1998           |  |       |  |  | 16,046        |  |  | 30,237 |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | 5             |   |  | (27,194   | ) |  | 3,048         |  
|Issued for cash                     |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Private placement                 |  | 1.08  |  |  | 1,388         |  |  | 1,504  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 1,504         |  
|- Exercise of options               |  | 1.35  |  |  | 101           |  |  | 136    |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 136           |  
|- Exercise of warrants              |  | 1.49  |  |  | 568           |  |  | 848    |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 848           |  
|Non-cash                            |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Mineral properties                |  | 1.70  |  |  | 50            |  |  | 85     |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 85            |  
|- On business combination           |  | 1.35  |  |  | 2,285         |  |  | 3,097  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 3,097         |  
|- Share issue costs                 |  |       |  |  | -             |  |  | (90    | ) |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | (90           | )
|Gain (loss) for year                |  |       |  |  | -             |  |  | -      |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | 6             |   |  | (6,710    | ) |  | (6,704        | )
|Balance December 31, 1999           |  |       |  |  | 20,438        |  |  | 35,817 |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | 11            |   |  | (33,904   | ) |  | 1,924         |  
|Issued for cash                     |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Private placement                 |  | 1.16  |  |  | 1,633         |  |  | 1,896  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 1,896         |  
|- Exercise of options               |  | 1.35  |  |  | 807           |  |  | 1,093  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 1,093         |  
|- Exercise of warrants              |  | 1.24  |  |  | 1,274         |  |  | 1,577  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 1,577         |  
|                                    |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Mineral properties                |  | 1.72  |  |  | 28            |  |  | 47     |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 47            |  
|- Finder's fees                     |  | 1.16  |  |  | 87            |  |  | 101    |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 101           |  
|- Fractional shares repurchased     |  |       |  |  | -             |  |  | -      |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | -             |  
|- Share issue costs                 |  |       |  |  | -             |  |  | (104   | ) |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | (104          | )
|Gain (loss) for year                |  |       |  |  | -             |  |  | -      |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | (10           | ) |  | (4,470    | ) |  | (4,480        | )
|Balance December 31, 2000           |  |       |  |  | 24,267        |  |  | 40,427 |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | 1             |   |  | (38,374   | ) |  | 2,054         |  
|Issued for cash                     |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Private placement                 |  | 1.82  |  |  | 1,914         |  |  | 3,478  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 3,478         |  
|- Exercise of options               |  | 1.59  |  |  | 1,941         |  |  | 3,076  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 3,076         |  
|- Exercise of warrants              |  | 1.21  |  |  | 1,733         |  |  | 2,091  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 2,091         |  
|Non-cash                            |  |       |  |  |               |  |  |        |   |  |            |  |  |            |  |  |             |  |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Mineral properties                |  | 2.23  |  |  | 1,000         |  |  | 2,230  |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 2,230         |  
|- Finder's fees                     |  | 1.82  |  |  | 59            |  |  | 108    |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 108           |  
|- Assigned value to warrants issued |  |       |  |  | -             |  |  | -      |   |  | -          |  |  | -          |  |  | 252         |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 252           |  
|- Share issue costs                 |  |       |  |  | -             |  |  | (128   | ) |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | (128          | )
|Gain (loss) for year                |  |       |  |  | -             |  |  | -      |   |  | -          |  |  | -          |  |  | -           |  |  | -           |  |  | -           |  |  | -             |   |  | (11,852   | ) |  | (11,852       | )
|Balance December 31, 2001           |  |       |  |  | 30,914        |  |  | 51,282 |   |  | -          |  |  | -          |  |  | 252         |  |  | -           |  |  | -           |  |  | 1             |   |  | (50,226   | ) |  | 1,309         |  

F-47

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|18 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED
      STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Contd)
|-- | ----------------------------------------------------------------------------------------------------------------------

|                                            |  |       |  |  |               |  |  |         |   |  |            |   |  |            |   |  |             |   |  | Value       |  |  |             |  |  | Compre-       |   |  |           |   |  |               |  
|------------------------------------------- |  | ----- |  |  | ------------- |  |  | ------- | - |  | ---------- | - |  | ---------- | - |  | ----------- | - |  | ----------- |  |  | ----------- |  |  | ------------- | - |  | --------- | - |  | ------------- | -
|                                            |  |       |  |  | Common Shares |  |  | Sub-    |   |  | Values     |   |  | Values     |   |  | assigned to |   |  |             |  |  | hensive     |  |  | Retained      |   |  | Total     |  
|                                            |  | Issue |  |  | Number of     |  |  |         |   |  | scriptions |   |  | assigned   |   |  | assigned    |   |  | convertible |  |  | Contributed |  |  | income (loss) |   |  | earnings  |   |  | shareholders |  
|                                            |  | Price |  |  | shares        |  |  | Amount  |   |  | receivable |   |  | to options |   |  | to warrants |   |  | notes       |  |  | Surplus     |  |  |               |   |  | (deficit) |   |  | equity        |  
|                                            |  | $     |  |  |               |  |  | $       |   |  | $          |   |  | $          |   |  | $           |   |  | $           |  |  | $           |  |  | $             |   |  | $         |   |  | $             |  
|Issued for cash                             |  |       |  |  |               |  |  |         |   |  |            |   |  |            |   |  |             |   |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Private placement                         |  | 3.26  |  |  | 4,750         |  |  | 15,459  |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 15,459        |  
|- Exercise of options                       |  | 2.03  |  |  | 696           |  |  | 1,414   |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 1,414         |  
|- Exercise of warrants                      |  | 2.40  |  |  | 1,584         |  |  | 3,806   |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 3,806         |  
|Non-cash                                    |  |       |  |  |               |  |  |         |   |  |            |   |  |            |   |  |             |   |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Mineral properties                        |  | 4.90  |  |  | 199           |  |  | 973     |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 973           |  
|- Finder's fees                             |  | 3.10  |  |  | 80            |  |  | 250     |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 250           |  
|- On conversion of conv. Debenture          |  | 4.49  |  |  | 361           |  |  | 1,619   |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 1,619         |  
|- For mineral properties payables           |  | 4.25  |  |  | 597           |  |  | 2,538   |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 2,538         |  
|- Assigned values to options issued         |  |       |  |  | -             |  |  | -       |   |  | -          |   |  | 125        |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 125           |  
|- Assigned value of exercised op/wts        |  |       |  |  | -             |  |  | 262     |   |  | -          |   |  | (10        | ) |  | (252        | ) |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | -             |  
|- Donations                                 |  | 3.17  |  |  | 10            |  |  | 32      |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 32            |  
|- Share issue costs                         |  |       |  |  | -             |  |  | (508    | ) |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | (508          | )
|Gain (loss) for year                        |  |       |  |  | -             |  |  | -       |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | 809           |   |  | (14,920   | ) |  | (14,111       | )
|Balance December 31, 2002                   |  |       |  |  | 39,191        |  |  | 77,127  |   |  | -          |   |  | 115        |   |  | -           |   |  | -           |  |  | -           |  |  | 810           |   |  | (65,146   | ) |  | 12,906        |  
|Issued for cash                             |  |       |  |  |               |  |  |         |   |  |            |   |  |            |   |  |             |   |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Private placement                         |  |       |  |  | -             |  |  | -       |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | -             |  
|- Exercise of options                       |  | 3.09  |  |  | 536           |  |  | 1,656   |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 1,656         |  
|- Exercise of warrants                      |  | 3.09  |  |  | 2,780         |  |  | 8,580   |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 8,580         |  
|- Subscriptions receive on warrants         |  |       |  |  | -             |  |  | -       |   |  | 350        |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 350           |  
|Non-cash                                    |  |       |  |  |               |  |  |         |   |  |            |   |  |            |   |  |             |   |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Mineral properties                        |  | 5.38  |  |  | 88            |  |  | 474     |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 474           |  
|- On settlement of interest                 |  | 5.82  |  |  | 10            |  |  | 58      |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 58            |  
|- Assigned values to options issued         |  |       |  |  | -             |  |  | -       |   |  | -          |   |  | 145        |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 145           |  
|- Assigned value of exercised
      options |  |       |  |  | -             |  |  | 128     |   |  | -          |   |  | (128       | ) |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | -             |  
|- Share issue costs                         |  |       |  |  | -             |  |  | (42     | ) |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | (42           | )
|Gain (loss) for year                        |  |       |  |  | -             |  |  | -       |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | 5,591         |   |  | (10,277   | ) |  | (4,686        | )
|Balance December 31, 2003                   |  |       |  |  | 42,605        |  |  | 87,981  |   |  | 350        |   |  | 132        |   |  | -           |   |  | -           |  |  | -           |  |  | 6,401         |   |  | (75,423   | ) |  | 19,441        |  
|Issued for cash                             |  |       |  |  |               |  |  |         |   |  |            |   |  |            |   |  |             |   |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Private placement                         |  | 9.68  |  |  | 2,955         |  |  | 28,609  |   |  | -          |   |  | -          |   |  | 5,254       |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 33,863        |  
|- Exercise of options                       |  | 4.33  |  |  | 526           |  |  | 2,277   |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 2,277         |  
|- Exercise of warrants                      |  | 3.84  |  |  | 2,687         |  |  | 10,311  |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 10,311        |  
|Non-cash                                    |  |       |  |  |               |  |  |         |   |  |            |   |  |            |   |  |             |   |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Mineral properties                        |  | 14.92 |  |  | 2,680         |  |  | 39,991  |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 39,991        |  
|- Finders fees                             |  | 9.69  |  |  | 31            |  |  | 303     |   |  | -          |   |  | -          |   |  | 148         |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 451           |  
|- Assigned values to options issued         |  |       |  |  | -             |  |  | -       |   |  | -          |   |  | 41         |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 41            |  
|- Assigned value of exercised
      options |  |       |  |  | -             |  |  | 118     |   |  | -          |   |  | (66        | ) |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 52            |  
|- shares issued on warrant                  |  | 3.76  |  |  | 93            |  |  | 350     |   |  | (350       | ) |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | -             |  
|subscriptions                               |  |       |  |  |               |  |  |         |   |  |            |   |  |            |   |  |             |   |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Share issue costs                         |  |       |  |  | -             |  |  | (1,166  | ) |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | (1,166        | )
|Gain (loss) for year                        |  |       |  |  | -             |  |  | -       |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | (46,910   | ) |  | (46,910       | )
|Adjustment for stock-based comp.            |  |       |  |  | -             |  |  | -       |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | (4,631        | ) |  |           |   |  | (4,631        | )
|Balance  December 31, 2004                 |  |       |  |  | 51,577        |  |  | 168,774 |   |  | -          |   |  | 107        |   |  | 5,402       |   |  | -           |  |  | -           |  |  | 1,770         |   |  | (122,333  | ) |  | 53,720        |  
|Issued for cash                             |  |       |  |  |               |  |  |         |   |  |            |   |  |            |   |  |             |   |  |             |  |  |             |  |  |               |   |  |           |   |  |               |  
|- Exercise of options                       |  | 5.13  |  |  | 259           |  |  | 1,329   |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 1,329         |  
|- Exercise of warrants                      |  | 15.27 |  |  | 10            |  |  | 153     |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 153           |  
|Non-cash                                    |  |       |  |  |               |  |  |         |   |  |            |   |  |            |   |  |             |   |  |             |  |  |             |  |  |               |   |  |           |   |  | -             |  
|- Mineral properties                        |  | 11.72 |  |  | 3             |  |  | 37      |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 37            |  
|- Assigned values to options issued         |  |       |  |  | -             |  |  | -       |   |  | -          |   |  | 3,462      |   |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 3,462         |  
|- Assigned value of exercised options       |  |       |  |  | -             |  |  | 10      |   |  | -          |   |  | (10        | ) |  | -           |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | -             |  
|- Assigned value of exercised warrants      |  |       |  |  | -             |  |  | 38      |   |  | -          |   |  | -          |   |  | (38         | ) |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | -             |  
|Gain (loss) for year                        |  |       |  |  | -             |  |  | -       |   |  | -          |   |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | 6,444         |   |  | (21,906   | ) |  | (15,462       | )
|Balance  December 31, 2005                 |  |       |  |  | 51,849        |  |  | 170,341 |   |  | -          |   |  | 3,559      |   |  | 5,364       |   |  | -           |  |  | -           |  |  | 8,214         |   |  | (144,239  | ) |  | 43,239        |  

F-48

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|18 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED
      STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Contd)
|-- | ----------------------------------------------------------------------------------------------------------------------

|                                       |  |       |  |  |               |  |  |         |   |  |            |  |  |            |   |  |             |   |  | Value       |  |  |             |  |  | Compre-  |   |  |           |   |  |               |  
|-------------------------------------- |  | ----- |  |  | ------------- |  |  | ------- | - |  | ---------- |  |  | ---------- | - |  | ----------- | - |  | ----------- |  |  | ----------- |  |  | -------- | - |  | --------- | - |  | ------------- | -
|                                       |  |       |  |  | Common Shares |  |  | Sub-    |   |  | Values     |  |  | Values     |   |  | assigned to |   |  |             |  |  | hensive     |  |  | Retained |   |  | Total     |  
|                                       |  | Issue |  |  | Number of     |  |  |         |   |  | scriptions |  |  | assigned   |   |  | assigned    |   |  | convertible |  |  | Contributed |  |  | income   |   |  | earnings  |   |  | shareholders |  
|                                       |  | Price |  |  | shares        |  |  | Amount  |   |  | receivable |  |  | to options |   |  | to warrants |   |  | notes       |  |  | Surplus     |  |  | (loss)   |   |  | (deficit) |   |  | equity        |  
|                                       |  | $     |  |  |               |  |  | $       |   |  | $          |  |  | $          |   |  | $           |   |  | $           |  |  | $           |  |  | $        |   |  | $         |   |  | $             |  
|Issued for cash                        |  |       |  |  |               |  |  |         |   |  |            |  |  |            |   |  |             |   |  |             |  |  |             |  |  |          |   |  |           |   |  |               |  
|- Public offering                      |  | 22.83 |  |  | 7,200         |  |  | 164,384 |   |  | -          |  |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | 164,384       |  
|- Exercise of options                  |  | 8.63  |  |  | 669           |  |  | 5,773   |   |  | -          |  |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | 5,773         |  
|- Exercise of warrants                 |  | 16.31 |  |  | 1,387         |  |  | 22,617  |   |  | -          |  |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | 22,617        |  
|Non-cash                               |  |       |  |  |               |  |  |         |   |  |            |  |  |            |   |  |             |   |  |             |  |  |             |  |  |          |   |  |           |   |  |               |  
|- Mineral properties                   |  | 15.91 |  |  | 530           |  |  | 8,442   |   |  | -          |  |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | 8,442         |  
|- Assigned values to options issued    |  |       |  |  | -             |  |  | -       |   |  | -          |  |  | 12,067     |   |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | 12,067        |  
|- Assigned value of exercised options  |  |       |  |  | -             |  |  | 2,277   |   |  | -          |  |  | (2,277     | ) |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | -             |  
|- Assigned value of exercised warrants |  |       |  |  | -             |  |  | 5,643   |   |  | -          |  |  | -          |   |  | (4,929      | ) |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | 714           |  
|                                       |  |       |  |  |               |  |  |         |   |  |            |  |  |            |   |  |             |   |  |             |  |  |             |  |  |          |   |  |           |   |  |               |  
|- Donations                            |  | 18.71 |  |  | 11            |  |  | 206     |   |  | -          |  |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | 206           |  
|- Share issue costs                    |  |       |  |  | -             |  |  | (10,436 | ) |  | -          |  |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | (10,436       | )
|- Options expired/forfeited            |  |       |  |  | -             |  |  | -       |   |  | -          |  |  | (75        | ) |  | -           |   |  | -           |  |  | 75          |  |  | -        |   |  | -         |   |  | -             |  
|- Warrants expired                     |  |       |  |  | -             |  |  | -       |   |  | -          |  |  | -          |   |  | (435        | ) |  | -           |  |  | 435         |  |  | -        |   |  | -         |   |  | -             |  
|Gain (loss) for year                   |  |       |  |  | -             |  |  | -       |   |  | -          |  |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | 23,667   |   |  | (10,340   | ) |  | 13,327        |  
|Balance  December 31, 2006            |  |       |  |  | 61,646        |  |  | 369,247 |   |  | -          |  |  | 13,274     |   |  | -           |   |  | -           |  |  | 510         |  |  | 31,881   |   |  | (154,579  | ) |  | 260,333       |  
|Issued for cash                        |  |       |  |  |               |  |  |         |   |  |            |  |  |            |   |  |             |   |  |             |  |  |             |  |  |          |   |  |           |   |  |               |  
|- Exercise of options                  |  | 3.71  |  |  | 887           |  |  | 10,973  |   |  | -          |  |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | 10,973        |  
|Non-cash                               |  |       |  |  |               |  |  |         |   |  |            |  |  |            |   |  |             |   |  |             |  |  |             |  |  |          |   |  |           |   |  |               |  
|- Mineral properties                   |  | 6.55  |  |  | 9             |  |  | 337     |   |  | -          |  |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | 337           |  
|- Assigned values to options granted   |  |       |  |  | -             |  |  | -       |   |  | -          |  |  | 14,443     |   |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | 14,443        |  
|- Assigned value of exercised options  |  |       |  |  | -             |  |  | 4,197   |   |  | -          |  |  | (4,197     | ) |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | -             |  
|- Donations                            |  |       |  |  | 27            |  |  | 893     |   |  | -          |  |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | 893           |  
|Other comprehensive loss for year      |  |       |  |  | -             |  |  | -       |   |  | -          |  |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | 22,331   |   |  | -         |   |  | 22,331        |  
|Gain (loss) for year                   |  |       |  |  | -             |  |  | -       |   |  | -          |  |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | (68,143   | ) |  | (68,143       | )
|Balance - December 31, 2007            |  |       |  |  | 62,569        |  |  | 385,647 |   |  | -          |  |  | 23,520     |   |  | -           |   |  | -           |  |  | 510         |  |  | 54,212   |   |  | (222,722  | ) |  | 241,167       |  
|Issued for cash                        |  |       |  |  |               |  |  |         |   |  |            |  |  |            |   |  |             |   |  |             |  |  |             |  |  |          |   |  |           |   |  |               |  
|- Exercise of options                  |  | 11.78 |  |  | 186           |  |  | 2,192   |   |  | -          |  |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | 2,192         |  
|Non-cash                               |  |       |  |  |               |  |  |         |   |  |            |  |  |            |   |  |             |   |  |             |  |  |             |  |  |          |   |  |           |   |  | -             |  
|- Assigned values to options granted   |  |       |  |  | -             |  |  | -       |   |  | -          |  |  | 9,662      |   |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | 9,662         |  
|- Assigned value of exercised options  |  |       |  |  | -             |  |  | 866     |   |  | -          |  |  | (866       | ) |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | -         |   |  | -             |  
|- Assigned value to convertible notes  |  |       |  |  | -             |  |  | -       |   |  | -          |  |  | -          |   |  | -           |   |  | 37,383      |  |  | -           |  |  | -        |   |  | -         |   |  | 37,383        |  
|Other comprehensive loss for year      |  |       |  |  | -             |  |  | -       |   |  | -          |  |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | (68,551  | ) |  | -         |   |  | (68,551       | )
|Gain (loss) for year                   |  |       |  |  | -             |  |  | -       |   |  | -          |  |  | -          |   |  | -           |   |  | -           |  |  | -           |  |  | -        |   |  | (29,768   | ) |  | (29,768       | )
|Balance - December 31, 2008            |  |       |  |  | 62,755        |  |  | 388,705 |   |  | -          |  |  | 32,316     |   |  | -           |   |  | 37,383      |  |  | 510         |  |  | (14,339  | ) |  | (252,490  | ) |  | 192,085       |  

| | iv) | Rental Expense                                                                                                                                                           
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                          
| |     | The total rent expense charged to the statement of earnings
        (loss) for the year ending December 31, 2008 was $402,000 (2007 - $298,000;
        2006 - $235,000).

F-49

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|18 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED
      STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Contd)
|-- | ----------------------------------------------------------------------------------------------------------------------

| | v) | Income Tax Uncertainty                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | The Company adopted the provisions of FASB Interpretation
        No. 48, Accounting for Uncertainty in Income Taxes,
        on January 1, 2007. As a result of the implementation of Interpretation
        48, the company did not recognize any further increases in the liability
        for unrecognized tax benefits other than positions arising in the year
        ended December 31, 2008. A reconciliation of the beginning and ending
        amount of unrecognized tax benefits is as follows:

| |                                                                             |  | $(000 | )
| | --------------------------------------------------------------------------- |  | ----- | -
| | Balance as at January 1, 2008                                               |  | 1,204 |  
| | Decreases based on tax positions related to the current year                |  | (857  | )
| | Decreases relating to settlements with the
      taxing authorities         |  | -     |  
| | Decreases relating
      to lapses of the applicable statute of limitations |  | -     |  
| | Balance as at December 31, 2008                                             |  | 347   |  

If recognized, none of the unrecognized
  tax benefits would affect the effective tax rate due to the existence of valuation
  allowances against the related deferred tax assets.

The Company has not recognized interest
  accrued related to unrecognized tax benefits due to the forecasted loss carry
  forward amounts in relevant jurisdictions.

| | vi) | Recently Adopted Accounting Standards
| | --- | -------------------------------------
| |     |                                      
| |     | i)                                   

F-50

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|18 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED
      STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Contd)
|-- | ----------------------------------------------------------------------------------------------------------------------

SFAS 157 establishes a three-tier fair
  value hierarchy, which prioritizes the inputs used in measuring fair value.
  These tiers include: Level 1, defined as observable inputs such as quoted prices
  in active markets; Level 2, defined as inputs other than quoted prices in active
  markets that are either directly or indirectly observable; and Level 3, defined
  as unobservable inputs in which little or no market data exists, therefore requiring
  an entity to develop its own assumptions. The companys Level 1 assets
  include the valuation of available-forsale investments with no trading
  restrictions using a market approach based upon unadjusted quoted prices for
  identical assets in an active market. The companys Level 2 assets include
  the valuation of convertible debenture receivable based on the discounted cash
  flow approach; derivatives based on the Black-Scholes model; and long-term convertible
  notes based on average market quoted price provided by market makers in the
  over-the-counter market on the balance sheet date. The companys Level
  3 assets include the valuation of other investments as determined using a probability-based
  discounted cash flow approach.

| |                                  |  |             |   |  | Quoted prices    |  |  | Significant   |   |  |               | 
| | -------------------------------- |  | ----------- | - |  | ---------------- |  |  | ------------- | - |  | ------------- | 
| |                                  |  |             |   |  | in active        |  |  | other         |   |  | Significant   | 
| |                                  |  | Fair market |   |  | markets for      |  |  | observable    |   |  | unobservable  | 
| |                                  |  | value       |   |  | identical assets |  |  | inputs        |   |  | inputs        | 
| |                                  |  |             |   |  | Level
      1    |  |  | Level
      2 |   |  | Level
      3 | 
| | Available-for-sale securities    |  | 10,923      |   |  | 10,923           |  |  | -             |   |  | -             | 
| | Convertible debenture receivable |  | 5,923       |   |  | -                |  |  | 5,923         |   |  | -             | 
| | Other Investments                |  | 21,803      |   |  | -                |  |  | -             |   |  | 21,803        | 
| | Derivatives                      |  | 50          |   |  | -                |  |  | 50            |   |  | -             | 
| | Long-term convertible debt       |  | (91,191     | ) |  | -                |  |  | (91,191       | ) |  | -             | 
| |                                  |  |             |   |  |                  |  |  |               |   |  |               | 
| | Total                            |  | (52,492     | ) |  | 10,923           |  |  | (85,218       | ) |  | 21,803        | 

| | ii)  | In February 2007, FASB issued SFAS No. 159, Fair
        Value Option For Financial Assets and Liabilities, which permits
        entities to choose to measure various financial instruments and certain
        other items at fair value. The adoption of SFAS 159 on January 1, 2008
        did not have a material effect on the companys results of operations
        or financial position.                                                                                                                            
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | iii) | In December 2007, FASB issued SFAS 160, Non-controlling
        Interests in Consolidated Financial Statements (SFAS 160),
        which specifies that non-controlling interests are to be treated as a
        separate component of equity, not as a liability or other item outside
        of equity. As a result of non-controlling interests being an element of
        equity, increases and decreases in the parent's ownership interest that
        leave control intact are accounted for as capital transactions.

F-51

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|18 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED
      STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Contd)
|-- | ----------------------------------------------------------------------------------------------------------------------

| |      |                                                | The statement is effective for business combinations entered
      into on or after December 15, 2008, and is to be applied prospectively to
      all non-controlling interests, except for the presentation and disclosure
      requirements which require retrospective application. The adoption of SFAS
      160 non-controlling interests as required at January 1, 2009 did not have
      a material effect on the companys results of operations or financial
      position; however, the company retrospectively applied the disclosure requirements
      in these consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ---- | ---------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      | iv)                                            | In May 2008, FASB issued FSP APB 14-1, which
        revises the accounting treatment for convertible debt instruments that
        may be settled in cash upon conversion. FSP APB 14-1 requires the issuer
        to separately account for the liability and equity components of convertible
        debt instruments. The value assigned to the liability component would
        be the estimated fair value, as of the date of issuance, of similar debt
        without the conversion option, but including any other embedded features.
        The difference between the proceeds of the debt and the value allocated
        to the liability component would be recorded in equity. The standard is
        effective for periods beginning on or after December 15, 2008, and is
        to be applied retrospectively. The adoption of this standard on January
        1, 2009 resulted in the elimination of the Canadian and U. S. GAAP difference
        on all convertible debt balances with the exception of financing costs,
        which are expensed under Canadian GAAP and capitalized and amortized in
        accordance with U. S. GAAP.
| |      |                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      |                                                | The results of adopting this standard have
        been retrospectively applied in these consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      |                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | vii) | Impact of recently issued accounting standards
| |      |                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      | i)                                             | In December 2007, the FASB issued a revised
        standard on accounting for business combinations, SFAS 141R.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |      |                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      |                                                | The statement is effective for periods beginning
        on or after December 15, 2008. We do not expect the adoption of this Interpretation
        to have a significant effect on the companys results of operations
        or financial position, until the company enters into a business combination.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |      |                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      | ii)                                            | In June 2008, FASB Task Force reached a consensus
        on EITF Issue No. 07-5, Determining Whether an Instrument (or embedded
        Feature) is Indexed to an Entitys Own Stock. The standard
        provides that an equity-linked financial instrument (or embedded feature)
        would not be considered indexed to the entitys own stock if the
        strike price is denominated in a currency other than the issuers
        functional currency. The Issue is effective for periods beginning on or
        after December 15, 2008. The effect of adopting this EITF on the companys
        results of operations or financial position is still being determined.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

F-52

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|(a development stage company)                                                                  
|Notes to Consolidated Financial Statements                                                     
|December 31, 2008,
      2007 and 2006                                                         
|(tabular amounts expressed in thousands of United States dollars
      unless otherwise stated)

|19 | SUBSEQUENT EVENTS
|-- | -----------------
|   |                  
|   | (a)              
|   |                  
|   | (b)              

F-53

---

SIGNATURES

The registrant hereby certifies that it meets all of the
requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this Amendment No. 1 to the registrants annual report
on its behalf.

| | Silver Standard
      Resources Inc.
| | ------------------------------------
| | (Company)                           
| |                                     
| | By:                                 
| |                                     

Date: August 10, 2009

25

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