---

UNITED STATESSECURITIES AND EXCHANGE COMMISSION
    Washington, D.C.
    20549

FORM 20-F

(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 endedDecember 31, 2010

OR

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

OR

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

Date of event requiring shell company report

For the transition period from ______________________ to_______________________

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)

Guy Davis, 604-689-3846, gdavis@silverstandard.com604-689-3847,
      1400  999 West Hastings Street, Vancouver, BC V6C 2W2 Canada
  (Name,
  Telephone, E-mail and/or Facsimile number and Address of Company Contact
  Person)

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)

---

Indicate the number of outstanding shares of each of the
  issuers classes of capital or common shares as of the close of the period
  covered by the annual report. 79,665,041

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 ]  Yes [   
  ]  No

Indicate by check mark whether the registrant has submitted
  electronically and posted on its corporate Web site, if any, every Interactive
  Data File required to be submitted and posted pursuant to Rule 405 of Regulation
  405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
  (or for such shorter period that the registrant was required to submit and post
  such files).
  [    ]  Yes  
  [    ]  No

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 basis of accounting the registrant
  has used to prepare the financial statements included in this filing:

|U.S. GAAP | [    ] | International Financial Reporting Standards
      as issued by
      the International Accounting Standards Board | [    ] | Other | [ x ] | 
|--------- | ------ | ----------------------------------------------------------------------------------------------------------------- | ------ | ----- | ----- | 

If Other has been checked in response to the previous
  question, 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

- ii -

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TABLE OF CONTENTS

|NOTE REGARDING FORWARD-LOOKING STATEMENTS | V                                                            
|----------------------------------------- | -------------------------------------------------------------
|                                          |                                                              
|GLOSSARY OF GEOLOGICAL TERMS              | IX                                                           
|                                          |                                                              
|ITEM
      1                              | IDENTITY
      OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS  
|                                          |                                                              
|A.                                        | DIRECTORS
      AND SENIOR MANAGEMENT                        
|B.                                        | ADVISERS                                                     
|C.                                        | AUDITORS                                                     
|                                          |                                                              
|ITEM
      2                              | OFFER
      STATISTICS AND EXPECTED TIMETABLE                
|                                          |                                                              
|ITEM
      3                              | KEY
      INFORMATION                                        
|A.                                        | SELECTED
      FINANCIAL DATA                                
|B.                                        | CAPITALIZATION
      AND INDEBTEDNESS                        
|C.                                        | REASONS
      FOR THE OFFER AND USE OF PROCEEDS              
|D.                                        | RISK
      FACTORS                                           
|                                          |                                                              
|ITEM
      4                              | INFORMATION
      ON THE COMPANY                             
|A.                                        | HISTORY
      AND DEVELOPMENT OF THE COMPANY                 
|B.                                        | BUSINESS
      OVERVIEW                                      
|C.                                        | ORGANIZATIONAL
      STRUCTURE                               
|D.                                        | PROPERTY,
      PLANT AND EQUIPMENT                          
|                                          |                                                              
|ITEM
      4A                             | UNRESOLVED
      STAFF COMMENTS                              
|                                          |                                                              
|ITEM
      5                              | OPERATING
      AND FINANCIAL REVIEW AND PROSPECTS           
|A.                                        | OPERATING
      RESULTS                                      
|B.                                        | LIQUIDITY
      AND CAPITAL RESOURCES                        
|C.                                        | RESEARCH
      AND DEVELOPMENT, PATENTS AND LICENSES, ETC    
|D.                                        | TREND
      INFORMATION                                      
|E.                                        | OFF-BALANCE
      SHEET ARRANGEMENTS                         
|F.                                        | TABULAR
      DISCLOSURE OF CONTRACTUAL OBLIGATIONS          
|G.                                        | SAFE
      HARBOR                                            
|                                          |                                                              
|ITEM
      6                              | DIRECTORS,
      SENIOR MANAGEMENT AND EMPLOYEES             
|A.                                        | DIRECTORS
      AND SENIOR MANAGEMENT                        
|B.                                        | COMPENSATION                                                 
|C.                                        | BOARD
      PRACTICES                                        
|D.                                        | EMPLOYEES                                                    
|E.                                        | SHARE
      OWNERSHIP                                        
|                                          |                                                              
|ITEM
      7                              | MAJOR
      SHAREHOLDERS AND RELATED PARTY TRANSACTIONS      
|A.                                        | MAJOR
      SHAREHOLDERS                                     
|B.                                        | RELATED
      PARTY TRANSACTIONS                             
|C.                                        | INTERESTS
      OF EXPERTS AND COUNSEL                       
|                                          |                                                              
|ITEM
      8                              | FINANCIAL
      INFORMATION                                  
|A.                                        | CONSOLIDATED
      STATEMENTS AND OTHER FINANCIAL INFORMATION
|B.                                        | SIGNIFICANT
      CHANGES                                    
|                                          |                                                              
|ITEM
      9                              | THE
      OFFER AND LISTING                                  
|A.                                        | OFFER
      AND LISTING DETAILS                              
|B.                                        | PLAN
      OF DISTRIBUTION                                   
|C.                                        | MARKETS                                                      
|D.                                        | SELLING
      SHAREHOLDERS                                   
|E.                                        | DILUTION                                                     

- iii -

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|F.            | EXPENSES OF THE ISSUE                                                              | 133
|------------- | ---------------------------------------------------------------------------------- | ---
|              |                                                                                    |    
|ITEM
      10 | ADDITIONAL INFORMATION                                                             | 133
|A.            | SHARE CAPITAL                                                                      | 133
|B.            | MEMORANDUM AND ARTICLES OF ASSOCIATION                                             | 133
|C.            | MATERIAL
      CONTRACTS                                                           | 135
|D.            | EXCHANGE CONTROLS AND INVESTMENT CANADA ACT                                        | 137
|E.            | TAXATION                                                                           | 139
|F.            | DIVIDENDS AND PAYING AGENTS                                                        | 147
|G.            | STATEMENT BY
      EXPERTS                                                         | 148
|H.            | DOCUMENTS ON DISPLAY                                                               | 148
|I.            | SUBSIDIARY
      INFORMATION                                                       | 148
|              |                                                                                    |    
|ITEM 11       | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK                   | 148
|              |                                                                                    |    
|ITEM 12       | DESCRIPTION OF SECURITIES OTHER THAN EQUITY
      SECURITIES                       | 150
|              |                                                                                    |    
|ITEM 13       | DEFAULTS,
      DIVIDEND ARREARAGES AND DELINQUENCIES                              | 150
|              |                                                                                    |    
|ITEM 14       | MATERIAL MODIFICATIONS
      TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 150
|              |                                                                                    |    
|ITEM 15       | CONTROLS
      AND PROCEDURES                                                      | 150
|              |                                                                                    |    
|ITEM 16       | [RESERVED]                                                                         | 151
|              |                                                                                    |    
|A.            | AUDIT
      COMMITTEE FINANCIAL EXPERT                                             | 151
|B.            | CODE OF ETHICS                                                                     | 151
|C.            | PRINCIPAL
      ACCOUNTANT FEES AND SERVICES.                                      | 151
|D.            | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
      COMMITTEES                   | 152
|E.            | PURCHASES OF
      EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS       | 152
|F.            | CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT                                       | 152
|G.            | CORPORATE
      GOVERNANCE.                                                        | 152
|              |                                                                                    |    
|ITEM 17       | FINANCIAL
      STATEMENTS                                                         | 152
|              |                                                                                    |    
|ITEM 18       | FINANCIAL
      STATEMENTS                                                         | 153
|              |                                                                                    |    
|ITEM 19       | EXHIBITS                                                                           | 153
|              |                                                                                    |    
|A.            | FINANCIAL
      STATEMENTS                                                         | 153
|B.            | EXHIBITS                                                                           | 154

- iv -

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NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains forward-looking statements and
  information within the meaning of the United States Private Securities
    Litigation Reform Actof 1995 and forward-looking information under the
  provisions of Canadian securities laws (collectively, forward-looking
  statements) concerning the anticipated production and developments in our
  operations in future periods, our planned exploration, development and mining
  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.

Statements concerning mineral reserve and resource estimates
  may also be deemed to constitute forward-looking statements to the extent that
  they involve estimates of the mineralization that will be encountered if the
  property is developed. Any statements that express or involve discussions with
  respect to predictions, expectations, beliefs, plans, projections, objectives,
  assumptions or future events or performance (often, but not always, using words
  or phrases such as expects, anticipates, plans, projects, estimates,
  assumes, intends, strategy, goals, objectives, potential or
  variations thereof, or stating that certain actions, events or results may,
  could, would, might or will be taken, occur or be achieved, or the
  negative of any of these terms and similar expressions) are not statements of
  historical fact and may be forward-looking statements. Forward-looking
  statements are subject to a variety of known and unknown risks, uncertainties
  and other factors that could cause actual events or results to differ from those
  expressed or implied by the forward-looking statements, including, without
  limitation:

- uncertainty of production and cost estimates for the Pirquitas Mine;
- uncertainty of future production at our mineral exploration properties;
- risks and uncertainties associated with new mining operations, including
      start-up delays and operational issues;
- risks related to our ability to obtain adequate financing for our planned
      development activities and to complete further exploration programs;
- commodity price fluctuations;
- our history of losses and expectation of future losses;
- recent market events and conditions;
- risks related to general economic conditions;
- risks related to our covenants given with respect to our 4.5% convertible
      senior notes due 2028;
- differences in U.S. and Canadian practices for reporting mineral resources
      and reserves;
- risks and uncertainties relating to the interpretation of, and statistical
      inferences drawn from drill results and sampling, and the geology, grade and
      continuity of our mineral deposits;
- unpredictable risks and hazards related to the development and operation of
      a mine or mine property that are beyond our control;
- risks related to governmental regulations, including environmental
      regulations;

- v -

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- risks related to the delay in obtaining or failure to obtain required land
      access agreements and permits, or non-compliance with land access agreements
      and permits we have obtained;
- increased costs and restrictions on operations due to compliance with
      environmental laws and regulations;
- regulations and pending legislation governing issues involving climate
      change, as well as the physical impacts of climate change, could result in
      increased operating costs;
- risks related to reclamation activities on our properties;
- uncertainties related to title to our mineral properties and surface
      rights;
- risks related to political instability and unexpected regulatory change;
- our ability to successfully acquire additional commercially mineable
      mineral rights;
- currency fluctuations;
- increased costs affecting the mining industry, including risks associated
      with inflationary pressures in countries where we explore properties, develop
      projects or operate mines;
- increased competition in the mining industry for properties, qualified
      personnel and management;
- risks related to some of our directors and officers involvement with
      other natural resource companies;
- our ability to attract and retain qualified management to grow our
      business;
- risks related to estimates of future income tax assets and liabilities;
- risks related to claims and legal proceedings;
- our ability to maintain adequate internal control over financial reporting;
- our potential classification as a passive foreign investment company
      under the U.S. Internal Revenue Code; and
- the ability to monetize the full value of our interest in Pretium Resources
      Inc.

This list is not exhaustive of the factors that may affect any
  of our forward-looking statements. Forward-looking statements are statements
  about the future and are inherently uncertain, and our actual achievements or
  other future events or conditions may differ materially from those reflected in
  the forward-looking statements due to a variety of risks, uncertainties and
  other factors, including, without limitation, those referred to in this Annual
  Report under the heading Risk Factors and elsewhere in this Annual Report and
  in the documents incorporated by reference herein. Our forward-looking
  statements are based on the beliefs, expectations and opinions of management on
  the date the statements are made, and we do not assume any obligation to update
  forward-looking statements if circumstances or managements beliefs,
  expectations or opinions should change, other than as required by applicable
  law. For the reasons set forth above, you should not place undue reliance on
  forward-looking statements.

- vi -

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In this Annual Report, we, us, our, Silver Standard and
  the Company refer to Silver Standard Resources Inc., a company incorporated
  under the Business Corporations Act(British Columbia), and its
  subsidiaries.

Cautionary Note to U.S. Investors

All disclosure about our exploration properties in this Annual
  Report conforms to the standards of United States Securities and Exchange
  Commission (the SEC) Industry Guide 7, Description of Property by Issuers
    Engaged or to be Engaged in Significant Mining Operations, other than
  disclosure of Mineral Resources, Measured Mineral Resources, Indicated
  Mineral Resources and Inferred Mineral Resources, which are Canadian
  geological and mining terms as defined in accordance with Canadian National
  Instrument 43-101 under the guidelines set out in the CIM Standards.

In this Annual Report references to Canadian National
  Instrument 43-101 or NI 43-101 are references to National
  Instrument 43-101, Standards of Disclosure for Mineral Projects, of the Canadian
  Securities Administrators and references to CIM Standards are
  references to Canadian Institute of Mining, Metallurgy and Petroleum (the CIM)
  Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council
  on December 11, 2005 as may be amended from time to time by the CIM.

|Cautionary Note to U.S. Investors concerning estimates
      of Measured Mineral Resources and Indicated Mineral Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|This Annual Report uses the terms Measured Mineral
      Resource and Indicated Mineral Resource. We advise U.S. investors that
      while such terms are recognized and required under Canadian regulations,
      the SEC does not recognize them. U.S. investors are cautioned
        not to assume that any part or all of the Mineral Resources in these categories will ever be converted into Mineral Reserves.                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Cautionary Note to U.S. Investors concerning estimates
      of Inferred Mineral Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|This Annual Report uses the term Inferred Mineral
      Resources. We advise U.S. investors that while such term is recognized
      and required under Canadian regulations, the SEC does not recognize it.
      Inferred Mineral Resources have a great amount of uncertainty as to
      their existence, and great uncertainty as to their economic and legal
      feasibility. It cannot be assumed that all or any part of an Inferred
      Mineral Resource will ever be upgraded to a higher category. Under
      Canadian rules, estimates of Inferred Mineral Resources may not generally
      form the basis of feasibility or other economic studies. U.S. investors
        are cautioned not to assume that any part or all of an Inferred
        Mineral Resource exists, or is economically or legally
        mineable.

Non-GAAP Financial Performance Measures

We use certain non-GAAP financial performance measures in this
  Annual Report. For a detailed description of each of the non-GAAP measures used
  in this Annual Report, please refer to the discussion under Item 5.B. Liquidity and Capital Resources –  Non-GAAP
  Financial Performance Measures.

In this Annual Report, we use the following non-GAAP financial
  performance measures: Production cost per ounce, Cash operating cost per
  ounce and Total cost per ounce. Production cost per ounce is used as a
  measure of cash production costs incurred directly at the mine before any
  deductions related to concentrate sales. This measure is used by management to
  measure the performance of plant and mill operations and we believe it is a
  useful measure to investors during our early stages of production. This measure
  is then adjusted for various sales-related, royalty and tax deductions to arrive
  at cash operating cost per ounce. This measure is commonly used within the
  industry and we believe provides investors with valuable information regarding our performance.

- vii -

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Cash
  operating cost is aggregated with depletion, depreciation and amortization to
  arrive at the total cost per ounce, which provides investors with the total cost
  of producing an ounce of silver, which we believe to be a valuable measure for
  determining our future profitability. The inclusion of these measures are meant
  to provide additional information; however, these should not be used as a
  substitute for performance measures in accordance with GAAP as these are not
  necessarily standard and many differ among companies within the industry.

For additional information related to these non-GAAP
  performance measures, please refer to Item 5.B. Liquidity and Capital Resources – Non-GAAP Financial Performance
  Measures.

- viii -

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GLOSSARY OF GEOLOGICAL TERMS 
  DEFINITIONS AND
  ABBREVIATIONS

alteration- usually referring to chemical
  reactions in a rock mass resulting from the passage of hydrothermal fluids.

breccia- rock consisting of more or less angular
  fragments in a matrix of finer-grained material or cementing material.

claim- that portion of public mineral lands,
  which a party has staked or marked out in accordance with federal, provincial or
  state mining laws, to acquire the right to explore for the minerals under the
  surface.

cut-off grade- the minimum grade of
  mineralization that delimits mineralization that has a reasonable prospect of
  economic extraction from mineralization that does not have a reasonable prospect
  of economic extraction.

deposit- a natural occurrence of a useful
  mineral of sufficient extent and degree to warrant exploitation.

dilution- results from the mixing in of unwanted
  gangue or waste rock with the ore during mining.

dyke- a tabular body of igneous rock that cuts
  across the structure of adjacent rocks or cuts massive rocks.

fault- a fracture in a rock where there has been
  displacement of the two sides.

feasibility study- means a detailed study of a
  deposit in which all geological, engineering, operating, economic and other
  relevant factors are engineered in sufficient detail that it could reasonably
  serve as the basis for a final decision by a financial institution to finance
  the development of the deposit for mineral production.

g/t- grams per tonne.

gangue- term used to describe worthless minerals
  or rock waste mixed in with the valuable minerals.

geophysics- the study of the physical properties
  of rocks, minerals, and mineral deposits.

grade- the concentration of each ore metal in a
  rock sample, usually given as weight percent. Where extremely low concentrations
  are involved, the concentration may be given in grams per tonne (g/t) or ounces
  per ton (oz/ton). The grade of an ore deposit is calculated, often using
  sophisticated statistical procedures, as an average of the grades of a very
  large number of samples collected from throughout the deposit.

hectare- a square of 100 meters on each side.

host rock- the rock within which the ore deposit occurs.

igneous- means a rock formed by the cooling of
  molten material.

Indicated Mineral Resource- is that part of a
  Mineral Resource for which quantity, grade or quality, densities, shape and
  physical characteristics, can be estimated with a level of confidence sufficient
  to allow the appropriate application of technical and economic parameters, to
  support mine planning and evaluation of the economic viability of the deposit.
  The estimate is based on detailed and reliable exploration and testing
  information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are
  spaced closely enough for geological and grade continuity to be reasonably
  assumed. This definition is from the Canadian Institute of Mining, Metallurgy
  and Petroleum Standards on Mineral Resources and Mineral Reserves adopted on
  December 11, 2005.

- ix -

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induced polarization method- the method used to
  measure various electrical responses to the passage of alternating currents of
  different frequencies through near-surface rocks or to the passage of pulses of
  electricity.

Inferred Mineral Resource- is that part of a
  Mineral Resource for which quantity and grade or quality can be estimated on the
  basis of geological evidence and limited sampling and reasonably assumed, but
  not verified, geological and grade continuity. The estimate is based on limited
  information and sampling gathered through appropriate techniques from locations
  such as outcrops, trenches, pits, workings and drill holes. This definition is
  from the Canadian Institute of Mining, Metallurgy and Petroleum Standards on
  Mineral Resources and Mineral Reserves adopted on December 11, 2005.

intrusion- general term for a body of igneous
  rock formed below the surface.

limestone- sedimentary rock that is composed
  mostly of carbonates, the two most common of which are calcium and magnesium
  carbonates.

Measured Mineral Resource- is that part of a
  Mineral Resource for which quantity, grade or quality, densities, shape, and
  physical characteristics are so well established that they can be estimated with
  confidence sufficient to allow the appropriate application of technical and
  economic parameters, to support production planning and evaluation of the
  economic viability of the deposit. The estimate is based on detailed and
  reliable exploration, sampling and testing information gathered through
  appropriate techniques from locations such as outcrops, trenches, pits, workings
  and drill holes that are spaced closely enough to confirm both geological and
  grade continuity. This definition is from the Canadian Institute of Mining,
  Metallurgy and Petroleum Standards on Mineral Resources and Mineral Reserves
  adopted on December 11, 2005.

Mineral Reserve-is the economically
  mineable part of a Measured or Indicated Mineral Resource demonstrated by at
  least a Preliminary Feasibility Study. This Study must include adequate
  information on mining, processing, metallurgical, economic and other relevant
  factors that demonstrate, at the time of reporting, that economic extraction can
  be justified. A Mineral Reserve includes diluting materials and allowances for
  losses that may occur when the material is mined. This definition is from the
  Canadian Institute of Mining, Metallurgy and Petroleum Standards on Mineral
  Resources and Mineral Reserves adopted on December 11, 2005.

Mineral Resource- is a concentration or
  occurrence of diamonds, natural solid inorganic material, or natural solid
  fossilized organic material including base and precious metals, coal, and
  industrial minerals in or on the Earths crust in such form and quantity and of
  such a grade or quality that it has reasonable prospects for economic
  extraction. The location, quantity, grade, geological characteristics and
  continuity of a Mineral Resource are known, estimated or interpreted from
  specific geological evidence and knowledge.This definition is from the
  Canadian Institute of Mining, Metallurgy and Petroleum Standards on Mineral
  Resources and Mineral Reserves adopted on December 11, 2005.

mineralization- usually implies minerals of
  value occurring in rocks.

net profits interest royalty- a royalty based on
  the profit, allowing for costs directly related to production. The expenses that
  the operator deducts from revenue are defined in the royalty agreement. Payments
  generally begin after payback of capital costs. The royalty holder is not
  responsible for contributing to capital expenses, covering operating losses or
  environmental liabilities.

- x -

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net smelter return- means the amount actually
  paid to the mine or mill owner from the sale of ore, minerals and other
  materials or concentrates mined and removed from mineral properties.

net smelter return royalty- a royalty paid from
  cash flow that is free of any operating or capital costs and environmental
  liabilities.

outcrop- means an exposure of rock at the
  earths surface.

porphyry- a rock with conspicuous large grains
  in a fine grained ground mass.

oz/ton- ounces per ton.

plunge- the vertical angle between a horizontal
  plane and the line of maximum elongation of a body.

Preliminary Feasibility Study- is a
  comprehensive study of the viability of a mineral project that has advanced to a
  stage where the mining method, in the case of underground mining, or the pit
  configuration, in the case of an open pit, has been established and an effective
  method of mineral processing has been determined, and includes a financial
  analysis based on reasonable assumptions of technical, engineering, legal,
  operating, economic, social, and environmental factors and the evaluation of
  other relevant factors which are sufficient for a Qualified Person, acting
  reasonably, to determine if all or part of the Mineral Resource may be
  classified as a Mineral Reserve. This definition is from the Canadian Institute
  of Mining, Metallurgy and Petroleum Standards on Mineral Resources and Mineral
  Reserves adopted on December 11, 2005.

Probable Mineral Reserve- is the economically
  mineable part of an Indicated and, in some circumstances, a Measured Mineral
  Resource demonstrated by at least a Preliminary Feasibility Study. This study
  must include adequate information on mining, processing, metallurgical,
  economic, and other relevant factors that demonstrate, at the time of reporting,
  that economic extraction can be justified. This definition is from the Canadian
  Institute of Mining, Metallurgy and Petroleum Standards on Mineral Resources and
  Mineral Reserves adopted on December 11, 2005.

Proven Mineral Reserve- is the economically
  mineable part of a Measured Mineral Resource demonstrated by at least a
  Preliminary Feasibility Study. This study must include adequate information on
  mining, processing, metallurgical, economic, and other relevant factors that
  demonstrate, at the time of reporting, that economic extraction is justified.
  This definition is from the Canadian Institute of Mining, Metallurgy and
  Petroleum Standards on Mineral Resources and Mineral Reserves adopted on
  December 11, 2005.

Qualified Person- means an individual who is an
  engineer or geoscientist with at least five years of experience in mineral
  exploration, mine development or operation or mineral project assessment, or any
  combination of these; has experience relevant to the subject matter of the
  mineral project and the technical report; and is a member or licensee in good
  standing of a professional association.

reclamation bond- a financial instrument or cash
  usually required when mechanized work is contemplated on a mineral claim. The
  bond may be used to reclaim any workings or put right any damage, if the
  reclamation of the mineral claim does not satisfy the requirements of the
  regulations.

sedimentary- a rock formed from cemented or
  compacted sediments.

sediments- are composed of the debris resulting
  from the weathering and breakup of other rocks that have been deposited by or
  carried to the oceans by rivers, or left over from glacial erosion or sometimes
  from wind action.

- xi -

---

sericite- a fine-grained variety of mica
  occurring in small scales, especially in schists.

shear zone- where a fault affects a width of
  rock rather than being a single clean break, the width of affected rock is
  referred to as the shear zone. The term implies movement, i.e. shearing.

sill- tabular intrusion which is sandwiched
  between layers in the host rock.

stockwork- a mineral deposit consisting of a
  three-dimensional network of closely spaced planar or irregular veinlets.

sulphide- a mineral compound characterized by
  the linkage of sulphur with a metal.

tailings- material rejected from a mill after
  recoverable valuable minerals have been extracted.

tailings pond- a pond in which tailings are
  disposed.

tuff- a finer grained pyroclastic rock made up
  mostly of ash and other fine grained volcanic material.

veins- the mineral deposits that are found
  filling openings in rocks created by faults or replacing rocks on either side of
  faults.

waste- rock which is not ore. Usually referred
  to that rock which has to be removed during the normal course of mining in order
  to get at the ore.

- xii -

---

|Item 1 | Identity of Directors, Senior Management
      and Advisers
|------ | -----------------------------------------------------------

| | A. | Directors and Senior Management
| | -- | -------------------------------

This Form 20-F is being filed as an annual report under the
  Securities Exchange Act of 1934, as amended (the Exchange Act), and, as such,
  there is no requirement to provide any information under this item.

| | B. | Advisers
| | -- | --------

This Form 20-F is being filed as an annual report under the
  Exchange Act, and, as such, there is no requirement to provide any information
  under this item.

| | C. | Auditors
| | -- | --------

This Form 20-F is being filed as an annual report under the
  Exchange Act, and, as such, there is no requirement to provide any information
  under this item.

|Item 2 | Offer Statistics and Expected
      Timetable
|------ | ---------------------------------------------

This Form 20-F is being filed as an annual report under the
  Exchange Act, and, as such, there is no requirement to provide any information
  under this item.

|Item 3 | Key Information
|------ | ---------------

| | A. | Selected Financial Data
| | -- | -----------------------

The following table summarizes certain of our selected
  financial data. This information should be read in conjunction with the more
  detailed financial statements included in this Annual Report.

|Table No.
      1                                                                          | 
|------------------------------------------------------------------------------------------ | 
|Selected Financial
      Data                                                              | 
|(expressed in thousands of U.S. dollars, except per share
      and number of shares data) | 
|                                                                                           | 
|                                                                                           | 
|1.                                                                                         | 
|                                                                                           | 
|2.                                                                                         | 
|                                                                                           | 
|3.                                                                                         | 
|                                                                                           | 
|4.                                                                                         | 
|                                                                                           | 
|5.                                                                                         | 
|                                                                                           | 
|6.                                                                                         | 
|                                                                                           | 
|7.                                                                                         | 

-1-

---

|   |  |                                       |  |  | Year
      ended |  |  | Year
      ended |  |  | Year
      ended |  |  | Year
      ended |  |  | Year
      ended | 
|-- |  | ------------------------------------- |  |  | ---------------- |  |  | ---------------- |  |  | ---------------- |  |  | ---------------- |  |  | ---------------- | 
|   |  |                                       |  |  | Dec 31, 2010     |  |  | Dec 31, 2009     |  |  | Dec 31, 2008     |  |  | Dec 31, 2007     |  |  | Dec 31, 2006     | 
|8. |  | Cash dividends per common
      share |  |  | Nil              |  |  | Nil              |  |  | Nil              |  |  | Nil              |  |  | Nil              | 
|   |  |                                       |  |  |                  |  |  |                  |  |  |                  |  |  |                  |  |  |                  | 
|9. |  | Number of shares                      |  |  | 79,665,041       |  |  | 71,964,708       |  |  | 62,755,547       |  |  | 62,569,447       |  |  | 61,646,120       | 

|(1) | All of our operations are continuing.       
|--- | --------------------------------------------
|(2) | No preferred shares have been issued.       
|(3) | Excludes asset retirement
      obligations.

The selected financial data is presented in Table No. 1 above
  and in the financial statements in accordance with generally accepted accounting
  principles (GAAP) prevailing in Canada as of the dates shown.

The selected financial data under U.S. GAAP for the above
  periods is indicated below in Table No. 2:

|Table No.
      2                                                                          | 
|------------------------------------------------------------------------------------------ | 
|Selected Financial
      Data                                                              | 
|(expressed in thousands of U.S. dollars, except per share
      and number of shares data) | 
|                                                                                           | 
|                                                                                           | 
|1.                                                                                         | 
|                                                                                           | 
|2.                                                                                         | 
|                                                                                           | 
|3.                                                                                         | 
|                                                                                           | 
|4.                                                                                         | 
|                                                                                           | 
|5.                                                                                         | 
|                                                                                           | 
|6.                                                                                         | 
|                                                                                           | 
|7.                                                                                         | 
|                                                                                           | 
|8.                                                                                         | 
|                                                                                           | 
|9.                                                                                         | 

|(1) | All of our operations are continuing.       
|--- | --------------------------------------------
|(2) | No preferred shares have been issued.       
|(3) | Excludes asset retirement
      obligations.

Reference is made to note 21 to the consolidated financial
  statements for a description of material differences between Canadian and U.S.
  GAAP.

U.S./Canadian Dollar Exchange Rates

In this Annual Report, unless otherwise specified, all dollar
  amounts are expressed in United States Dollars ($). In this Annual Report, all
  references to $ refer to U.S. Dollars, all references to C$ refer to
  Canadian Dollars and all references to A$ refer to Australian Dollars.

- 2 -

---

Table No. 3 below sets out the rate of exchange for the
  Canadian dollar at December 31, 2010, December 31, 2009, December 31, 2008,
  December 31, 2007 and December 31, 2006, the average rates for each period, and
  the range of high and low rates for each period. Table No. 4 sets out the high
  and low rates of exchange for the Canadian dollar for each month during the
  previous six months.

For purposes of these tables, the rate of exchange means the
  Bank of Canadas nominal noon exchange rate. The tables set out the number of
  Canadian dollars required under that formula to buy one U.S. dollar. The average
  rate in Table No. 3 means the average of the exchange rates on the last day of
  each month during the period.

|Table No. 3                                                                            
|---------------------------------------------------------------------------------------
|U.S. Dollar/Canadian Dollar Exchange Rates for Five Most Recent
        Financial Years
|                                                                                       
|Fiscal Year Ended December 31, 2010                                                    
|Fiscal Year Ended December 31, 2009                                                    
|Fiscal Year Ended December 31, 2008                                                    
|Fiscal Year Ended December 31, 2007                                                    
|Fiscal Year Ended December 31, 2006                                                    

|Table No. 4                                                             
|------------------------------------------------------------------------
|U.S. Dollar/Canadian Dollar Exchange Rates for Previous
      Six Months
|                                                                        
|High                                                                    
|Low                                                                     

On March 28, 2011, the exchange rate of Canadian dollars into
  United States dollars, based on the nominal noon rate for U.S. dollars reported
  by the Bank of Canada, was $1.00 equals C$0.98.

| | B. | Capitalization and Indebtedness
| | -- | -------------------------------

This Form 20-F is being filed as an annual report under the
  Exchange Act, and, as such, there is no requirement to provide any information
  under this item.

| | C. | Reasons for the Offer and Use of
      Proceeds
| | -- | -----------------------------------------------

This Form 20-F is being filed as an annual report under the
  Exchange Act, and, as such, there is no requirement to provide any information
  under this item.

| | D. | Risk Factors
| | -- | ------------

The production and cost estimates for the Pirquitas Mine
  may vary and/or not be achieved.

We have prepared estimates of future production, operating
  costs and capital costs for the Pirquitas Mine. We cannot give any assurance
  that such production or cost estimates will be achieved. Actual production and
  costs may vary from the estimates depending on a variety of factors, many of
  which are not within our control. These factors include, but are not limited to, actual
  ore mined varying from estimates of grade, tonnage, dilution, and metallurgical
  and other characteristics; short-term operating factors such as the need for
  sequential development of ore bodies and the processing of new or different ore
  grades from those planned; mine failures, slope failures or equipment failures;
  industrial accidents; natural phenomena such as inclement weather conditions,
  floods, droughts, rock slides and earthquakes; encountering unusual or
  unexpected geological conditions; changes in power costs and potential power
  shortages; exchange rate and commodity price fluctuations; shortages of
  principal supplies needed for operations, including explosives, fuels, chemical
  reagents, water, equipment parts and lubricants; labor shortages or strikes;
  high rates of inflation; civil disobedience and protests; and restrictions or
  regulations imposed by governmental or regulatory authorities or other changes
  in the regulatory environments. Failure to achieve production or cost estimates
  or material increases in costs could have a material adverse impact on our
  future cash flows, profitability, results of operations and financial
  condition.

- 3 -

---

The Pirquitas Mine is currently our only mineral property
  in production.

The Pirquitas Mine is currently our only mineral property in
  production. The future development of any other properties found to be
  economically feasible and approved by our Board of Directors will require the
  construction and operation of mines, processing plants and related
  infrastructure. As a result, we are and will continue to be subject to all of
  the risks associated with establishing new mining operations including:

- the availability and cost of skilled labor and mining equipment;
- the availability and cost of appropriate smelting and refining
      arrangements;
- the need to obtain and retain necessary environmental and other
      governmental approvals and permits and the timing of the receipt of those
      approvals and permits;
- potential opposition from non-governmental organizations, environmental
      groups or local groups which may delay or prevent development activities;
- potential increases in cost structures due to changes in the cost of fuel,
      power, materials and supplies; and
- the timing and cost, which can be considerable, of the construction and
      expansion of mining and processing facilities.

The costs, timing and complexities of operating the Pirquitas
  Mine and constructing and developing our other projects may be greater than we
  anticipate because the majority of our property interests are not located in
  developed areas, and, as a result, our property interests may not be served by
  appropriate road access, water and power supply and other support
  infrastructure. Cost estimates may increase as more detailed engineering work is
  completed on a project. It is common in new mining operations to experience
  unexpected costs, problems and delays during construction, development and mine
  start-up. In addition, delays in the early stages of mineral production often
  occur. Accordingly, we cannot provide assurance that our activities will result
  in profitable mining operations at the Pirquitas Mine or any of our other
  mineral properties.

We have limited revenue from operations.

We are a company transitioning from exploration and development
  to production and have only in 2010 started generating significant revenue from
  operations. Other than the Pirquitas Mine, which achieved commercial production
  on December 1, 2009, all of our properties are in the exploration stage. With
  the exception of our Pitarrilla and San Luis Projects we have not defined or
  delineated any proven or probable reserves on any of our exploration stage
  properties. Mineral exploration involves significant risk because few properties that are explored contain bodies of ore that
  would be commercially economic to develop into producing mines. If our current
  exploration programs do not result in the discovery of commercial ore, we may
  need to write-off part or all of our investment in our existing exploration
  stage properties, and we may need to acquire additional properties.

- 4 -

---

The determination of whether any mineral deposits on our
  properties are economically viable is affected by numerous factors beyond our
  control, including:

- the metallurgy of the mineralization forming the mineral deposit;
- market fluctuations for metal prices;
- the proximity and capacity of natural resource markets and processing
      equipment; and
- government regulations governing prices, taxes, royalties, land tenure,
      land use, importing and exporting of minerals and environmental protection.

We may not have sufficient funds to develop our mineral
  properties or to complete further exploration programs.

We have recently secured a significant cash balance following
  the sale of the Snowfield and Brucejack properties, however we currently still
  generate limited operating cash flows, and must primarily finance our
  exploration activity and the development of our mineral properties by other
  means. In the future, our ability to continue our production, exploration and
  development activities, if any, will depend on our ability to generate
  sufficient operating revenue from the Pirquitas Mine and obtain additional
  external financing. Any unexpected costs, problems or delays during the early
  stages of production at the Pirquitas Mine could severely impact our ability to
  generate cash flows from production at the Pirquitas Mine and continue our
  exploration and development activities.

The sources of external financing that we may use for these
  purposes include project or bank financing, or public or private offerings of
  equity and debt. In addition, we may enter into one or more strategic alliances
  or joint ventures, decide to sell certain property interests, or utilize one or
  a combination of all of these alternatives. The financing alternative chosen by
  us may not be available to us on acceptable terms, or at all. If additional
  financing is not available, we may have to postpone the development of, or sell,
  one or more of our principal properties.

Changes in the market price of silver and other metals,
  which in the past have fluctuated widely, will affect our
  operations.

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.

- 5 -

---

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 Mine 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 not remain at current levels. 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.

We have a history of losses and may continue to incur
  losses for the foreseeable future.

Due to our history as an exploration focussed company, we have
  a history of losses. Despite recording significant earnings in 2010 following
  the gain on sale of our Snowfield and Brucejack properties, we still incurred
  underlying losses, and incurred a loss of $13.2 million for the year ended
  December 31, 2009, and $5.9 million for the year ended December 31, 2008.

We expect the Pirquitas Mine to start generating sufficient
  revenues to fund continuing operations, however we may still continue to incur
  losses, and the exploration and development of our other mineral properties will
  still require the commitment of substantial financial resources that may not be
  available.

The amount and timing of expenditures will depend on a number
  of factors, including the progress of ongoing exploration and development, the
  results of consultants analyses and recommendations, the rate at which
  operating losses are incurred, the execution of any joint venture agreements
  with strategic partners and our acquisition of additional property interests,
  some of which are beyond our control. We cannot provide assurance that we will
  ever achieve profitability.

Market events and conditions may adversely affect our
  business and industry.

In 2007 and into 2008, the U.S. credit markets began to
  experience serious disruption due to a deterioration in residential property
  values, defaults and delinquencies in the residential mortgage market
  (particularly, sub-prime and non-prime mortgages) and a decline in the credit
  quality of mortgage-backed securities. These problems led to a slow-down in
  residential housing market transactions, declining housing prices, delinquencies
  in non-mortgage consumer credit and a general decline in consumer confidence.
  These conditions continued and worsened in 2008 and early 2009, causing a loss
  of confidence in the U.S. and global credit and financial markets and resulting
  in the collapse of, and government intervention in, major banks and other
  financial institutions and insurers, and creating a climate of greater
  volatility, less liquidity, widening of credit spreads, a lack of price
  transparency, increased credit losses and tighter credit conditions.
  Notwithstanding various actions by the U.S. and other governments, concerns
  about the general condition of the capital markets, financial instruments,
  banks, investment banks, insurers and other financial institutions caused the
  broader credit markets to further deteriorate and stock markets to decline
  substantially. In addition, general economic indicators, including employment
  levels, announced corporate earnings, economic growth and consumer confidence,
  have deteriorated. Any or all of these market events and conditions may
  adversely affect our business and industry.

- 6 -

---

General economic conditions may adversely affect our
  growth and profitability.

The unprecedented events in global financial markets in the
  past several years have had a profound impact on the global economy. Many
  industries, including the silver and gold mining industry, are impacted by these
  market conditions. Some of the key impacts of the current financial market
  turmoil include contraction in credit markets resulting in a widening of credit
  risk, devaluations, high volatility in global equity, commodity, foreign
  exchange and precious metal markets and a lack of market liquidity. A continued
  or worsened slowdown in the financial markets or other economic conditions,
  including but not limited to, consumer spending, employment rates, business
  conditions, inflation, fuel and energy costs, consumer debt levels, lack of available credit, the state of
  the financial markets, interest rates and tax rates, may adversely affect our
  growth and profitability. Specifically:

- the global credit/liquidity crisis could impact the cost and availability
      of financing and our overall liquidity;
- the volatility of silver and gold prices would impact our revenues,
      profits, losses and cash flow;
- continued recessionary pressures could adversely impact demand for our
      production;
- volatile energy, commodity and consumables prices and currency exchange
      rates would impact our production costs; and
- the devaluation and volatility of global stock markets would impact the
      valuation of our equity and other securities.

These factors could have a material adverse effect on our
  financial condition and results of operations.

An event of default under our 4.5% Convertible Senior
  Notes due 2028 may significantly reduce our liquidity and adversely affect our
  business.

Under the indenture governing our 4.5% Convertible Senior Notes
  due 2028 (the Convertible Notes), we made various covenants to the
  trustees on behalf of the holders of the Convertible Notes, including to make
  payments of interest and principal when due and, upon undergoing a fundamental
  change, to offer to purchase all of the outstanding Convertible Notes.

If there is an event of default under the Convertible Notes,
  the principal amount of such notes, plus accrued and unpaid interest, if any,
  may be declared immediately due and payable. If such an event occurs, we could
  lose our properties, including the Pirquitas Mine, and our shareholders could
  lose their entire investment.

Recoverability of the investment in Pretium

Following the sale of the Snowfield and Brucejack properties to
  Pretium Resources Inc. (Pretium) we have a significant continuing ownership
  interest of approximately 40%. We will significantly rely on the performance of
  that company, the market performance of Pretiums common shares and the
  liquidity of the market for those shares, in realizing the full value of the
  previous transaction. This may reduce our ability to execute our strategy and
  fund planned exploration and development opportunities.

We follow Canadian disclosure practices concerning our
  mineral reserves and resources which allow for more disclosure than is permitted
  for U.S. reporting companies.

Our resource estimates are not directly comparable to those
  made in filings subject to the SEC reporting and disclosure requirements, as we
  report resources in accordance with Canadian practices. These practices are
  different from the practices used to report resource estimates in reports and
  other materials filed with the SEC in that the Canadian practice is to report
  measured, indicated and inferred resources. In the United States, mineralization
  may not be classified as a reserve unless the determination has been made that
  the mineralization could be economically and legally produced or extracted at
  the time the reserve determination is made. U.S. investors are cautioned not to
  assume that all or any part of measured or indicated resources will ever be
  converted into reserves. Further, inferred resources have a great amount of
  uncertainty as to their existence and as to whether they can be mined legally or
  economically. Disclosure of contained ounces is permitted disclosure under
  Canadian regulations; however, the SEC only permits issuers to report
  resources as in place tonnage and grade without reference to unit measures.

- 7 -

---

Accordingly, information concerning descriptions of
  mineralization and resources contained in this Prospectus or any applicable
  Prospectus Supplement, or in any document incorporated by reference herein, may
  not be comparable to information made public by U.S. companies subject to the
  reporting and disclosure requirements of the SEC.

Our reserve and resource estimates are based on
  interpretation and assumptions and may yield less mineral production under
  actual conditions than is currently estimated.

In making determinations about whether to advance any of our
  projects to development, we must rely upon estimated calculations as to the
  mineral reserves and grades of mineralization on our properties. Until ore is
  actually mined and processed, mineral reserves and grades of mineralization must
  be considered as estimates only. These estimates are imprecise and depend upon
  geological interpretation and statistical inferences drawn from drilling and
  sampling which may prove to be unreliable. We cannot provide assurance that:

- reserve, resource or other mineralization estimates will be accurate; or
- mineralization can be mined or processed profitably.

Any material changes in mineral reserve estimates and grades of
  mineralization will affect the economic viability of placing a property into
  production and a propertys return on capital. Our reserve and resource
  estimates have been determined and valued based on assumed future prices,
  cut-off grades and operating costs that may prove to be inaccurate. Extended
  declines in market prices for silver, gold, tin, zinc, lead and copper may
  render portions of our mineralization uneconomic and result in reduced reported
  mineral reserves.

Any material reductions in estimates of mineralization, or of
  our ability to extract this mineralization, could have a material adverse effect
  on our results of operations or financial condition. We cannot provide assurance
  that mineral recovery rates achieved in small scale tests will be duplicated in
  large scale tests under on-site conditions or in production scale.

Mining is inherently risky and subject to conditions or
  events beyond our control.

The development and operation of a mine or mine property is
  inherently dangerous and involves many risks that even a combination of
  experience, knowledge and careful evaluation may not be able to overcome,
  including:

- unusual or unexpected geological formations;
- metallurgical and other processing problems;
- metal losses;
- environmental hazards;
- power outages;
- labor disruptions;
- industrial accidents;
- periodic interruptions due to inclement or hazardous weather conditions;
- flooding, explosions, fire, rockbursts, cave-ins and landslides;
- mechanical equipment and facility performance problems; and
- the availability of materials and equipment.

- 8 -

---

These risks could result in damage to, or destruction of,
  mineral properties, production facilities or other properties, personal injury
  or death, including to our employees, environmental damage, delays in mining,
  increased production costs, asset write downs, monetary losses and possible
  legal liability. We may not be able to obtain insurance to cover these risks at
  economically feasible premiums, or at all. Insurance against certain
  environmental risks, including potential liability for pollution and other
  hazards as a result of the disposal of waste products occurring from production,
  is not generally available to companies within the mining industry. We may
  suffer a material adverse effect on our business if we incur losses related to
  any significant events that are not covered by our insurance policies.

We are subject to significant governmental
  regulations.

The operation of the Pirquitas Mine, as well as our exploration
  activities, are subject to extensive federal, state, provincial, territorial and
  local laws and regulations governing various matters, including:

- environmental protection;
- the management and use of toxic substances and explosives;
- the management of natural resources;
- the exploration of mineral properties;
- exports;
- price controls;
- taxation and mining royalties;
- labor standards and occupational health and safety, including mine safety;
      and
- historic and cultural preservation.

Failure to comply with applicable laws and regulations may
  result in civil or criminal fines or penalties or enforcement actions, including
  orders issued by regulatory or judicial authorities enjoining or curtailing
  operations or requiring corrective measures, installation of additional
  equipment or remedial actions, or the imposition of additional local or foreign
  parties as joint venture partners, any of which could result in significant
  expenditures. We may also be required to compensate private parties suffering
  loss or damage by reason of a breach of such laws, regulations or permitting
  requirements. It is also possible that future laws and regulations, or more
  stringent enforcement of current laws and regulations by governmental
  authorities, could cause us to incur additional expense or capital expenditure
  restrictions or suspensions of our activities and delays in the exploration and
  development of our properties.

We require further permits in order to conduct our
  current and anticipated future operations, and delays in obtaining or failure to
  obtain such permits, or a failure to comply with the terms of any such permits
  that we have obtained, would adversely affect our business.

Our current and anticipated future operations, including
  continued production at the Pirquitas Mine, and further exploration, development
  and commencement of production on our other mineral properties, require permits
  from various governmental authorities. Obtaining or renewing governmental
  permits is a complex and time-consuming process. The duration and success of
  efforts to obtain and renew permits are contingent upon many variables not
  within our control.

We cannot provide assurance that all permits that we require
  for our operations, including any for construction of mining facilities or
  conduct of mining, will be obtainable or renewable on reasonable terms, or at all. Delays or a failure to obtain such required
  permits, or the expiry, revocation or failure by us to comply with the terms of
  any such permits that we have obtained, would adversely affect our business.

- 9 -

---

Our activities are subject to environmental laws and
  regulations that may increase our costs and restrict our operations.

All of our exploration, potential development and production
  activities in Argentina, Australia, Canada, Chile, Mexico, Peru and the United
  States are subject to regulation by governmental agencies under various
  environmental laws. To the extent that we conduct exploration activities or
  undertake new mining activities in other countries, we will also be subject to
  environmental laws and regulations in those jurisdictions. These laws address
  emissions into the air, discharges into water, management of waste, management
  of hazardous substances, protection of natural resources, antiquities and
  endangered species and reclamation of lands disturbed by mining operations.
  Environmental legislation in many countries is evolving and the trend has been
  towards stricter standards and enforcement, increased fines and penalties for
  non-compliance, more stringent environmental assessments of proposed projects
  and increasing responsibility for companies and their officers, directors and
  employees. Compliance with environmental laws and regulations may require
  significant capital outlays on our behalf and may cause material changes or
  delays in our intended activities. Future changes in these laws or regulations
  could have a significant adverse impact on some portion of our business, causing
  us to re-evaluate those activities at that time.

Environmental laws in some of the countries in which we operate
  require that we periodically perform environmental impact studies at our mines.
  At present, environmental impact studies are being performed at the Pirquitas
  Mine and the San Luis Project. These studies are at an early stage and we are
  currently unable to discern the results of these studies. We cannot guarantee
  that these studies will not reveal environmental impacts that would require us
  to make significant capital outlays or cause material changes or delays in our
  intended activities, any of which could adversely affect our business.

Land reclamation requirements for our exploration
  properties may be burdensome.

Although variable depending on location and the governing
  authority, land reclamation requirements are generally imposed on mineral
  exploration companies (as well as companies with mining operations) in order to
  minimize long term effects of land disturbance. Reclamation may include
  requirements to:

- control dispersion of potentially deleterious effluents; and
- reasonably re-establish pre-disturbance land forms and vegetation.

In order to carry out reclamation obligations imposed on us in
  connection with our exploration, potential development and production
  activities, we must allocate financial resources that might otherwise be spent
  on further exploration and development programs. Certain of our projects have
  been subject to historic mining operations and certain of the properties that
  were historically mined by us are subject to remediation obligations. We have
  set up a provision for our reclamation bonds but this provision may not be
  adequate. If we are required to carry out unanticipated reclamation work, our
  financial position could be adversely affected.

Our properties may be subject to uncertain
  title.

We cannot provide assurance that title to our properties will
  not be challenged. We own, lease or have under option, unpatented and patented
  mining claims, mineral claims or concessions which constitute our property
  holdings. The ownership and validity, or title, of unpatented mining claims and
  concessions are often uncertain and may be contested. Also, we may not have, or
  may not be able to obtain, all necessary surface rights to develop a property.
  Title insurance is generally not available for mineral properties and our ability to ensure that we have obtained a secure claim to
  individual mining properties or mining concessions may be severely constrained.
  We have not conducted surveys of all of the claims in which we hold direct or
  indirect interests. A successful claim contesting our title to a property will
  cause us to lose our rights to explore and, if warranted, develop that property
  or undertake or continue production thereon. This could result in our not being
  compensated for our prior expenditures relating to the property.

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The sale of our concentrates will be subject to
  counterparty and market risks.

We have entered into supply arrangements to sell some of the
  silver, tin and zinc concentrates to be produced at the Pirquitas Mine to
  integrated mining and smelting companies. There is no assurance that in the
  future, where necessary, we will be successful in entering into such
  arrangements on acceptable terms, or at all. If we are not successful in
  entering into such arrangements, we may be forced to sell all of our
  concentrates, or greater volumes of them than we may from time to time intend,
  in the spot market, or we may not have a market for our concentrates. In
  addition, should any counterparty to any supply arrangement we may enter into
  not honour such arrangement, or should any of such counterparties become
  insolvent, we may incur losses for products already shipped and be forced to
  sell greater volumes of our concentrates than intended in the spot market or we
  may not have a market for our concentrates, and our future operating results may
  be materially adversely impacted as a result. Moreover, there can be no
  assurance that we will be able to renew any agreements we may enter into to sell
  concentrates when such agreements expire, or that our concentrates will meet the
  qualitative requirements under future concentrate agreements or the requirements
  of buyers.

Political or economic instability or unexpected
  regulatory change in the countries where our properties are located could
  adversely affect our business.

Certain of our properties are located in countries, provinces
  and states more likely to be subject to political and economic instability, or
  unexpected legislative change, than is usually the case in certain other
  countries, provinces and states. The operation of the Pirquitas Mine and our
  mineral exploration or potential development activities could be adversely
  affected by:

- political instability and violence;
- war and civil disturbance;
- labor unrest;
- expropriation or nationalization;
- changing fiscal regimes and uncertain regulatory environments;
- fluctuations in currency exchange rates;
- high rates of inflation;
- changes to royalty and tax regimes, including the elimination of tax
      exemptions;
- underdeveloped industrial and economic infrastructure; and
- the unenforceability of contractual rights and judgments.

Currently, Argentina, where our operating Pirquitas mine is
  located, is experiencing high rates of inflation, causing upward pressure on
  labor costs.

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We cannot provide assurance that we will successfully
  acquire additional commercially mineable mineral rights.

Most exploration projects do not result in the discovery of
  commercially mineable ore deposits, and no assurance can be given that any
  anticipated level of recovery of ore reserves will be realized or that any
  identified mineral deposit will ever qualify as a commercially mineable (or
  viable) ore body which can be legally and economically exploited. Estimates of
  reserves, resources, mineral deposits and production costs can also be affected
  by such factors as environmental permitting regulations and requirements,
  weather, environmental factors, unforeseen technical difficulties, unusual or
  unexpected geological formations and work interruptions.

Material changes in ore reserves, grades, stripping ratios or
  recovery rates may affect the economic viability of any project. Our future
  growth and productivity will depend, in part, on our ability to identify and
  acquire additional commercially mineable mineral rights, and on the costs and
  results of continued exploration and potential development programs. Mineral
  exploration is highly speculative in nature and is frequently non-productive.
  Substantial expenditures are required to:

- establish ore reserves through drilling and metallurgical and other testing
      techniques;
- determine metal content and metallurgical recovery processes to extract
      metal from the ore; and
- construct, renovate or expand mining and processing facilities.

In addition, if we discover ore, it would take several years
  from the initial phases of exploration until production is possible. During this
  time, the economic feasibility of production may change. As a result of these
  uncertainties, there can be no assurance that we will successfully acquire
  additional commercially mineable (or viable) mineral rights.

We may be adversely affected by future fluctuations in
  foreign exchange rates.

We maintain our bank accounts primarily in U.S. and Canadian
  dollars and Argentine Pesos. Our revenues are in U.S. dollars, while certain of
  our costs will be incurred in other currencies. In particular, any appreciation
  in the currencies of Argentina, Australia, Canada, Chile, Mexico or other
  countries where we carry out exploration or development activities against the
  U.S. dollar will increase our costs of carrying on operations in such countries.
  With the operation of the Pirquitas Mine, our costs denominated in the currency
  of Argentina have increased over past levels, and we have greater exposure to
  Argentinean currency fluctuations. In addition, any decrease in the Canadian
  dollar against the U.S. dollar will result in a loss on our books to the extent
  we hold funds in Canadian dollars. As a result, our financial performance and
  forecasts can be significantly impacted by changes in foreign exchange
  rates.

High metal prices in recent years have encouraged
  increased mining exploration, development and construction activity, which has
  increased demand for, and cost of, exploration, development and construction
  services and equipment.

The relative strength of metal prices over the past five years
  has encouraged increases in mining exploration, development and construction
  activities around the world, which has resulted in increased demand for, and
  cost of, exploration, development and construction services and equipment. While
  recent market conditions have had a moderating effect on the costs of such
  services and equipment, increases in such costs may continue with the resumption
  of an upward trend in metal prices. Increased demand for services and equipment
  could result in delays if services or equipment cannot be obtained in a timely
  manner due to inadequate availability, and may cause scheduling difficulties due
  to the need to coordinate the availability of services or equipment, any of which could
  materially increase project exploration, development and/or construction
  costs.

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We face industry competition in the acquisition of
  exploration properties and the recruitment and retention of qualified
  personnel.

We compete with other exploration and producing companies, many
  of which are better capitalized, have greater financial resources, operational
  experience and technical capabilities than us or are further advanced in their
  development or are significantly larger and have access to greater mineral
  reserves, for the acquisition of mineral claims, leases and other mineral
  interests as well as for the recruitment and retention of qualified employees
  and other personnel. In particular, we face competition for qualified personnel
  for the Pirquitas Mine, which may increase our costs of operating the mine or
  result in delays. A significant number of expatriate employees are currently
  required in the early stages of production at the Pirquitas Mine to train the
  local workforce. If we require and are unsuccessful in acquiring additional
  mineral properties or qualified personnel, we will not be able to grow at the
  rate we desire, or at all.

Some of our directors and officers have conflicts of
  interest as a result of their involvement with other natural resource
  companies.

Some of our directors and officers are directors or officers of
  other natural resource or mining-related companies. Currently, John Smith, our
  Chief Executive Officer, and Tom Yip, Vice President, Finance and Chief
  Financial Officer, both serve as directors of Pretium, and, as of the date of
  this Annual Report, we own over 40% of Pretiums outstanding common shares. These
  associations may give rise to conflicts of interest from time to time. As a
  result of these conflicts of interest, we may miss the opportunity to
  participate in certain transactions, which may have a material adverse effect on
  our financial position.

We are subject to claims and legal
  proceedings.

We are subject to various claims and legal proceedings covering
  a wide range of matters that arise in the ordinary course of business
  activities. Each of these matters is subject to various uncertainties and it is
  possible that some of these matters may be resolved unfavorably to us. We carry
  liability insurance coverage and establish reserves for matters that are
  probable and can be reasonably estimated. In addition, we may be involved in
  disputes with other parties in the future that may result in litigation, which
  may have a material adverse impact on our future cash flows, profitability,
  results of operations and financial condition.

We may experience difficulty attracting and retaining
  qualified management to grow our business.

We are dependent on the services of key executives and other
  highly skilled and experienced executives and personnel focused on advancing our
  corporate objectives as well as the identification of new opportunities for
  growth and funding. Due to our relatively small size, the loss of any of these
  persons or our inability to attract and retain suitable replacements for them or
  additional highly skilled employees required for the operation of the Pirquitas
  Mine and our other activities may have a material adverse effect on our business
  and financial condition.

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We may fail to maintain adequate internal control over
  financial reporting pursuant to the requirements of the Sarbanes-Oxley
  Act.

During our five most recent fiscal years, we documented and
  tested our internal control procedures in order to satisfy the requirements of
  Section 404 of the Sarbanes-Oxley Act (SOX). SOX requires an annual
  assessment by management of the effectiveness of our internal control over
  financial reporting and, for fiscal years commencing with our fiscal year ended December 31,
  2006, an attestation report by our independent auditors addressing the
  effectiveness of internal control over financial reporting. We may fail to
  maintain the adequacy of our internal control over financial reporting as such
  standards are modified, supplemented or amended from time to time, and we may
  not be able to ensure that we can conclude, on an ongoing basis, that we have
  effective internal control over financial reporting in accordance with Section
  404 of SOX. Our failure to satisfy the requirements of Section 404 of SOX on an
  ongoing, timely basis could result in the loss of investor confidence in the
  reliability of our financial statements, which in turn could harm our business
  and negatively impact the trading price or the market value of our securities.
  In addition, any failure to implement required new or improved controls, or
  difficulties encountered in their implementation, could harm our operating
  results or cause us to fail to meet our reporting obligations. Future
  acquisitions of companies, if any, may provide us with challenges in
  implementing the required processes, procedures and controls in our acquired
  operations. No evaluation can provide complete assurance that our internal
  control over financial reporting will detect or uncover all failures of persons
  within our Company to disclose material information otherwise required to be
  reported. The effectiveness of our processes, procedures and controls could also
  be limited by simple errors or faulty judgments. In addition, as we continue to
  expand, the challenges involved in implementing appropriate internal control
  over financial reporting will increase and will require that we continue to
  improve our internal control over financial reporting. Although we intend to
  expend substantial time and incur substantial costs, as necessary, to ensure
  ongoing compliance, we cannot be certain that we will be successful in complying
  with Section 404 of SOX.

Risks Related to our Common Shares

Future sales or issuances of equity securities could
  decrease the value of any existing common shares, dilute investors voting power
  and reduce our earnings per share.

We may sell additional equity securities (including through the
  sale of securities convertible into common shares) and may issue additional
  equity securities to finance our operations, development, exploration,
  acquisitions or other projects. We cannot predict the size of future sales and
  issuances of equity securities or the effect, if any, that future sales and
  issuances of equity securities will have on the market price of our common
  shares. Sales or issuances of a substantial number of equity securities, or the
  perception that such sales could occur, may adversely affect prevailing market
  prices for our common shares. With any additional sale or issuance of equity
  securities, investors will suffer dilution of their voting power and may
  experience dilution in our earnings per share.

Our common shares are publicly traded and are subject to
  various factors that have historically made our common share price
  volatile.

The market price of our common shares has been, and may
  continue to be, subject to large fluctuations, which may result in losses to
  investors. The market price of our common shares may increase or decrease in
  response to a number of events and factors, including: our operating performance
  and the performance of competitors and other similar companies; volatility in
  metal prices; the publics reaction to our press releases, material change
  reports, other public announcements and our filings with the various securities
  regulatory authorities; changes in earnings estimates or recommendations by
  research analysts who track our common shares or the shares of other companies
  in the resource sector; changes in general economic and/or political conditions;
  the number of common shares to be publicly traded after an offering of our
  common shares; the arrival or departure of key personnel; acquisitions,
  strategic alliances or joint ventures involving us or our competitors; and the
  factors listed under the heading Cautionary Note Regarding Forward-Looking
  Statements.

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The market price of our common shares is affected by many other
  variables which are not directly related to our success and are, therefore, not
  within our control, including other developments that affect the market for all
  resource sector securities, the breadth of the public market for our common
  shares and the attractiveness of alternative investments. The effect of these
  and other factors on the market price of our common shares on the exchanges on
  which they trade has historically made our common share price volatile and
  suggests that our common share price will continue to be volatile in the
  future.

We do not intend to pay any cash dividends in the
  foreseeable future.

We have not declared or paid any dividends on our common shares
  since 1955. We intend to retain earnings, if any, to finance the growth and
  development of our business and do not intend to pay cash dividends on our
  common shares in the foreseeable future. Any return on an investment in our
  common shares will come from the appreciation, if any, in the value of our
  common shares. The payment of future cash dividends, if any, will be reviewed
  periodically by our Board of Directors and will depend upon, among other things,
  conditions then existing including earnings, financial condition and capital
  requirements, restrictions in financing agreements, business opportunities and
  conditions and other factors.

|Item 4 | Information on the Company
|------ | --------------------------

| | A. | History and Development of the Company
| | -- | --------------------------------------

General Background

We were incorporated as a company in British Columbia, Canada,
  on December 11, 1946 under the name Silver Standard Mines, Limited (NPL) and
  changed our name to Silver Standard Mines Limited on July 18, 1979. We changed
  our name to Consolidated Silver Standard Mines Limited and consolidated our
  common shares on a 1-for-5 basis on August 9, 1984. All references to the number
  of shares or per share data in this Annual Report refer to consolidated
  shares/data, unless otherwise indicated. We changed our name to Silver Standard
  Resources Inc. on April 9, 1990. On May 12, 2005, our shareholders adopted new
  articles as required by the new British Columbia Business Corporations Actand authorized an increase in our authorized capital from 100,000,000 common
  shares without par value to an unlimited number of common shares without par
  value.

Our head office and registered and records office is located
  at: Suite 1400 - 999 West Hastings Street, Vancouver, British Columbia, Canada
  V6C 2W2. The contact person is Guy Davis, Assistant Corporate Secretary and
  Corporate Counsel. The telephone number is (604) 689-3846; the facsimile number
  is (604) 689-3847.

In February 2010, we completed the sale of all of our interest
  in the Silvertip Project to Silvercorp Metals Inc. (Silvercorp). See Item 4.B
  - Business Overview  Mineral Properties  Silvertip Project.

In December 2010, we completed the sale of our 100% interest in
  the Snowfield Project and Brucejack Project to Pretium. See Item 4.B  Business
  Overview  Mineral Projects  Snowfield Project and Brucejack Project.

On February 28, 2011, we entered into a letter agreement with
  Esperanza Resources Corp. (Esperanza) to purchase all of Esperanzas remaining
  interest in the San Luis project. Upon closing of the transaction, which is
  scheduled for April 30, 2011, we will own 100% of the San Luis project, subject
  to a 1% net smelter returns royalty. See Item 4.B  Business Overview  Mineral
  Projects  San Luis Project.

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On March 23, 2011, Pretium Resources Inc. filed a preliminary
  prospectus in connection with a proposed sale by us of a portion of our equity
  interest in Pretium. The number of Pretium common shares that we will sell and
  the price at which we will sell such shares, are not determined as of March 28,
  2011, and will be determined based on marketed efforts by the underwriters in
  connection with the proposed offering. The offering is subject to customary
  conditions, including receipt of all necessary regulatory approvals, and is
  scheduled to close in early April, 2011.

The information contained in this Annual Report is current as
  at December 31, 2010, other than where a different date is specified.

| | B. | Business Overview
| | -- | -----------------

All disclosure about our exploration properties in this Annual
  Report conforms to the standards of the SECs Industry Guide 7, Description
    of Property by Issuers Engaged or to be Engaged in Significant Mining
    Operations, other than disclosure of Mineral Resources, Measured Mineral
  Resources, Indicated Mineral Resources and Inferred Mineral Resources,
  which are geological and mining terms as defined in accordance with Canadian
  National Instrument 43-101 under the guidelines set out in the CIM Standards.
  U.S. investors in particular are advised to read carefully the definitions of
  these terms as well as the explanatory and cautionary notes in the Glossary, and
  the cautionary notes below, regarding use of these terms.

We are a silver resource company that has assembled a portfolio
  of silver dominant projects since 1994. Certain of our projects also contain
  significant gold resources. Our properties are located in Argentina, Australia,
  Canada, Chile, Mexico, Peru and the United States. We continue to explore for,
  and acquire, if warranted, silver properties throughout the world. We are now
  focused on operating and producing silver from our Pirquitas Mine, and on
  advancing our other mineral projects and project pipeline. None of our
  properties, other than the Pirquitas Mine, are currently beyond the advanced
  exploration stage. A commercially viable mineral deposit may not exist on any of
  our exploration stage properties, and further exploration work may be required
  before a final evaluation as to the economic and legal feasibility of any
  property is determined. See Item 3.D  Risk Factors.

In addition to the Pirquitas Mine located in the Province of
  Jujuy, Argentina, we have several mineral projects: a 70% interest (which may be
  increased to 80% by funding certain expenditures) in the San Luis Project in the
  Ancash Department, Peru; the Pitarrilla and San Agustin Projects in Durango
  State, Mexico; and the Diablillos Project in Salta Province, Argentina. We have
  a large portfolio of mineral properties: the Berenguela Project in Peru; the
  Nazas Project in Durango State, Mexico; the Challacollo Project in Chile; the
  Candelaria Mine Project in west central Nevada, U.S.A.; a 55% interest in the
  Maverick Springs Project in northern Nevada, U.S.A., (representing all of the
  silver resources hosted in the project); the Bowdens Project in New South Wales,
  Australia; the Sunrise Lake Deposit in the Northwest Territories, Canada and the
  Veta Colorada Project in Chihuahua State, Mexico. Included in our mineral
  property projects is the San Marcial Project in Mexico, which is currently
  optioned to a third party (see Item 4.B -Business Overview - Mineral
  Properties). In categorizing our projects, we consider, among other things, the
  priority of the project for the ensuing year, proposed expenditures in respect
  of the project for the ensuing year and the stage of exploration of the
  project.

In addition, we have a number of other property holdings in
  Argentina, Australia, Canada, Chile, Mexico and the United States, which are not
  described above.

In February 2010, we sold the Silvertip Project in northern
  British Columbia, Canada. See Item 4.B Business Overview  Mineral Properties
   Silvertip Project. In December, 2010, we sold all of our interest in the
  Snowfield Project and Brucejack Project in northern British Columbia to Pretium
  Resources Inc. In addition to receiving C$228 million in gross cash
  proceeds, we retained a 42.3% equity interest in Pretium. See Item 4.B 
  Business Overview  Mineral Projects  Snowfield and Brucejack Projects.

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On February 28, 2011, we entered into a letter agreement with
  Esperanza, pursuant to which we have agreed to purchase Esperanzas remaining
  interest in the San Luis Joint Venture for the following consideration:

- C$17 million payable on closing;
- the transfer to Esperanza of the 6,459,600 shares in Esperanza that we
      currently own; and
- a royalty equal to 1% of the net smelter returns on property, subject to
      the joint venture agreement.

On completion of the transaction, we will own 100% of the San
  Luis project, subject to the 1% net smelter returns royalty granted to
  Esperanza. The transaction is scheduled to be completed on or before April 30,
  2011, and is subject to customary securities and other regulatory approvals.

Marketing

The Company began production at its Pirquitas Mine effective
  December 1, 2009, and prior to that produced only minimal amounts of silver. The
  Pirquitas Mine produced 6.3 million ounces of silver in 2010 and began producing
  zinc concentrates in the third quarter of 2010.

The Company began marketing concentrate during 2009 and, due to
  the early stage and variability of production in 2009 and throughout the first
  nine months of 2010, the Company markets its concentrate to a single trading
  counterparty. Sales of concentrate to this company amounted to 100% of total
  metal sales in 2010. Generally, the loss of a single trading counterparty would
  not adversely affect the Company due to the liquidity of the markets and the
  availability of alternative trading counterparties. There were no sales of zinc
  concentrates in 2010; the zinc concentrate sales will commence in 2011.

During 2011, the Company intends to review various marketing
  alternatives from a geographically diverse group of third party smelters and
  refiners, as we optimize our silver and zinc production. There were no sales of
  silver concentrate to third-party smelters for the year ended December 31, 2010.
  In the future, the loss of any one smelting and refining client may have a
  material adverse effect on the Company if alternate smelters and refiners are
  not available. The Company believes there is sufficient global capacity
  available to address the loss of any one smelter.

Silver Prices

The Companys operating results will be substantially dependent
  upon the world market prices of silver. The Company has no control over silver
  prices, which can fluctuate widely. Silver traded between $30.70 and $15.14 per
  ounce during 2010 as reported on the London Metal Bulletin.

Mine Safety Disclosure

Pursuant to Section 1503(a) of the recently enacted Dodd-Frank
  Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act), issuers that are
  operators, or that have a subsidiary that is an operator, of a coal or other
  mine in the United States are required to disclose in their periodic reports
  filed with the SEC information regarding specified health and safety violations,
  orders and citations, related assessments and legal actions, and mining-related
  fatalities. During the fiscal year ended December 31, 2010, the Company had no
  such specified health and safety violations, orders or citations, related assessments or legal actions, mining-related fatalities, or
  similar events in relation to the Companys United States operations requiring
  disclosure pursuant to Section 1503(a) of the Dodd-Frank Act.

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Operating Mine

Pirquitas Mine

Under an agreement dated June 21, 2002, we acquired from
  Stonehill Institutional Partners, L.P., Stonehill Offshore Partners Limited and
  Stonehill Capital Management, LLC a 43.4% interest in Sunshine Argentina, Inc.,
  a Delaware corporation, the holder of the rights to the Pirquitas Mine located
  in the Province of Jujuy, Argentina. The total purchase price for the 43.4%
  interest was:

- the payment at closing of $3,000,000 in cash; and
- the issuance of a $1,340,000 convertible debenture, with a term of one
      year, an exercise price of C$5.80 per share and an interest rate of 10% per
      annum.

The debenture was fully converted by the holder by December 31,
  2002 into 360,636 common shares in our capital. At the time of the acquisition
  of 43.4% interest in Sunshine Argentina, Inc., we became the operator of the
  Pirquitas Mine.

Under an agreement dated October 20, 2004, we acquired from
  Elliott International L.P., The Liverpool Limited Partnership and Highwood
  Partners, L.P. a 56.6% interest in Sunshine Argentina, Inc., for a 100% total
  interest, on the issuance of 2.663 million common shares in our capital.

We currently own 100% of the issued and outstanding shares in
  the capital of Sunshine Argentina, Inc. (now known as Mina Pirquitas, Inc.) for
  a 100% interest in the Pirquitas Mine.

In December 2009, the Pirquitas Mine achieved production status
  and in 2010, produced 6.3 million ounces of silver.

The Pirquitas mine has a fiscal stability agreement with the
  government of Argentina dating from 1998. In 2002, the government of Argentina
  implemented an export duty on concentrates that did not apply to companies with
  pre-existing fiscal stability agreements. In December 2007 the National Customs
  Authority of Argentina levied an export duty of 10% on concentrates for projects
  with fiscal stability agreements predating 2002. We have been advised that the
  project is subject to this export duty despite our rights under our fiscal
  stability agreement from 1998. The legality of the export duty has been
  challenged and is currently under review by the court in Argentina. In July
  2010, we filed a claim in the Federal Court of Jujuy Province for the repayment
  of export duties paid to date and for an order to cease payment of the export
  duty until the matter is decided by the court. The court granted an order
  effective September 29, 2010 to cease payment of the export duty pending the
  courts determination of the legality of export duty. Up to December 31, 2010
  the Pirquitas mine has paid $6,646,000 in export taxes on concentrate sales and
  accrued for an additional $3,095,000 since we received the order to cease
  payment. The export tax expense has been recorded within cost of sales until a
  resolution is reached, if these duties are recovered in the future we will
  recognize a gain in the statement of earnings for the full amount.

Mineral Projects

San Luis Project

On March 22, 2005, we entered into an agreement with Esperanza
  Silver Corp. (Esperanza) for the evaluation of mineral prospects in central
  Peru. Under the evaluation agreement,

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- we agreed to contribute $300,000; and
- Esperanza agreed to contribute $200,000 and certain know-how;

to carry out agreed upon evaluation programs for mineral
  prospects, with Esperanza acting as operator. In the event Esperanza acquired or
  proposed to acquire any mineral property as a result of an evaluation program,
  we could elect to enter into a joint venture with Esperanza for the exploration
  of the mineral property on the following terms:

- we would initially hold a 50% interest in the joint venture and Esperanza
      would initially hold a 50% interest in the joint venture;
- we could elect on the formation of the joint venture to increase our
      interest in the joint venture to 55% by funding the first $500,000 in
      exploration expenditures;
- once we incurred the first $500,000 in exploration expenditures or, if we
      did not elect to increase our interest to 55%, following the formation of the
      joint venture, we would incur with Esperanza $1.5 million in exploration
      expenditures in proportion to our respective interests in the joint venture;
- once we incurred with Esperanza $1.5 million in exploration expenditures,
      we could elect to increase our interest in the joint venture to 70% by paying
      all costs required to be incurred to complete a feasibility study for the
      project; and
- if we elected to increase our interest to 70% by completing a feasibility
      study, on completion of the feasibility study we could elect to increase our
      interest in the joint venture to 80% by paying all costs required to be
      incurred to place the property into commercial production.

In August 2005, Esperanza advised us of the acquisition of
  certain mineral concessions, known as the San Luis Project, as the result of an
  evaluation program carried out under the evaluation agreement. On September 6,
  2005, we entered into a joint venture agreement with Esperanza for the
  exploration of the San Luis Project (the San Luis Joint Venture) on the terms
  set out above and elected to increase our interest in the joint venture to 55%
  by funding the first $500,000 in exploration expenditures. During 2006, we
  earned a 55% interest in the joint venture and commenced incurring $1.5 million
  in exploration expenditures with Esperanza in proportion to our respective
  interests in the joint venture. In March 2006, we received notice from Esperanza
  that the joint venture had incurred $1.5 million in exploration expenditures on
  the San Luis Project. Following receipt of the notice, we elected to increase
  our interest in the San Luis Joint Venture to 70% by paying all costs required
  to be incurred to complete a feasibility study. In June 2010, we completed a
  feasibility study, and accordingly our interest automatically increased to
  70%.

On February 28, 2011, we entered into a letter agreement with
  Esperanza, pursuant to which we have agreed to purchase Esperanzas remaining
  interest in the San Luis Joint Venture for the following consideration:

- C$17 million payable on closing;
- the transfer to Esperanza of the 6,459,600 shares in Esperanza that we
      currently own; and
- a royalty equal to 1% of the net smelter returns on property, subject to
      the joint venture agreement.

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On completion of the transaction, we will own 100% of the San
  Luis project, subject to the 1% net smelter returns royalty granted to
  Esperanza. The transaction is scheduled to be completed on or before April 30,
  2011, and is subject to customary securities and other regulatory approvals.

Pitarrilla Project

We acquired by staking the original mineral claim covering the
  Pitarrilla Project in November 2002, acquired two contiguous claims by staking
  in 2003 and 2004 and acquired a fourth contiguous claim by staking in 2005. In
  addition, in 2004/2005 we acquired two adjoining claims, the Pena and Pena 1
  claims, on payment of $300,000 and a third adjoining claim, the America claim,
  on payment of $250,000. Since then, we have acquired two additional claims by
  staking. We agreed to pay the following finders fee to La Cuesta International,
  Inc. in respect of our acquisition of the Pitarrilla Project:

- $5,000 in cash following the staking of the property;
- the greater of (i) $5,000 and (ii) 2% of our direct exploration
      expenditures on the property, payable every six months; and
- a 0.25% net smelter returns royalty applicable to all gold and silver
      produced from the property;

provided that the maximum amount payable in respect of the
  finders fee was an aggregate of $500,000.

In 2007, we paid La Cuesta the remainder of the $500,000
  finders fee. Accordingly, we currently own a 100% interest in the Pitarrilla
  Project.

Diablillos Project

As of November 1, 2001, we entered into a purchase agreement
  with Silver Standard (BVI) Inc. (our wholly-owned subsidiary), Pacific Rim
  Mining Corp. (Pacific Rim) and Pac Rim Cayman and Pac Rim Caribe (III)
  (wholly-owned subsidiaries of Pacific Rim). Under the agreement, we agreed to
  acquire all of Pacific Rims interest in the Diablillos Project located in Salta
  Province, Argentina through the acquisition of all of the shares of two indirect
  wholly-owned subsidiaries of Pacific Rim: Salta Gold Ltd. and Pacific Rim Mining
  Corporation Argentina S.A. Under the terms of the agreement, we agreed to pay
  Pacific Rim $3,400,000 in staged payments of:

- $1,000,000 payable in cash on closing;
- $500,000 payable in cash on December 31, 2001;
- $500,000 payable in cash or our shares, at our election, on or before June
      30, 2002;
- $500,000 payable in cash or our shares, at our election, on or before
      December 31, 2002;
- $500,000 payable in cash or our shares, at our election, on or before June
      30, 2003; and
- $400,000 payable in cash or our shares, at our election, on or before
      December 31, 2003.

On December 14, 2001, we completed the acquisition of the
  Diablillos Project and made the $1,000,000 cash payment due on closing. On
  December 31, 2001, we paid the $500,000 payment then due, and on January 18,
  2002 issued 383,025 common shares in our capital in satisfaction of the payments
  due on June 30, 2002 and December 31, 2002. On June 28, 2002, we issued 142,970
  common shares in our capital in satisfaction of the payments due on June 30,
  2003 and December 31, 2003. The total purchase price was C$5,433,000, with
  C$5,430,000 allocated for the property and C$3,000 allocated for a provision for
  reclamation.

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We currently own a 100% interest in the Diablillos Project.

San Agustin Project

We acquired by staking the mineral claims covering the San
  Agustin Project located in Durango State, Mexico in April 2003. We have agreed
  to pay the following finders fee to La Cuesta International, Inc. in respect of
  our acquisition of the San Agustin Project:

- $5,000 in cash following the staking of the property (paid);
- the greater of (i) $5,000 and (ii) 2% of our direct exploration
      expenditures on the property, payable every six months; and
- a 0.25% net smelter returns royalty applicable to all gold and silver
      produced from the property;

provided that the maximum amount payable in respect of the
  finders fee is an aggregate of $500,000.

In August 2006, we granted an option to acquire a 100% interest
  in the San Agustin Project to Geologix under an agreement dated August 25, 2006
  with Silver Standard Mexico S.A. de C.V.,Geologix and Geologix
  Explorations Mexico, S.A. de C.V. (Silver Standard Mexico S.A. de C.V. and
  Geologix Explorations Mexico, S.A. de C.V. are wholly-owned subsidiaries of
  Silver Standard and Geologix, respectively). In order to maintain the option in
  good standing under the terms of the option agreement, Geologix was required
  to:

- issue to us:
- 500,000 shares of Geologix following the signing of the
        agreement (issued); and
- 500,000 shares of Geologix on or before the first
        anniversary of the agreement (issued);
- incur exploration expenditures of not less than $2
      million on or before the second anniversary of the date of the agreement,
      which expenditures were to include:
- exploration expenditures of not less than $500,000 on or
        before the first anniversary of the agreement; and
- at least 15,000 meters of drilling completed in
        accordance with an agreed upon drill program on or before the second
        anniversary of the agreement; and
- cause an estimate of the silver resource and gold
      resource for the property to be prepared in accordance with Canadian
      National Instrument 43-101 within 27 months after the date of the
      agreement.

In order to exercise the option under the terms of the option
  agreement, Geologix was required to:

- pay us in respect of the silver resource:
- 10% of the gross value of the silver resource, if the
        price of silver was less than or equal to $10.00 per ounce, provided that
        if the silver price was less than $5.50 per ounce, the silver price was to
        be deemed to be $5.50 per ounce; or
- $1.00 per ounce of silver resource, if the price of
        silver was greater than $10 per ounce, but less than or equal to $20 per
        ounce; or
- $1.50 per ounce of silver resource, if the price of
        silver was greater than $20 per ounce;
- pay us in respect of the gold
      resource:

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- $15 per ounce of gold resource, if the price of
        gold was less than or equal to $750 per ounce; or
- $20 per ounce of gold resource, if the price of
        gold is greater than $750 per ounce; less:
- exploration expenditures incurred, up to a
        maximum of $2,000,000; and
- the value of the shares of Geologix issued to
        us to maintain the option described above; and
- grant us a royalty of 2.5% of net
      smelter returns applicable to all minerals produced from the San Agustin
      Project, that were not within the estimate of the silver resource and gold
      resource, up to a maximum of 2 million ounces of gold equivalent.

If the estimate of the silver resource was equal to or greater
  than 50 million ounces of silver and Geologix exercised the option, we had the
  right to elect to acquire a 50% interest in the San Agustin Project by incurring
  expenditures over two years equal to three times the exploration expenditures
  incurred by Geologix, provided that Geologix could have elected that we pay to
  Geologix up to 1.5 times their exploration expenditures in cash and incur the
  remaining 1.5 times their exploration expenditures on exploration.

In September 2007, we agreed with Geologix to amend the option
  agreement to provide for, among other things, Geologix to drill the required
  meterage in accordance with a revised drill program, an extension of one month
  to the time required to deliver the resource estimate (from 27 months to 28
  months after the date of the option agreement) and the release of our rights to
  back-in for a 50% interest in the property.

On August 12, 2008, Geologix delivered to us notice that it had
  incurred the required expenditures under the option agreement. Under the terms
  of the option agreement, Geologix had four months following delivery of notice
  that it had incurred the required exploration expenditures to deliver to us the
  resource estimate. On December 12, 2008, Geologix delivered to us the resource
  estimate. Under the terms of the option agreement, Geologix had 60 days
  following delivery of the resource estimate (February 10, 2009) to pay us the
  option exercise payment, which based on then silver and gold prices was
  approximately $34 million. Geologix did not pay us the required amount to
  exercise the option on February 10, 2009 and the option and option agreement
  terminated.

We currently own a 100% interest in the San Agustin Project,
  subject to the above described finders fee capped at $500,000.

Snowfield Project and Brucejack Project

On December 21, 2010, we completed the sale of our 100%
  interest in the Snowfield Project and Brucejack Project located in northern
  British Columbia, Canada to Pretium Resources Inc. (Pretium), a newly formed
  company which completed its initial public offering (IPO) concurrently with
  the closing of the sale, for the following consideration:

- $211.3 million in gross cash proceeds;
- 32,537,833 common shares in Pretium, representing a 41.3% interest of the
      outstanding shares as of the closing of the transaction; and

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- a non-interest bearing promissory note issued by Pretium in the principal
    amount of $39.1 million, automatically convertible into common shares of
    Pretium at a conversion rate of C$6 per share 40 days after closing, to the
    extent not repaid by Pretium.

On January 6, 2011, the underwriters in connection with the IPO
  of Pretium, exercised in part the over-allotment option granted to them in
  connection with the IPO. Pursuant to the terms of the promissory note, we
  received an additional $16.7 million. On January 31, 2011, the balance of the
  promissory note was automatically converted into an additional 3,625,500 common
  shares of Pretium in accordance with its terms. Following this conversion, our
  ownership interest in Pretium increased to 42.31% .

We no longer hold any interest in the Snowfield Project or the
  Brucejack Project, other than indirectly through our ownership of 42.31% of
  Pretiums outstanding shares.

On March 23, 2011, Pretium Resources Inc. filed a preliminary
  prospectus in connection with a proposed sale by us of a portion of our equity
  interest in Pretium. The number of Pretium common shares that we will sell and
  the price at which we will sell such shares, are not determined as of March 28,
  2011, and will be determined based on marketed efforts by the underwriters in
  connection with the proposed offering. The offering is subject to customary
  conditions, including receipt of all necessary regulatory approvals, and is
  scheduled to close in early April, 2011.

Mineral Properties

Berenguela Project

On March 31, 2004, we and our wholly-owned subsidiary, Silver
  Standard Peru S.A., entered into an option agreement with Sociedad Minera
  Berenguela S.A. (SOMINBESA), a Peruvian corporation and the holder of the
  rights to the Berenguela Project located in Peru, and Fossores Ltd. (Fossores)
  under which we acquired an option to acquire all of the in-ground silver
  resources contained in the Berenguela Project in Peru. In order to maintain the
  option in good standing, we were required to:

- issue 17,500 of our common shares to SOMINBESA (issued);
- substantially complete an exploration program on the Berenguela Project
      (completed); and
- cause a silver resource estimate (the Berenguela Resource Estimate) for
      the Berenguela Project to be prepared using all existing data, including data
      generated in the exploration program (prepared).

In order to exercise the option, we were required to issue to
  SOMINBESA, on or before the expiry of a period of 60 days following the filing
  of the Berenguela Resource Estimate with the Canadian Securities Administrators,
  common shares in our capital that were equal to the value (at the time of
  exercise) of the measured, indicated and inferred silver resources in the
  Berenguela Resource Estimate. The silver resources were to be valued at:

- $0.02 if the price of silver was less than or equal to $5.50 per ounce;
- $0.025 if the price of silver was greater than $5.50 per ounce but less
      than or equal to $6.50 per ounce for each ounce of silver; or
- $0.03 if the price of silver was greater than $6.50 per ounce.

Under the terms of the option agreement, we had the right on
  exercise of the option, among other things, to acquire and mine all silver
  resources in excess of those contained in the Berenguela Resource Estimate on
  payment of $0.10 per ounce and independently exploit the silver
  resources on the property if SOMINBESA had not completed a feasibility study and
  commenced the development of the property at the time the price of silver had
  exceeded $7.00 per ounce, averaged over a consecutive 130 day period.

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On March 31, 2004, we also entered into a funding agreement
  with Fossores, under which Fossores agreed to provide us with:

- all the data in Fossores files concerning the Berenguela Project;
- a computerized index of the data;
- the metallurgical processes that can be used to recover the silver
      resources from the Berenguela Project; and
- a pre-feasibility study that presents an economically viable plan for the
      development of the Berenguela Project, including silver recovery.

Under the funding agreement, we agreed to pay Fossores:

- $20,000 on execution of the Berenguela option agreement
      (paid);
- $180,000 following acceptance for filing of the
      Berenguela option agreement by the TSX Venture Exchange (paid);
      and
- on exercise of the Berenguela option agreement:
- if the price of silver was less than or equal to $5.50
        per ounce, $0.02 for each ounce of measured, indicated and inferred silver
        resources in the Berenguela Resource Estimate;
- if the price of silver was greater than $5.50 per ounce
        but less than or equal to $6.50 per ounce, $0.025 for each ounce of
        measured, indicated and inferred silver resources in the Berenguela
        Resource Estimate;
- if the price of silver was greater than $6.50 per ounce,
        $0.03 for each ounce of measured, indicated and inferred silver resources
        in the Berenguela Resource Estimate.

The option was not exercised as we acquired all of the shares
  of SOMINBESA (the holder of the Berenguela Project) under a separate agreement
  in January 2006.

On December 30, 2005, we entered into an agreement for the
  acquisition of all of the shares of SOMINBESA. Under the purchase agreement, we
  agreed to pay to the vendors, Daniel Kappes, Michael Cassiday and Victor Raul
  Eyzaguirre, an aggregate payment of $2.0 million in cash, issue to the vendors
  common shares in our capital having a value of $8.0 million and grant to the
  vendors a 2% net smelter returns royalty on copper produced from the project
  capped at $3.0 million. On January 12, 2006, we completed the acquisition of the
  shares of SOMINBESA, and the Berenguela Project, and issued 530,504 shares in
  our capital to satisfy the obligation to issue shares in our capital having a
  value of $8.0 million.

We currently have a 100% interest in the Berenguela Project,
  subject to a royalty of 2% of net smelter returns on copper produced from the
  project capped at $3.0 million.

Nazas Project

The Nazas Project comprises three contiguous properties located
  in the Mexican state of Durango, being the Yerbabuena claim group, the San
  Rafael claim group and the Navidad property.

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Under the terms of a purchase agreement with Camino Minerals
  Corporation (Camino) dated March 18, 2010, we acquired from Camino the
  Yerbabuena claim group, which consists of four (4) mineral concessions. Two of
  the concessions (Ampliacion Nazasand Nazas 5) were held 100% by
  Camino, and the other two concessions (Nazas and Nazas 3) were held by
  Camino subject to an agreement dated July 11, 2003 (the LCI Agreement) with La
  Cuesta International, S.A. de C.V. (LCI Mexico), the wholly owned Mexican
  subsidiary of La Cuesta International, Inc. (LCI).

Pursuant to the purchase agreement, we are required to make the
  following payments to Camino:

- $250,000 payable on signing of the agreement (paid); and
- $250,000 payable on the one-year anniversary of the signing of the
      agreement (paid).

Having made the payments under the purchase agreement with
  Camino and therefore acquiring the Yerbabuena property, we are now required to
  make payments to LCI Mexico pursuant to the terms of the LCI agreement.
  According to this agreement, we are required to pay LCI Mexico $15,000 twice per
  year for as long as we maintain the Nazasand Nazas 3claims in
  good standing. If we fail to maintain the Nazasand Nazas3 claims
  in good standing, the ownership of such claims will revert back to LCI Mexico.
  In addition, if metal production is realized from either or both of the Nazasand Nazas 3concessions, we would be required to pay to LCI Mexico a
  production royalty equal to 2% of net smelter returns, or $25,000 per calendar
  year, whichever is greater. Pursuant to the LCI Agreement, we may purchase the
  preproduction payment and 2% net smelter returns royalty from LCI Mexico for
  $2,000,000.

We own 100% of the two concessions (the San Rafaeland San Rafael 2claims) comprising the San Rafael property, subject to the
  terms of a Consulting and Finders Fee Agreement between us and LCI dated May 1,
  2002, as amended. Pursuant to this agreement, we are required to pay LCI, on a
  semi-annual basis, a payment equal to 2% of direct exploration expenditures
  incurred by us, or $5,000, whichever is greater for as long as we maintain the
  property in good standing. We are also required to pay to LCI a 0.25% net
  smelter returns royalty on all gold, silver and all other valuable metals
  produced from these concessions. We may purchase from LCI the pre-production
  payments and production royalty for $2,000,000.

We entered into an option to purchase agreement with Minerales
  y Productos Metalurgicos S.A. de C.V (MPM) on April 26, 2010 in respect of the
  25 concessions comprising the Navidad property. Pursuant to this agreement, we
  can exercise the option to acquire the property by making staged cash payments
  to MPM totalling $5,000,000 over a period of 36 months from the date of the
  agreement. Included in these staged payments are all payments to various
  governmental agencies in Mexico for maintenance of the concession licenses. In
  addition, under the agreement, MPM retains the right to mine any and all mineral
  bodies in which the industrial mineral fluorite constitutes greater than 90% of
  the potential ore. We can purchase MPMs right to mine fluorite from the Navidad
  property for $1,000,000.

We currently own 100% of the Nazas Project, subject to the
  following:

- The pre-production payments and 2% net smelter returns royalty on the Nazasand Nazas 3 concessions payable to LCI Mexico, which we
      may purchase at any time for $2,000,000;
- The pre-production payments and 0.25% net smelter returns royalty on the San Rafaeland San Rafael 2claims payable to LCI, which
      we may purchase at any time for $2,000,000; and

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- Our option to acquire the Navidad property by making $5,000,000 in
    aggregate payments to MPM, and the right granted to MPM to mine for fluorite
    on the Navidad property.

Challacollo Project

Under the terms of an option agreement dated November 16, 2001,
  we acquired from Sociedad Contractual Minera Septentrion (Minera Septentrion)
  an option to acquire a 100% interest in the Challacollo Project located in
  northern Chile. Under the terms of the option agreement, we made cash option
  payments totaling $1,500,000 over two years.

On August 1, 2003, we exercised the option and acquired a 100%
  interest in the Challacollo Project.

A five percent finders fee was included in the cash option
  payments. The project is subject to an existing 2% production royalty capped at
  $850,000 and a 2% production royalty to Minera Septentrion increasing to 3% once
  the existing 2% royalty is fully paid. The Minera Septentrion royalty may be
  purchased for $1,500,000 at any time.

In 2005, we agreed to acquire certain mineral claims adjacent
  to the Challacollo Project. In 2007, we completed the acquisition of these
  mineral claims on issuance of 9,285 of our common shares.

At the date of this Annual Report, we have a 100% interest in
  the Challacollo Project, subject to:

- a 2% production royalty capped at $850,000; and
- a 2% production royalty increasing to 3% once the above 2% royalty is fully
      paid, which may be purchased for $1,500,000 at any time.

Candelaria Mine Project

On November 1, 1999, we entered into an option agreement with
  Kinross Candelaria Mining Company, a Delaware corporation and an indirect
  wholly-owned subsidiary of Kinross Gold Corporation, a Toronto Stock Exchange
  listed company (together Kinross), under which we acquired an option to
  acquire a 100% interest in the Candelaria Mine Project, located in Mineral and
  Esmeralda counties of the State of Nevada. Under the option agreement, in
  consideration of the issuance to Kinross of 50,000 of our common shares, we were
  granted the right to carry out a six month due diligence review of the
  Candelaria Mine Project. In order to exercise the option, we were required
  to:

- make staged cash payments to Kinross totalling C$300,000 over a period of
      12 months;
- issue 600,000 units to Kinross (each unit to consist of one common share
      and one common share purchase warrant, with each warrant entitling Kinross to
      acquire one additional common share for a period of one year at a price of
      C$3.50); and
- pay $1,000,000 to Kinross on commencement of commercial production.

In addition to the payments and share issuances, on exercise of
  the option:

- Kinross could have elected to require us to purchase the processing
      facility located on the mine site for C$300,000; and
- we were to assume all liabilities relating to the mine.

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On March 28, 2000, we entered into an amending agreement with
  Kinross, under which Kinross agreed to extend the term of the option by three
  months (to a nine-month term) on our payment to Kinross of C$50,000 and issuance
  to Kinross of 27,500 of our common shares. Under further amending agreements
  dated July 12, 2000, October 27, 2000 and November 29, 2000, the term of the
  option was extended, without payment of any further consideration, to March 31,
  2001. On March 30, 2001, we delivered notice of exercise of the option to
  Kinross, which provided for the closing of the purchase on amended terms. On
  October 1, 2001, we acquired from Kinross Gold U.S.A., Inc. (Kinross Gold) all
  of the shares of Kinross Candelaria Mining Company, the owner of the Candelaria
  mine and related assets, on:

- payment to Kinross Gold of $65,834;
- issuance to Kinross Gold of 600,000 common shares in our capital and
      600,000 common share purchase warrants, with each warrant entitling Kinross
      Gold to acquire one additional common share until October 1, 2002 at a price
      of C$3.50 per share;
- delivery to Kinross Gold of a promissory note in the amount of C$300,000
      payable on or before April 1, 2002 in cash or our shares, at our election, at
      a price equal to the 20-day average closing price of our shares on the
      Canadian Venture Exchange (we paid the full amount of the promissory note on
      March 26, 2002 by the issuance to Kinross Gold of 70,922 of our common
      shares);
- reimbursement of Kinross Gold of $209,607 for expenses incurred by Kinross
      Gold in respect of the Candelaria mine from April 1, 2001 to September 30,
      2001; and
- the assumption of all liabilities associated with the Candelaria mine.

Under the purchase agreement, Kinross Gold agreed to maintain
  the reclamation bonding for the Candelaria mine in place until April 1, 2003,
  extendable to April 1, 2004 on our payment to Kinross Gold of $50,000.
  Reclamation bonding for the property was $1,679,435, and we pledged the shares
  of Kinross Candelaria Mining Company to Kinross Gold as collateral pending our
  arrangement of reclamation bonding. In March 2003, we paid the $50,000 for
  Kinross Gold to maintain the reclamation bonding in place until April 1, 2004.
  In March 2004, we filed a substitute reclamation bond and related documents with
  the Bureau of Land Management to assume the reclamation bonding for the
  Candelaria Mine. On July 30, 2004, the Bureau of Land Management processed our
  filing and, effective March 8, 2004, accepted our substitute reclamation bond
  and terminated the period of liability of the Kinross Gold reclamation bond. As
  a result, the shares of Kinross Candelaria Mining Company (now known as
  Candelaria Mining Company) are no longer pledged to Kinross Gold.

Under the terms of the purchase agreement, Kinross Gold was
  responsible for completing the reclamation of the mine (including the seeding of
  certain parts of the property), and we agreed, among other things, to assume all
  liabilities, including environmental monitoring, relating to the mine following
  the completion of reclamation by Kinross Gold. Kinross Gold completed the
  reclamation of the Candelaria mine in 2003. With the completion of the
  reclamation of the mine by Kinross Gold, we are responsible for the
  establishment of plant growth on the property. In the event the seeding by
  Kinross Gold on the property does not result in sufficient plant growth, we will
  be required to reseed the property at an estimated cost of $0.3 million; and, if
  reseeding does not establish sufficient plant growth, we will be required to
  place a soil cap on the heap leach pads at an estimated cost of $0.75 million.
  In addition, on reclamation of the mine, we were required to monitor the water
  quality of leach pad drainage at a total estimated cost of $25,500 over a five
  year period (completed).

We acquired the Candelaria mine for the large silver resource
  that remained on the property at the time of closure of the mine by Kinross
  Gold. Our due diligence review of the property included re-drilling nine holes
  in the Deep Diablo area, limited metallurgical studies, engineering scoping
  studies and a complete environmental audit. Our drilling confirmed the original
  resource estimate. Metallurgical and engineering studies demonstrated that
  conventional milling of the ore was feasible at higher silver prices. The
  environmental review did not identify any significant environmental issues and
  confirmed that the substantial amount of reclamation work completed to date
  satisfied state and federal guidelines.

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At the date of this Annual Report, we own all of the shares of
  Candelaria Mining Company, which owns a 100% interest in the Candelaria
  mine.

Maverick Springs Project

As required by a letter agreement dated November 7, 2002 among
  Vista Gold Corporation (Vista), Vista Nevada Corp. (VNC), a wholly-owned
  subsidiary of Vista, and us, on June 9, 2003, our wholly-owned subsidiary,
  Maverick Silver Inc., entered into an exploration and development agreement with
  Vista and VNC, pursuant to which we acquired an option to acquire a 55% interest
  in the Maverick Springs Project located in northern Nevada, representing all of
  the silver resources hosted in the project, subject to underlying agreements and
  royalties described below. This option was exercisable on:

- payment of $300,000 on execution of the exploration and development
      agreement (paid); and
- incurring $1,200,000 over four years to fund required exploration
      expenditures, and payments and option payments (all of which was incurred
      before December 31, 2005).

Under an option agreement dated October 7, 2002 among Newmont
  Mining Corporation and Newmont Capital Limited (together, Newmont), Vista and
  VNC, Newmont granted Vista and VNC an option to acquire a 100% interest in the
  Maverick Springs Project. In order to maintain the option in good standing,
  Vista and VNC assumed responsibility for the following payments and expenditures
  that Newmont was required to make under its mining lease with the owner of the
  property:

- payment of $15,000 on October 1, 2002 (paid);
- payment of $50,000 on October 1, 2003 (paid);
- payment of $100,000 on each October 1stthereafter (paid
      up-to-date);
- a net smelter returns royalty ranging from 1.9% for gold and silver prices
      that are less than $250 and $4.50 per ounce, respectively, to 5.9% for gold
      and silver prices that are greater than $550 and $8.50 per ounce,
      respectively;
- a net smelter returns royalty of 2.9% for all metals other than gold and
      silver; and
- completion of a minimum of 6,400 feet of exploration drilling in each of
      the first three years of the agreement (completed).

In order for Vista and VNC to exercise their option from
  Newmont, they were required to:

- pay Newmont $250,000 in cash (paid);
- reimburse Newmont for 2003 federal maintenance fees of $37,300 (paid);
- issue to Newmont 141,243 shares of Vista (issued) and 141,243 warrants of
      Vista (issued) (with each warrant exercisable for one share of Vista for a
      period of two years at $4.43 per share);
- issue to Newmont, on the first anniversary of the option agreement, the
      number of shares of Vista determined by dividing $500,000 by the weighted
      average closing price of the shares of Vista on the American Stock Exchange
      averaged over the 10-day trading period ending on the day before the first
      anniversary of the agreement (the Weighted Average Price) and an equal
      number of share purchase warrants (with each warrant exercisable for a period
      of two years from the closing at a price equal to 125% of the Weighted Average
      Price) (on October 7, 2003, Vista issued 122,923 common shares and warrants to
      Newmont); and

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- grant to Newmont a 1.5% net smelter returns royalty on production from the
    Maverick Springs Project.

In addition, following the fourth anniversary of the option
  agreement with Newmont, Newmont had the right, on payment of 200% of Vistas
  expenditures on the Maverick Springs Project, to acquire a 51% interest in the
  project. If Newmont had elected to acquire a 51% interest in the Maverick
  Springs Project, expenditures by Vista, following the acquisition of 51% of the
  project by Newmont, would have been capped at $2,000,000 until a feasibility
  study was completed for the project.

In October 2005, we incurred the last of the $1.2 million in
  required expenditures and vested our interest in the Maverick Springs
  Project.

In January 2007, Newmont elected not to acquire a 51% interest
  in the Maverick Springs Project.

In May 2007, Vista assigned all of its rights and obligations
  in respect of the Maverick Springs Project to Allied Nevada Gold Corp.

We currently have a 55% interest in the Maverick Springs
  Project, representing all of the silver resources hosted in the project, subject
  to the net smelter returns royalties payable to the property owner and Newmont
  as described above.

Bowdens Project

We entered into an agreement on December 23, 1996 with Golden
  Shamrock Mines Limited, as amended by an amending agreement dated August 4,
  1997, to acquire all of the issued shares of GSM Exploration Pty Limited (GSM
  Exploration) (now known as Silver Standard Australia Pty Limited) at a cost of
  $6,712,845. The acquisition of the shares of GSM Exploration was completed on
  August 22, 1997. At the time, the only asset of GSM Exploration was the Bowdens
  Project located in New South Wales, Australia, which it acquired from CRA
  Exploration Pty Limited (CRA Exploration) (now known as Rio Tinto Exploration
  Pty Limited) pursuant to the terms of a tenement sale agreement dated August 11,
  1994. Under the terms of the tenement sale agreement, CRA Exploration had the
  right, among other things, to:

- receive a payment of A$1,429,397 on GSM Exploration making a decision to
      mine in respect of the Bowdens Project;
- reacquire up to a 51% interest in the Bowdens Project in the event gold and
      silver resources were delineated on the Bowdens Project in excess of
      A$800,000,000 or base metal resources were delineated on the Bowdens Project
      in excess of A$3,000,000,000 within the six month period following the
      decision to mine; and
- reacquire a 100% interest in the Bowdens Project at no cost in the event
      GSM Exploration did not make a decision to mine in respect of the Bowdens
      Project by August 11, 1999.

On July 31, 1997, prior to completing the acquisition of the
  shares of GSM Exploration, we entered into an agreement with CRA Exploration
  under which CRA Exploration agreed to release all of its rights to reacquire an
  interest in the Bowdens Project in return for:

- the issuance of 160,000 of our common shares (which have since been
      issued);
- the payment of A$1,500,000 on the commencement of commercial production on
      the Bowdens Project; and
- the granting of a royalty of 2% of net smelter returns reducing to 1% of
      net smelter returns after the payment of $5,000,000 in royalties.

- 29 -

---

Accordingly, with the completion of the acquisition of the
  shares of GSM Exploration and the signing of the agreement with CRA Exploration,
  we own 100% of the shares of GSM Exploration for a 100% interest in the Bowdens
  Project, subject to the rights of CRA Exploration to receive:

- the payment of A$1,500,000 on the commencement of commercial production on
      the Bowdens Project; and
- a royalty of 2% of net smelter returns reducing to 1% of net smelter
      returns after the payment of $5,000,000 in royalties.

Sunrise Lake Deposit

Under an agreement dated June 9, 2003 with Northern Hemisphere
  Development Corp. (Northern) and Aber Diamond Corporation (Aber), we
  acquired a 100% interest in the Sunrise Lake Deposit located in the South
  MacKenzie District, Northwest Territories, Canada. Under the agreement:

- we paid Northern $252,442 in cash and issued to Northern 42,938 of our
      common shares;
- we paid Aber $235,558 in cash and issued to Aber 40,066 of our common
      shares; and
- we assumed the remaining reclamation obligations associated with the
      property.

The claims comprised in the Sunrise Lake Deposit are subject to
  a 5% net profits interest royalty.

We currently own a 100% interest in the Sunrise Lake Deposit,
  subject to a 5% net profits interest royalty on claims comprised in the Sunrise
  Lake Deposit.

Veta Colorada Project

On July 27, 2005, we entered into agreements with Mexicana del
  Arco, S.A. de C.V. and Industrial Minera Mexico, S.A. de C.V. to acquire a 100%
  interest in the Veta Colorada Project located in the Parral District of
  Chihuahua State, Mexico. Under the purchase agreements, we agreed to pay $50,000
  (paid) on signing the agreements and a further $3.45 million on satisfactory
  completion of due diligence within 120 days of signing the agreements. We also
  agreed to grant a royalty of 1% of net smelter returns to the vendors. In
  December 2005, the vendors agreed to extend the due diligence period to March
  31, 2006 in consideration of an advance payment of $120,000 (paid) with the
  remaining $3.33 million due by March 31, 2006.

In March 2006, we advised Mexicana del Arco, S.A. de C.V. and
  Industrial Minera Mexico, S.A. de C.V. that we had completed our due diligence
  of the Veta Colorada Project and were ready to complete the acquisition of the
  project. In June 2006, we completed the acquisition of the Veta Colorada Project
  by paying $3.33 million.

We currently own a 100% interest in the Veta Colorada Project,
  subject to a 1% net smelter returns royalty payable to the vendors.

San Marcial Project

In January 2002, we acquired from Gold-Ore Resources Ltd.
  (Gold-Ore) an option to acquire up to a 100% interest in Gold-Ores option to
  acquire the San Marcial Project located in Sinaloa State, Mexico. Under the
  terms of the option:

- we could earn a 50% interest by:
- making cash payments totaling $29,000 by February 4, 2002
        (paid); and
- incurring exploration expenditures of at least $175,000
        by April 30, 2002 (incurred).

- 30 -

---

- We could then earn up to a 100% interest in Gold-Ores
      option by, at our election, either:
- issuing to Gold-Ore 200,000 of our common shares with a
        value of at least $350,000; or
- paying to Gold-Ore $350,000 in a combination of cash and
        our common shares with at least $150,000 in cash.

In addition, if, following the exercise of the option, within
  three years of the date of the option agreement:

- we outlined in excess of 50 million ounces of measured and indicated silver
      resources on the property, in accordance with Canadian National Instrument
      43-101 using a 50 g/t silver cut- off grade, we were to pay to Gold-Ore, in
      cash or our common shares, at our election, $0.005 per ounce for each ounce of
      silver outlined in excess of 50 million ounces; and
- the afternoon fix of the price of silver on the London Mercantile Exchange
      was greater than or equal to $6.50 per ounce for a minimum of 60 consecutive
      days, we were to pay to Gold-Ore, in cash or our common shares, at our
      election, $0.005 per ounce for each ounce of measured and indicated silver
      resources outlined on the property, in accordance with Canadian National
      Instrument 43-101, using a 50 g/t silver cut-off grade.

To exercise Gold-Ores option and earn a 100% interest in the
  San Marcial Project pursuant to the underlying option agreement, we were
  required to:

- make scheduled cash payments to the project vendor, Met-Sin Industriales,
      S.A. de C.V., totaling $462,500.
- incur $400,000 in further exploration expenditures on the project by
      February 4, 2004 ($200,000 of which was required to be incurred by February 4,
      2003);
- pay $100,000 on commencement of commercial production to International
      American Resources Inc.; and
- grant a 3% net smelter returns royalty to the project vendor, provided that
      each 1% of the royalty could be acquired for $600,000.

In August 2002, we exercised our option with Gold-Ore to
  acquire an option to acquire a 100% interest in the San Marcial Project by:

- paying to Gold-Ore $150,000 in cash;
- issuing to Gold-Ore 45,706 common shares in our capital; and
- entering into an option agreement with the owner of the San Marcial Project
      to acquire a 100% interest in the San Marcial Project on the terms contained
      in the original option agreement between Gold-Ore and the owner of the project
      as described above.

In February 2004, we exercised our option to acquire a 100%
  interest in the San Marcial Project by making the final payment due under the
  option agreement of $387,500, for total payments of $462,500.

In March 2009, we entered into an option agreement with
  Silvermex Resources Ltd. (Silvermex), under which we granted to Silvermex an
  option to acquire a 100% interest in the San Marcial Project. Under the terms of
  the agreement, in order to maintain the option in good standing, Silvermex is
  required to:

- issue to us:
- 1,000,000 shares of Silvermex following the signing of
        the agreement (issued);
- 1,000,000 shares of Silvermex on or before February 1,
        2010 (issued); and

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---

- 1,000,000 shares of Silvermex on or before
        February 1, 2011 (not issued); and
- pay us $100,000 per month commencing 30 days after the commencement of
      commercial production; and
- incur expenditures of $1,000,000 on the project on or before February 1,
      2011.

In order to exercise the option under the terms of the option
  agreement, Silvermex must:

- pay us $15 million in cash or common shares, at our election, on or before
      February 1, 2012;
- less the value of the 3 million common shares issued to us to maintain the
      option; and
- assume the obligation to pay the $100,000 due on commencement of commercial
      production to International American Resources Inc. and the 3% net smelter
      returns royalty.

At the date of this Annual Report, we have a 100% interest in
  the San Marcial Project, subject to:

- paying $100,000 on commencement of commercial production to International
      American Resources Inc.;
- a 3% net smelter returns royalty payable to Met-Sin Industriales, S.A. de
      C.V., provided that each 1% of the royalty could be acquired for $600,000; and
- the option granted to Silvermex to acquire the property described above.

In January, 2011, Silvermex requested an extension to the
  payment of the 1,000,000 shares of Silvermex due on February 1, 2011, which were
  not issued to us. As of the date of this Annual Report, we are in discussions to
  re-negotiate certain terms related to the February 1, 2011 Silvermex share
  issuance.

Silvertip Project

In February 2010, we sold our 100% interest in the Silvertip
  Project, subject to a 5% net profits interest royalty on certain of the non-core
  claims comprised in the project, to Silvercorp Metals Inc. Under the
  Agreement:

- we received a cash payment from Silvercorp of C$7.5 million; and
- we were issued 1.2 million common shares of Silvercorp.

We no longer hold any interest in the Silvertip Project.

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Other Properties

Duthie Property

We acquired the Duthie Property in November 1978 for its then
  known silver reserve, based on the then prevailing price of silver, and
  functioning mill. The Duthie Property is located 12 kilometers west of Smithers,
  British Columbia and approximately 1.2 kilometers north of Aldrich Lake. It
  operated intermittently from 1923 to the mid-1980s. Over much of this period,
  some hand-picked direct-shipping ore was mined, especially in the early years.
  Of an estimated 80,000 tons mined, about 59,400 tons were milled. Concentrate
  shipments totalled 7,144 tons.

At the time of acquisition of the Duthie Property, we were not
  responsible for, and had no obligation in respect of, the reclamation of
  historical tailings. In the early 1990s, British Columbia adopted legislation
  which resulted in our becoming responsible for the reclamation
  of historical tailings on the Duthie Property. As a result, we submitted a
  reclamation proposal for the tailings impoundment area that contained three
  reclamation options to the Province of British Columbia in March 1994. The
  completed study, which defines the most appropriate reclamation option, was
  submitted to the Province of British Columbia in March, 1998. A reclamation
  option was accepted by the Province of British Columbia in June 1999, subject to
  possible refinements. During 2007, 2008, 2009 and 2010, we carried out
  reclamation work of $526,700, $634,200, $22,500 and $64,300, respectively. In
  2011, reclamation work will continue at an estimated cost of $87,500, subject to
  weather conditions. Remaining reclamation obligations beyond 2011 include
  constructing a wetland and monitoring the results in subsequent years. Estimated
  costs for the remaining reclamation beyond 2011 are $935,500 which includes
  $25,000 per year for 10 years ongoing monitoring.

Silver Standard Mine Property

We acquired the Silver Standard Mine Property in 1947, placed
  the mine in production in 1948 and operated the property as a mine until 1958.
  As the former mine operator, we are responsible for the reclamation of the
  property.

Our environmental consultants have studied the property and
  have prepared a conceptual reclamation plan with possible reclamation
  alternatives for the reclamation of the property. In 2006, we submitted the
  conceptual reclamation plan to the appropriate government agencies for comment.
  With the finalization of the conceptual reclamation plan, we have estimated the
  fair value of the liability associated with the reclamation of the property to
  be $2.7 million. A reclamation permit was issued by the Province of British
  Columbia in July 2010. Estimated costs for reclamation total $2.7 million with
  $520,000 estimated expenditures in 2011, including $18,000 for monitoring.

During the years 2006 to 2010, we spent $169,100 completing
  required reclamation work on the property, which involved the closure of mine
  workings and preparations for reclamation.

Others

We have a number of other property holdings in Argentina,
  Australia, Canada, Chile, Mexico and the United States, which are not considered
  our principal, secondary, tertiary or long-term properties. These property
  interests are being held for possible future exploration and development,
  reclamation work, sale, or joint venture. Interests in all of our properties are
  currently held through claims, leases and options and through working interests.
  We review such holdings on a regular basis to determine if they should be
  retained.

| | C. | Organizational Structure
| | -- | ------------------------

We have four (4) significant subsidiaries. The following table
  sets out the name, jurisdiction of incorporation and incorporation date, date of
  our acquisition and our interest in each of our significant subsidiaries:

- 33 -

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|Table No. 5                                        
|---------------------------------------------------
|Significant Subsidiaries                           
|                                                   
|                                                   
|Name of Subsidiary                                 
|                                                   
|Reliant Ventures S.A.C.                            
|                                                   
|Mina Pirquitas, Inc.                               
|                                                   
|Pacific Rim Mining Corporation
      Argentina S.A.
|                                                   
|Silver Standard Durango S.A. de C.V.               

|(1) | Pursuant to the joint venture agreement between us and
      Esperanza Resources Corp. (Esperanza), we earned a 70% interest in the
      San Luis Joint Venture by completing a feasibility study in June 2010, and
      accordingly, have earned the right to increase our ownership of the shares
      of Reliant Ventures S.A.C. to 70%. On February 28, 2011, we entered into a
      letter agreement with Esperanza to purchase Esperanzas remaining interest
      in the San Luis project. Upon completion of the transaction, we will hold
      100% of the shares of Reliant Ventures S.A.C. (see Item 4.B Business
      Overview  Mineral Projects  San Luis Project).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Formerly known as Sunshine Argentina, Inc. We acquired a
      43.4% interest on June 27, 2001 and acquired the remaining 56.6% interest
      on October 22, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| | D. | Property, Plant and Equipment
| | -- | -----------------------------

Operating Mine

Pirquitas Project

Location, Access and Infrastructure

Our 100% owned Pirquitas Project is a primary silver deposit
  situated in the Puna de Atacama of northwestern Argentina, in the Province of
  Jujuy. The project is held by our wholly-owned subsidiary, Mina Pirquitas, Inc.
  (formerly known as Sunshine Argentina, Inc.), and the project site is located
  approximately 355 kilometers northwest of the city of San Salvador de Jujuy.
  Access to the site is by public roads. The project is located in mountainous
  terrain with elevations ranging from 4,100 to 4,400 meters above mean sea level.
  There are no nearby power lines or telecommunication lines; however, a natural
  gas pipeline is located approximately 36 kilometers to the south of the project.
  See the following Pirquitas Project, Location Map.

Land Tenure

The Pirquitas Project consists of 47 mineral concessions
  covering a total of 3,841 hectares. In order to maintain our rights to these
  concessions, we are required to make canon payments to the Argentine
  government.

The Pirquitas Project also includes surface rights covering an
  area of approximately 7,498 hectares, which can be used for purposes such as
  housing, infrastructure facilities, processing plants, waste and tailing
  disposal sites, and other facilities to support mining operations.

History

Pirquitas is the largest historical producer of tin and silver
  in Argentina. The following is a chronological description of mining on the
  Pirquitas Project:

- 34 -

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1932-1935 Tin placer deposits were first discovered in the area
  in 1932. Dredging of the tin placers commenced in 1933.

1935-1990 The source of the tin placers was discovered in 1935
  and mining of the tin and silver lodes started in 1935. Twelve mines operated in
  the area and it was often found that mineralization from one mine would turn out
  to be the same zone as in another, leading to the eventual interconnecting of
  the mines. The largest mines were San Miguel, Chocaya, Llallagua, and Potosi.
  Reported total production during this time is estimated to be 777,600 kg of
  silver, 9,100 tonnes of tin from placer deposits, and 18,200 tonnes of tin mined
  from the vein systems.

1995-2003 Sunshine Argentina, Inc. (Sunshine Argentina)
  acquired the Pirquitas property in a bankruptcy auction in November 1995.
  Sunshine Argentinas exploration program included survey control, geophysical
  surveys, geological mapping, sampling, and drilling. All accessible underground
  workings were sampled and mapped. Sunshine Argentina also conducted extensive
  diamond and reverse circulation drilling from the surface and core drilling from
  underground. A feasibility study was completed for the project by Sunshine
  Argentina in 1999-2000.

2004-2005 With the acquisition of a 100% interest in the
  Pirquitas Project, we commenced updating the feasibility study completed in
  1999/2000 to take into account current economic conditions. We also commenced an
  underground ramp to (a) provide a platform area to allow underground drilling,
  if required, to better define the base of the open pit in the proposed 1999/2000
  feasibility study and (b) access the Oploca vein mineralization, which is
  located outside the proposed open pit.

2006 In 2006, we announced the completion of the update of the
  feasibility study and proven and probable reserves for the Pirquitas Project as
  described below and announced our decision to proceed with the development of
  the Pirquitas mine. We also continued with the underground ramp to, and
  accessed, the Oploca vein mineralization.

2007-2008 We completed the majority of detailed engineering
  required to construct the Pirquitas mine, and during 2008, we constructed a
  substantial portion of the Pirquitas mine. The underground ramp to the Oploca
  vein was placed on care and maintenance prior to commencing construction of the
  Pirquitas mine.

2008-2010 During this time we completed the construction of the
  Pirquitas mine at a cost of $255 million for the mine equipment and plant
  facilities plus a further $79 million for capitalized pre-production costs. The
  Pirquitas mine achieved production status in December 2009, and produced 6.3
  million ounces of silver in 2010.

- 35 -

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Geology and Mineralization

Geology in northwestern Argentina is divided into three
  subparallel north by northeasterly-oriented structural belts: the Sub-Andean
  Range, the Eastern Cordillera, and the Puna, in which Pirquitas is located.
  These belts are defined by differences in mineral deposits, tectonic activity,
  and rock types.

The Sub-Andean Range is approximately 110 kilometers wide, with
  elevations ranging from 300 to 2,500 meters. This belt is mostly void of known
  mineral deposits, and is characterized by thick sequences of sedimentary rocks
  that have large open folds. The rocks range from Proterozoic to Recent, have no
  sign of volcanic activity and very little intrusive activity.

The Eastern Cordillera is 70 to 130 kilometers wide, with
  elevations ranging from 1,300 to 6,200 meters. Mineral deposits are mostly base
  metals. This belt contains granites intruding sedimentary rocks.

- 36 -

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Regional high angle reverse faulting and associated uplift are
  present, separating it from the Sub-Andean Range to the east.

The Puna is 90 to 240 kilometers wide, with elevations ranging
  from 3,900 to 6,700 meters. Mineral deposits are dominated by base and precious
  metals but sulfur and borax deposits also exist. Proterozoic rocks are dominant
  and include interbedded sandstone and shale. Pirquitas mineralization is
  located in the latter unit.

Mineralization is controlled by the dominant structural fabric
  and, to a lesser extent, by the permeability and porosity characteristics of the
  host rocks. Silver, tin, and zinc are spatially associated in a broad sense, but
  locally, the relationship is tenuous; there are veinlets with only one, all
  three, or any combination of the three metals. There are also veinlets devoid of
  any silver, tin, and zinc.

There appear to be three principal styles of mineralization:
  low-grade disseminated/weak, discontinuous stockwork, sheeted zones of
  microveinlets, and veins/veinlets. The broad, low-grade halo of silver
  mineralization is centered on San Miguel, but in general, also encompasses the
  Potosí vein. Isolated, discontinuous zones of higher-grade micro-stockwork
  sporadically occur within this broad halo of low-grade mineralization.

The tin mineralization includes a poorly defined, broad,
  low-grade zone of mineralization with very tight, narrow zones of higher grade
  veinlets and veins, similar to the silver mineralization. In the central core of
  the deposit these higher-grade zones exhibit good continuity and correlate well
  through the deposit.

Zinc mineralization has an inverted bowl-shaped geometry with a
  weakly to unmineralized core. Higher-grade zones also seem to trend
  east-southeast, but these merge into broad zones toward the west end of San
  Miguel. These broad zones of higher-grade mineralization are open-ended.
  Underground, veinlet mineralization occurs in a similar fashion to the silver
  and tin, but high-grade zinc is not confined to the narrow veinlets.

The Pirquitas mine has a fiscal stability agreement with the
  government of Argentina dating from 1998. In 2002, the government of Argentina
  implemented an export duty on concentrates that did not apply to companies with
  pre-existing fiscal stability agreements. In December 2007 the National Customs
  Authority of Argentina levied an export duty of 10% on concentrates for projects
  with fiscal stability agreements predating 2002. We have been advised that the
  project is subject to this export duty despite our rights under our fiscal
  stability agreement from 1998. The legality of the export duty has been
  challenged and is currently under review by the court in Argentina. In July
  2010, we filed a claim in the Federal Court of Jujuy Province for the repayment
  of export duties paid to date and for an order to cease payment of the export
  duty until the matter is decided by the court. The court granted an order
  effective September 29, 2010 to cease payment of the export duty pending the
  courts determination of the legality of export duty. Up to December 31, 2010
  the Pirquitas mine has paid $6,646,000 in export taxes on concentrate sales and
  accrued for an additional $3,095,000 since we received the order to cease
  payment. The export tax expense has been recorded within cost of sales until a
  resolution is reached, if these duties are recovered in the future we will
  recognize a gain in the statement of earnings for the full amount.

Permitting

All material permits required to construct and operate the mine
  are in place.

- 37 -

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Production Status

Construction of the mine and all associated infrastructure was
  completed at the end of 2009. The mine reached production status in December
  2009, and produced 1.1 million ounces of silver during that year. In 2010, the
  mine produced 6.3 million ounces of silver, and we shipped 5.9 million ounces of
  silver. Our cash production cost per ounce of silver in 2009 and 2010 were $8.98
  and $12.16, respectively. After deductions, treatment and refining charges,
  inventory adjustments, and royalties and export taxes, total cash operating cost
  per ounce was $18.03 in 2010, compared to $16.57 in 2009 (See Item 5.B. Liquidity and Capital Resources – Non-GAAP
  Financial Performance Measures).

In the fourth quarter of 2010, the mill began processing
  continuous sulphide ore. Production in 2011 is planned to be 8.5 million ounces
  of silver.

Reserve Estimates

The following reserve estimates for the Pirquitas Project were
  prepared under the supervision of Paul MacRae, P.Eng., Project Manager of the
  Pirquitas Project, in accordance with the standards of Canadian National
  Instrument 43-101 and the definitions of the CIM Standards. Disclosure of
  contained ounces is permitted disclosure under Canadian regulations; however,
  the SEC only permits issuers to report resources as in place tonnage and grade
  without reference to unit measures. Accordingly, information concerning
  descriptions of mineralization and resources noted below may not be comparable
  to information made public by U.S. companies subject to the reporting and
  disclosure requirements of the SEC.

|Table No. 6                    
|-------------------------------
|Silver Standard Resources Inc. 
|Pirquitas Project              
|Proven and Probable Reserves(1)

|                       | Ore 
      (Million 
      tonnes) | Silver Grade 
      (g/t) | Tin Grade 
      (%) | Zinc Grade 
      (%) | Silver 
      (Oz. in millions)
|---------------------- | ---------------------------------- | ------------------------- | -------------------- | --------------------- | -------------------------------
|Proven                 | 10.7                               | 194.5                     | 0.26                 | 0.70                  | 67.1                           
|Probable               | 19.3                               | 201.7                     | 0.20                 | 0.90                  | 125.0                          
|Jig Tails(2)(Probable) | 0.4                                | 234                       | 0.37                 | 0.13                  | 3.0                            
|Total Project Reserves | 30.4                               | 199.6                     | 0.22                 | 0.82                  | 195.1                          

|(1) | Reserve estimates are based on metal prices of $11.00 per
      ounce of silver, $5.00 per pound of tin and $1.05 per pound of zinc and a
      new whittle pit using total operating costs of $22 per tonne net smelter
      returns.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The jig tails are the product of previous mining
      operations at the Pirquitas Project.                                                                                                                                            

Principal Projects

San Luis Project

Location, Access and Infrastructure

The San Luis Project in Peru is a newly discovered high-grade
  gold-silver project located in the Ancash Department of central Peru,
  approximately 25 kilometers northwest of Barrick Gold Corporations Pierina gold
  mine. We currently hold a 70% interest in the project through our joint venture
  with Esperanza. Property elevations range from 3,800 to 4,700 meters above sea
  level. The project can be accessed by two all-weather roads: to the west from Casma, Peru and to the east
  from Huaraz, Peru. Power will be conducted by on site diesel generation. See the
  following San Luis Property Location Map.

- 38 -

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Land Tenure

The San Luis Project is comprised of 40 mineral concessions
  covering an area of approximately 33,438 hectares. In order to maintain our
  rights to these concessions, we are required to pay a mining good standing fee
  in the aggregate of approximately $98,000 in respect of the concessions to the
  government of Peru.



History

The veins that form the San Luis Project were discovered in
  mid-2005 by an Esperanza field crew carrying out an evaluation program under the
  evaluation agreement between Esperanza and Silver Standard. Following the
  discovery in mid-2005, Esperanza, as the operator of the San Luis Joint Venture
  at that time, completed channel sampling of the Ayelén vein, one of the five
  veins that comprise the project. Channel samples were spaced approximately every
  82 feet (25 meters) along the strike length of the Ayelén vein. Based on the
  results of the channel samples, a diamond drill program was commenced by
  Esperanza in late 2006. Diamond drilling utilizes a type of rotary drill in
  which the cutting is done by abrasion using diamonds embedded in a matrix with
  the drill cutting a core of rock which is recovered in long cylindrical
  sections. Diamond drilling provides a greater degree of information than reverse
  circulation drilling about the geology of a potential mineral deposit. Reverse
  circulation drilling utilizes a rotary percussion drill in which the drilling
  mud and cuttings return to the surface through the drill pipe.

On April 1, 2007, we assumed the role of operator for the San
  Luis Joint Venture and continued with the diamond drill program. During 2006,
  2007 and 2008, the joint venture completed 33,600 meters of diamond drilling in
  154 holes. In 2010, we completed a feasibility study for the development of the
  San Luis Project.

Geology and Mineralization

At the San Luis Project, gold and silver veins are hosted
  within Tertiary-age volcanic rocks. Five separate veins have been identified so
  far with a cumulative strike length of over 5,000 meters. The veins range from
  several hundreds of meters to over 2,000 meters in length and up to 10 meters or
  more in width.

- 39 -

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Mineralization within the veins is typical of quartz-adularia
  or low-sulfidation epithermal systems. Vein textures such as well developed
  banding and multiple brecciation indicate that repeated episodes of gold and
  silver deposition have occurred in the veins. Early investigations at the San
  Luis Project suggest that concentrations of precious metals tend to form ore
  shoots within the veins.

Status

In June 2010, we completed a feasibility study for the
  development of the project, and in the fall of 2010, we submitted our
  environmental impact assessment to the Peruvian government. We have also
  initiated negotiations with the local communities for long-term, land use
  agreements. On approval of the environmental impact assessment and entering into
  the land use agreements, we plan on commencing underground exploration and
  development of the Ayelén vein.

On February 28, 2011, we entered into a letter agreement with
  Esperanza, our joint venture in the San Luis Project, to purchase all of
  Esperanzas remaining interest in the project. See Item 4.B  Business Overview
   Mineral Projects  San Luis Project.

Reserve Estimates

The following reserve estimates for the San Luis Project were
  prepared by Steve L. Milne, P.E. of Tucson, AZ, in a technical report dated June
  4, 2010, in accordance with the standards of Canadian National Instrument 43-101
  and the definitions of the CIM Standards. Disclosure of contained ounces is
  permitted disclosure under Canadian regulations; however, the SEC only permits
  issuers to report resources as in place tonnage and grade without reference to
  unit measures. Accordingly, information concerning descriptions of
  mineralization and resources noted below may not be comparable to information
  made public by U.S. companies subject to the reporting and disclosure
  requirements of the SEC.

|Table No. 7                    
|-------------------------------
|Silver Standard Resources Inc. 
|San Luis Project               
|Proven and Probable Reserves(1)

|                       | Ore 
      (Tonnes) | Gold Grade(g/t) | Silver Grade 
      (g/t) | Gold 
      (ounces) | Silver 
      (ounces)
|---------------------- | ------------------- | --------------- | ------------------------- | -------------------- | ----------------------
|Proven                 | 56,000              | 28.3            | 604.5                     | 51,000               | 1,088,000             
|Probable               | 447,000             | 16.7            | 426.2                     | 240,000              | 6,125,000             
|Total Project Reserves | 503,000             | 18.0            | 446.14                    | 291,000              | 7,213,000             

(1)Reserve estimates are based on metal prices of
  $800 per ounce of gold and $12.50 per ounce of silver.

Pitarrilla Project

Location, Access and Infrastructure

Our wholly-owned Pitarrilla Project is located in the northern
  part of the State of Durango, Mexico. The Pitarrilla property is easily
  accessible year-round and can be reached by traveling along all-weather roads
  either from San Francisco de Asis or the village of Casas Blancas via the town
  of town of El Palmito. The required driving time from the city of Durango is
  about 5 hours (approximately 260 km).

- 40 -

---

Being situated in a high-desert environment, the climate at
  Pitarrilla is generally an arid one. The hottest and driest months are from May
  through July, with day-time temperatures reaching 45°C. The wettest months are
  August through October, with most of the annual rainfall of some 500 mm coming
  during this period.

Supplies and resources, including fuel and groceries, are
  available in the town of Rodeo which is a two hour drive to the south. Limited
  supplies are available in San Francisco de Asis and no services are available in
  Casas Blancas. Company accommodations and warehouse are located in Casas
  Blancas. Most large items, assay laboratories and air transportation are
  available in the cities of Durango and Gomez Palico-Torreon. The power to the
  camp facilities is supplied from the existing power grid. Power to the mine is
  by diesel generation. Power alternatives for the Pitarrilla Project in
  connection with the preparation of a Feasibility Study are being evaluated. See
  the following Pitarrilla Project Location Map.

Land Tenure

The Pitarrilla Project is comprised of twelve mineral claims
  covering an area of approximately 136,192 hectares. In order to maintain our
  rights to these concessions, we are required to pay surface mining taxes to the
  Mexican government.

History

Consulting geologists P. Durning and F. Hillemeyer of La Cuesta
  International Inc. (LCI) first recognized the mineral potential at Pitarrilla in
  1995 as part of a generative gold exploration program for Monarch Resources Ltd.
  In 2002, LCI entered into an agreement with SSRI to claim what is now the core
  area of the current property. Following programs of geological mapping, rock
  sampling and reverse circulation drilling, the Company reported in October, 2003
  the discovery of the Cordon Colorado, Peña Dyke and Javelina Creek mineralized
  zones. Subsequent diamond drilling campaigns resulted in the discovery of two
  additional zones of silver mineralization, the South Ridge and Breccia Ridge
  zones. In the six years following the discovery at Cordon Colorado, the Company
  drilled 186 reverse circulation boreholes with a combined length of
  approximately 20,600 meters as well as 365 diamond drill-holes with a total
  length of approximately 185,700 meters. In addition, a decline ramp was
  developed underground during 2007 and 2008 in an effort to gain access to the
  sulphide-associated Ag-Pb-Zn mineralization of the Breccia Ridge Zone. Some
  1,350 meters of decline were excavated, but the underground development was
  halted at the end of 2008 due to the global economic crisis, with the ramp
  ending short of its target depth.

- 41 -

---



Geology and Mineralization

The Pitarrilla silver-zinc-lead deposit is characterized by
  iron oxide- and sulphide-associated mineralization, which together define a
  vertically stacked mineralized system centred on an intrusive complex of
  rhyolitic dikes and sills that constitute the feeder system for a rhyolitic
  flow-dome. These subvolcanic rocks are estimated to have formed roughly 30
  million years ago (Oigocene period) and were emplaced into a sequence of
  somewhat older (Eocene period) volcaniclastic rocks.

- 42 -

---

Hundreds of meters below
  surface, the Eocene volcaniclastic rocks are underlain by folded marine
  sedimentary strata, mainly siltstones and sandstones, that are believed to be older than
  60 million years. A conglomerate formation separates the sedimentary succession
  from the overlying younger volcanic and volcaniclastic rocks. The
  sulphide-associated Ag-Pb-Zn mineralization is rooted in the basement
  sedimentary strata and comprises a vertically extensive zone of disseminated and
  veinlet-forming Ag-Zn-Pb(-Cu-As-Sb) sulphide mineralization. In addition,
  replacement-style sulphide mineralization exists stratabound within the
  conglomerate formation. The sulphide mineralization that forms the Breccia Ridge
  Ag-Zn-Pb zone extends upwards into the overlying Eocene volcaniclastic strata
  and into Oligocene rhyolitic sills where it abruptly grades into a laterally
  more extensive zone of disseminated iron oxide-associated silver mineralization.
  The Cordon Colorado, Peña Dyke, Javelina Creek and South Ridge silver zones are
  marked by ubiquitous but minor amounts of iron and manganese oxides that are
  believed to have formed through the oxidation of disseminated sulphides. The
  main Ag-Zn-Pb mineralization event is interpreted to have occurred during or
  relatively soon after emplacement of the Oligocene rhyolitic dome.

Status

A NI 43-101 Technical Report Pitarrilla Property Prefeasibility
  Study on the Pitarrilla Property was completed by Wardrop, A Tetra Tech Company
  (Wardrop) in September, 2009. As presented in the Prefeasibility Study, the
  underground project has a 12-year mine life, mining 4,000 tonnes per day and
  producing approximately seven million ounces of silver per year. Capital costs
  are projected at $277 million with average operating costs of $33.81/tonne.
  Recoveries vary by rock type with expected weighted average recoveries of 88.4%
  for silver, 93.2% for zinc and 89.6% for lead.

Ore processing will produce two concentrates: lead and zinc.
  The lead concentrate is expected to average 60.7% lead and approximately 8,000
  g/t silver. The zinc concentrate is expected to average 48.5% zinc and
  approximately 400 g/t silver.

The Pitarrilla Project Pre-feasibility Study capital cost
  estimate (CAPEX) was developed with an accuracy of ±25% and is suitable for
  project evaluation and client budgeting. The CAPEX consists of four main parts:
  direct costs, indirect costs, contingency, and Owners costs. As of April 2009,
  the CAPEX for the Project is $277 million. The estimate is subject to
  qualifications, assumptions, and exclusions, as detailed in the Prefeasibility
  Study. The economic evaluation of the Pitarrilla Project was prepared by Wardrop
  based on a pre-tax financial model. For the 12-year mine life and 16.7 Mt
  reserve, the following pre-tax financial parameters were calculated: 10.9%
  internal rate of return (IRR); 6.2 years payback on $277 million capital; $107.4
  million net present value (NPV) at a 5% discount rate. The base case prices
  supplied by the Company were as follows: silver  $11.00/oz, zinc  $0.70/lb,
  lead  $0.50/oz. Sensitivity analyses were carried out to evaluate the project
  economics for 2-year, 5-year, and current metal prices. The financial outcomes
  for four metal price scenarios were tabulated for NPV, IRR and payback of
  capital. Discount rates of 10%, 8%, and 5% were applied to all cases identified
  by the following metal price scenarios: base case, 2-year average, 5-year
  average, and current prices. The five year average prices for silver, zinc, and
  lead were $11.16/oz, $0.99/lb and $0.72/lb, respectively. The two year average
  prices for silver, zinc, and lead were $14.06/oz, $1.01/lb and $1.02/lb,
  respectively, and the spot prices at the time of the study for silver, zinc, and
  lead were $14.02/oz, $0.71/lb and $0.77/lb, respectively, The results are
  presented below:

- 43 -

---

Summary of Pre-tax NPV, IRR and Payback by Metal Price
  Scenario

|                            |                                     
|--------------------------- | ------------------------------------
|                            | NPV at Selected Discount
      Rates
|                            | (Million C$)                        
|                            |                                     
|Scenario                    | 10%                                 
|5-year Average              | 163.6                               
|Silver Standard (Base Case) | 12.8                                
|2-year Average              | 317.9                               
|Spot                        | 168.7                               

Wardrop adopted metal prices supplied by Silver Standard for
  the base case. The 3-year average approach was not used as the Company felt its
  Base Case was an appropriate measure. The prices provided are lower than the
  historical 3-year average metal prices.

Sensitivity analyses were carried out on the following
  parameters: silver prices, lead prices, zinc prices, initial capital
  expenditure, mine site operating costs. The project NPV (5% discount) is most
  sensitive to the silver price and, in decreasing order: zinc prices, capital
  cost, operating costs, and lead price.

A Feasibility Study to further evaluate the project economics
  of developing the Breccia Ridge Zone using underground mining methods has been
  initiated.

Reserve and Resource Estimates  Breccia Ridge Underground

Wardrop of Vancouver, British Columbia completed the following
  mineral reserve estimate for the Pitarrilla Project Breccia Ridge Underground
  Zone in accordance with the standards of Canadian National Instrument 43-101 and
  the definitions of the CIM Standards dated September 21, 2009. The entire
  reserve is categorized as Probable.

|Table No. 8                      
|---------------------------------
|Silver Standard Resources Inc.   
|Pitarrilla Project               
|Breccia Ridge Underground        
|Probable Mineral Reserve Estimate
|(Cutoff Grade(1))                

|Classification | Tonnes (in millions) | Ag (g/t) | Zn (%) | Pb (%) | Silver (million oz)
|-------------- | -------------------- | -------- | ------ | ------ | -------------------
|Probable       | 16.7                 | 171      | 2.57   | 1.12   | 91.7               

(1) A Net Smelter Return (NSR) cutoff
  grade of $50/tonne was used to estimate the mineral reserve. The project was
  evaluated using metal prices of $11/oz silver, $0.70/lb Zn, and $0.50/lb Pb with
  recoveries varying by rock type.

P&E Mining Consultants Inc. of Brampton, Ontario completed
  the following resource estimates for the Pitarrilla Project in accordance with
  the standards of Canadian National Instrument 43-101 and the definitions of the
  CIM Standards dated August 3, 2008. Disclosure of contained ounces is
  permitted disclosure under Canadian regulations; however, the SEC only permits
  issuers to report resources as in place tonnage and grade without reference to
  unit measures. Accordingly, information concerning descriptions of mineralization and resources noted below may
  not be comparable to information made public by U.S. companies subject to the
  reporting and disclosure requirements of the SEC.

- 44 -

---

|Cautionary Note to U.S. Investors concerning estimates
      of Measured Mineral Resources.                                                                                                                                                                                                                                                                                
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                           
|Table No. 9 below uses the term Measured Mineral
      Resource. We advise U.S. investors that while such term is recognized and
      required under Canadian regulations, the SEC does not recognize it. U.S. investors are cautioned not to assume that any part or all of
        the mineral deposits in this category will ever be converted into
        reserves.

|Table No. 9                       
|----------------------------------
|Silver Standard Resources Inc.    
|Pitarrilla Project                
|Breccia Ridge Underground         
|Measured Mineral Resource Estimate
|(Cutoff Grade(1))                 

|Classification | Tonnes (in millions) | Silver Grade (g/t) | Zinc (%) | Lead (%) | Silver (million oz)
|-------------- | -------------------- | ------------------ | -------- | -------- | -------------------
|Measured       | 18.5                 | 91.6               | 1.24     | 0.70     | 54.5               

|(1) The above block model resource estimate is based on a
      cut-off grade of 65 grams of silver-equivalent per tonne for underground
      resources. Silver-equivalent grades were calculated using $11/oz silver,
      $1.05/lb zinc, $0.75/lb lead and $2.00/lb copper.                                                                                              
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                             
|Cautionary Note to U.S. Investors concerning estimates
      of Indicated Mineral Resources.                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                             
|Table No. 10 below uses the term Indicated Mineral
      Resource. We advise U.S. investors that while such term is recognized and
      required under Canadian regulations, the SEC does not recognize it. U.S. investors are cautioned not to assume that any part or all of
        the mineral deposits in this category will ever be converted into
        reserves.

|Table No. 10                       
|-----------------------------------
|Silver Standard Resources Inc.     
|Pitarrilla Project                 
|Breccia Ridge Underground          
|Indicated Mineral Resource Estimate
|(Cutoff Grade(1))                  

|Classification | Tonnes (in millions) | Silver Grade (g/t) | Zinc (%) | Lead (%) | Silver (million oz)
|-------------- | -------------------- | ------------------ | -------- | -------- | -------------------
|Indicated      | 48.5                 | 89.2               | 1.68     | 0.66     | 139.1              

|(1) A cut-off grade of 65 grams of silver-equivalent per
      tonne for underground resources for Breccia Ridge Silver-equivalent grades
      were calculated using $11/oz silver, $1.05/lb lead and $2/lb Copper.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Cautionary Note to U.S. Investors concerning estimates
      of Inferred Mineral Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Table No. 11 below uses the term Inferred Mineral
      Resources. We advise U.S. investors that while such term is recognized
      and required under Canadian regulations, the SEC does not
      recognize it. Inferred Mineral Resources have a great
      amount of uncertainty as to their existence, and great uncertainty as to
      their economic and legal feasibility. It cannot be assumed that all or any
      part of an Inferred Mineral Resource will ever be upgraded to a higher
      category. Under Canadian rules, estimates of Inferred Mineral Resources
      may not form the basis of feasibility or other economic studies. U.S.
        investors are cautioned not to assume that any part or all of an
        Inferred Mineral Resource exists, or is economically or legally mineable.

- 45 -

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|Table No. 11                      
|----------------------------------
|Silver Standard Resources Inc.    
|Pitarrilla Project                
|Breccia Ridge Underground         
|Inferred Mineral Resource Estimate
|(Cutoff Grade(1))                 

|Classification | Tonnes (in millions) | Silver Grade (g/t) | Zinc (%) | Lead (%) | Silver (million oz)
|-------------- | -------------------- | ------------------ | -------- | -------- | -------------------
|Inferred       | 19.3                 | 51.3               | 1.12     | 0.54     | 31.8               

|(1) | A cut-off grade of 65 grams of silver-equivalent per
      tonne for underground resources for Breccia Ridge Silver-equivalent grades
      were calculated using $11/oz silver, $1.05/lb lead and $2/lb
      Copper.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Resource Estimates  Open Pit and Other Zones

Open Pit

While the Companys primary focus remains completing a
  feasibility study for the Breccia Ridge Underground, additional testwork will be
  required to advance the open pit oxide deposits. A preliminary economic
  assessment on the open-pit, oxide material (PEA) may be completed in the
  future.

|Cautionary Note to U.S. Investors concerning estimates
      of Indicated Mineral Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Table No. 12 below uses the term Indicated Mineral
      Resource. We advise U.S. investors that while such term is recognized and
      required under Canadian regulations, the SEC does not recognize it. U.S. investors are cautioned not to assume that any part or all of
        the mineral deposits in this category will ever be converted into
        reserves.                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Cautionary Note to U.S. Investors concerning estimates
      of Inferred Mineral Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Table No.12 below uses the term Inferred Mineral
      Resources. We advise U.S. investors that while such term is recognized
      and required under Canadian regulations, the SEC does not recognize it.
      Inferred Mineral Resources have a great amount of uncertainty as to
      their existence, and great uncertainty as to their economic and legal
      feasibility. It cannot be assumed that all or any part of an Inferred
      Mineral Resource will ever be upgraded to a higher category. Under
      Canadian rules, estimates of Inferred Mineral Resources may not form the
      basis of feasibility or other economic studies. U.S. investors are
        cautioned not to assume that any part or all of an Inferred Mineral
        Resource exists, or is economically or legally mineable.

- 46 -

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|Table No. 12                                               
|-----------------------------------------------------------
|Silver Standard Resources Inc.                             
|Pitarrilla Project                                         
|Breccia Ridge Open Pit Resource Summary                    
|Indicated and Inferred Mineral Resource Estimate           
|(Cutoff Grade(1))                                          
|                                                           
|Breccia Ridge Open Pit Resource Summary  August
      2008

|Classification | Tonnes (in millions) | Silver (g/t) | Zinc (%) | Lead (%) | Silver (million oz)
|-------------- | -------------------- | ------------ | -------- | -------- | -------------------
|Indicated      | 105.6                | 63.6         | 0.68     | 0.31     | 215.8              
|Inferred       | 5.5                  | 72.5         | 0.67     | 0.24     | 12.9               

|(1)The above block model resource
      estimate is contained in is based on a cut-off grade of 20 grams of
      silver- equivalent per tonne for underground resources. Silver-equivalent
      grades were calculated using $11/oz silver, $1.05/lb zinc, $0.75/lb lead
      and $2.00/lb copper.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In addition to Breccia Ridge, engineering and testwork
  continues on the four other surface zones: Pena Dike, Cordon Colorado, Javelina
  Creek and South Ridge. These four zones contain approximately one-third of total
  Pitarrilla resources and will complement the contemplated underground and
  open-pit scenarios of Breccia Ridge. The Other Surface Zones mineral resource
  estimate was prepared by James A. McCrea in a report dated May, 2007.

|Cautionary Note to U.S. Investors concerning estimates
      of Measured Mineral Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Table No. 13 below uses the term Measured Mineral
      Resource. We advise U.S. investors that while such term is recognized and
      required under Canadian regulations, the SEC does not recognize it. U.S. investors are cautioned not to assume that any part or all of
        the mineral deposits in this category will ever be converted into
        reserves.                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Cautionary Note to U.S. Investors concerning estimates
      of Indicated Mineral Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Table No. 13 below uses the term Indicated Mineral
      Resource. We advise U.S. investors that while such term is recognized and
      required under Canadian regulations, the SEC does not recognize it. U.S. investors are cautioned not to assume that any part or all of
        the mineral deposits in this category will ever be converted into
        reserves.                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Cautionary Note to U.S. Investors concerning estimates
      of Inferred Mineral Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Table No.13 below uses the term Inferred Mineral
      Resources. We advise U.S. investors that while such term is recognized
      and required under Canadian regulations, the SEC does not recognize it.
      Inferred Mineral Resources have a great amount of uncertainty as to
      their existence, and great uncertainty as to their economic and legal
      feasibility. It cannot be assumed that all or any part of an Inferred
      Mineral Resource will ever be upgraded to a higher category. Under
      Canadian rules, estimates of Inferred Mineral Resources may not form the
      basis of feasibility or other economic studies. U.S. investors are
        cautioned not to assume that any part or all of an Inferred Mineral
        Resource exists, or is economically or legally mineable.

- 47 -

---

|Table No. 13                                                    
|----------------------------------------------------------------
|Silver Standard Resources Inc.                                  
|Pitarrilla Project                                              
|Other Surface Zones Resource Summary                            
|Measured, Indicated and Inferred Mineral Resource
      Estimate
|(Cutoff Grade(1))                                               
|                                                                
|Other Surface Zones Resource Summary  May 2007                 

|Classification | Tonnes (millions) | Silver (g/t) | Silver (million oz)
|-------------- | ----------------- | ------------ | -------------------
|Measured       | 27.2              | 120.6        | 105.4              
|Indicated      | 35.6              | 112.5        | 128.7              
|Inferred       | 11.3              | 103.1        | 37.5               

|(1) | The above block model resource estimate is contained in
      the Technical Report on the La Pitarrilla Property prepared by James A.
      McCrea, P. Geo. and filed on www.sedar.comon May 25, 2007.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Diablillos Project

Location, Access and Infrastructure

Our wholly-owned Diablillos Project covers an area of 4,500 ha
  and is located in the Altiplano of northern Argentina about 160 kilometers
  southwest of the city of Salta, in the Province of Salta. The property is road
  accessible from Salta, with the drive requiring about 6 hours. The geographic
  coordinates at the centre of the property are 25°18' South latitude by 66°50'
  West longitude. Refer to the following Diablillos Project Location Map.

Land Tenure

The project consists of eight mining leases or minas totaling
  4,500 hectares, and 2 cateos of 5,567 hectares, and is accessible by gravel
  road. In order to maintain our rights to these concessions, we are required to
  make canon payments to the Argentine government.

History

Discovered in the 1970s, the property was primarily explored
  from 1988 to 2001. Much of the recent work on the Oculto deposit at the
  Diablillos Project was complete d by Barrick Gold Corporation (Barrick) in
  1999 and 2000. The Oculto deposit was initially defined by 17 diamond drill
  holes totalling 3,010 meters and 79 reverse circulation holes totalling 19,114
  meters. Barrick drilled altogether 24 diamond drill holes and 150 reverse
  circulation holes. In 2003, we drilled 20 holes totaling 3,046 meters, chiefly
  to test geophysical anomalies outside of the Oculto deposit and to test for
  continuity of several high grade trends within the zone. The peripheral drilling
  intersected several areas with anomalous values. The drilling within the zone
  confirmed continuity of the target mineral trends. During 2006, a geological
  review of the project in preparation for an update of the Barrick
  pre-feasibility study determined that the previous reverse circulation drilling
  may have understated the gold and silver values. As a result, an approximately
  17,600 meter diamond drilling program in 107 drill holes was completed in 2007
  and 2008. The drill program was designed to investigate whether drill results
  obtained by the previous drilling campaigns understated values and also to test
  a number of gold targets separate from the Oculto Zone where a re-interpretation
  of the geology indicates potential for the discovery of new gold zones.

- 48 -

---

Geology and Mineralization

The gold and silver deposit at the Diablillos Project is
  interpreted to be an example of the high-sulphidation subgroup of the epithermal
  class of precious metal deposits. The mineralization is predominantly hosted by
  volcanic tuffs, breccias and minor flows that have been intensely leached by
  acidic fluids which rendered these rocks to be highly porous. The acidic fluids
  that strongly altered the mineralized rocks are believed to have formed by two
  processes, in part by magmatic vapors reacting with meteoric waters during the
  primary mineralizing event, and then later by the near-surface oxidation of
  sulphide mineral grains had been deposited from the deposit-forming hydrothermal
  fluids. Directly below the sequence of volcanic rocks is a basal conglomerate
  formation that is contains pebbles and cobbles of older, underlying rocks,
  including Paleozoic granite and metamorphosed sedimentary rocks. The
  conglomerate is a particularly important host to the precious metal
  mineralization, especially zones with higher concentrations of gold, Two main
  sets of faults have affected the rocks at Diablillos; ENE-WSW trending
  structures appear to have been important conduits that channeled the
  hydrothermal fluids which deposited gold and silver, whereas N-S fault
  structures are interpreted to be younger than the ENE-WSW faults and define a
  downward-displaced structural block that includes the Oculto deposit.

The bulk of the Oculto gold-silver deposit is hosted by
  oxidized rocks containing abundant hematite, limonite and jarosite. Gold
  generally occurs as fine grains of native gold and electrum, while silver is
  found as fine grains of acanthite (silver sulphide), chlorargyrite (silver
  halide), matildite (Ag-Bi sulphide) as well as in electrum. Owing to the
  relatively high grades of gold and silver in the Oculto mineralization and the
  less than ideal recoveries of these metals by heap-leach processing methods, the
  Oculto deposit is being considered for a conventional milling and cyanide
  treatment operation.



- 49 -

---

Status

We initiated a Preliminary Economic Assessment for the
  Diablillos Project in 2010 to evaluate the potential for placing the project in
  production. The results of the PEA are expected to be published in the first
  half of 2010.

Resource Estimate

As of the date of this report, the Diablillos Project is
  without known Mineral Reserves, and any activity carried out on the property is
  exploratory in nature.

Wardrop Engineering Inc. of Vancouver, British Columbia
  completed the following resource estimate for the Oculto deposit within the
  Diablillos Project in accordance with the standards of Canadian National
  Instrument 43-101 and the definitions of the CIM Standards, in a report dated
  July 27, 2009. The resource was evaluated using a Recovered Metal Value (RMV)
  cutoff grade of $10/tonne. The RMV was based on metal values of $11/oz Ag and
  $700/oz Au, and applied recoveries of 65% for gold and 40% for silver.
  Disclosure of contained ounces is permitted disclosure under Canadian
  regulations; however, the SEC only permits issuers to report resources as in
  place tonnage and grade without reference to unit measures. Accordingly,
  information concerning descriptions of mineralization and resources noted below
  may not be comparable to information made public by U.S. companies subject to
  the reporting and disclosure requirements of the SEC.

|Cautionary Note to U.S. Investors concerning estimates
      of Indicated Mineral Resources.                                                                                                                                                                                                                                                                                  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                              
|Table No. 14 below uses the term Indicated Mineral
      Resources. We advise U.S. investors that while such term is recognized
      and required under Canadian regulations, the SEC does not recognize it. U.S. investors are cautioned not to assume that any part or all of
        the mineral deposits in this category will ever be converted into
        reserves.

|Table No. 14                       
|-----------------------------------
|Silver Standard Resources Inc.     
|Diablillos Project                 
|Indicated Mineral Resource Estimate
|($10 RMV Cutoff Grade(1))          

|Category  | Tonnes (millions) | Gold (g/t) | Silver (g/t) | Gold (oz) | Silver (oz in millions)
|--------- | ----------------- | ---------- | ------------ | --------- | -----------------------
|Indicated | 21.6              | 0.922      | 111          | 640,000   | 77.1                   

|(1) | The cut-off grade is based on $10.00 recovered metal
      values (RMV) and the following metal prices and recoveries: gold ($700/oz,
      65%); and silver ($11.00/oz., 40%).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Cautionary Note to U.S. Investors concerning estimates
      of Inferred Mineral Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Table No. 15 below uses the term Inferred Mineral
      Resources. We advise U.S. investors that while such term is recognized
      and required under Canadian regulations, the SEC does not recognize it.
      Inferred Mineral Resources have a great amount of uncertainty as to
      their existence, and great uncertainty as to their economic and legal
      feasibility. It cannot be assumed that all or any part of an Inferred
      Mineral Resource will ever be upgraded to a higher category. Under
      Canadian rules, estimates of Inferred Mineral Resources may not form the
      basis of feasibility or other economic studies. U.S. investors are
        cautioned not to assume that any part or all of an Inferred Mineral Resource
        exists, or is economically or legally mineable.

- 50 -

---

|Table No. 15                      
|----------------------------------
|Silver Standard Resources Inc.    
|Diablillos Project                
|Inferred Mineral Resource Estimate
|(US $10 RMV Cutoff
      Grade(1))

|Category | Tonnes (millions) | Gold (g/t) | Silver (g/t) | Gold (oz) | Silver (oz in millions)
|-------- | ----------------- | ---------- | ------------ | --------- | -----------------------
|Inferred | 7.2               | 0.807      | 27           | 187,000   | 6.3                    

|(1) | The cut-off grade is based on $10.00 recovered metal
      values (RMV) and the following metal prices and recoveries: gold ($700/oz,
      65%); and silver ($11.00/oz., 40%).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

San Agustin Project

The San Agustin Project comprises two mineral claims covering
  an area of approximately 575 hectares and is located approximately 4 kilometers
  north of the village of San Agustin de Ocampo and approximately 100 kilometers
  north of the city of Durango in the State of Durango, Mexico. The Company does
  not hold the surface rights to the property. Infrastructure is located nearby
  and paved Highway 45 passes 10 kilometers east of the property (refer to the San
  Agustin Location Map, shown below). In order to maintain our rights to these
  concessions, we are required to pay mineral license taxes to the Mexican
  government.



The local geology at San Agustin is dominated by a subvolcanic
  intrusive complex that was emplaced into a folded and faulted sequence of thinly
  bedded, fine-grained clastic sedimentary rocks that are believed to be more than
  30 million years older than the intrusive rocks. The emplacement of the dacite
  porphyry intrusive rocks apparently resulted in the dense fracturing and local
  brecciation of the sedimentary rocks over a broad area, which facilitated the
  migration of metal-bearing hydrothermal fluids outwards from the intrusive stock
  into the enclosing sedimentary rocks. These fluids deposited pyrite and lesser
  amounts of sphalerite as disseminated grains and stringer veinlets in both the
  intrusive rocks and the fine-grained sedimentary rocks. In subsurface rocks that
  have not been oxidized, gold generally occurs as minute granules within pyrite grains, while silver is more associated
  with zinc and lead sulphides. Within 30 meters of surface, most of the rocks
  have been oxidized, with sulphides being converted to iron oxide minerals. In
  terms of gold recovery, the oxidized mineralization is more favourable than the
  sulphide-associated mineralization, especially considering the low-grade nature
  of the pyritic gold mineralization.

- 51 -

---

Prior to our acquiring the property, exploration activities
  that were done on the property in the 1990s consisted of geological mapping,
  soil sampling and the drilling of 69 reverse circulation boreholes totaling
  10,400 meters which outlined the first gold-silver resource at San Agustin. In
  early 2004, we completed a reverse circulation drilling program, which totaled
  3,890 meters in 24 holes. The assay results of this program, along with the
  earlier drill holes, were used to calculate a preliminary gold resource.

In 2006, Geologix Exploration (Geologix) entered into an
  option to acquire agreement with us for the San Agustin property. In the
  following two years, Geologix completed a 175-hole, 40,700 meter diamond
  drilling program in accordance with the terms of the option agreement (see Item
  4.B - Business Overview  Mineral Properties  San Agustin Project). At the
  end of 2008, a mineral resource estimate was completed by Wardrop, a Tetra Tech
  Company. Two months later, in early 2009, Geologix was unable to meet its option
  payment obligations as defined by the agreement due to the global financial
  crisis that was taking place at that time, and as a consequence, the option was
  terminated. In 2010, we decided to resume our own exploration of the property,
  completing a program of multi-method geophysical surveying together with some
  re-logging of drill cores for a re-interpretation of the geological controls on
  the mineralization that constitutes the gold-silver(-zinc) deposit. Plans are to
  return to the project in 2011 and carry out another drilling to expand the known
  resources and to test some of the geophysical anomalies that were outlined by
  the surveying done in 2010.

As of the date of this report, the San Agustin Project is
  without known Mineral Reserves, and any activity carried out on the property is
  exploratory in nature.

Wardrop, A Tetra Tech Company of Vancouver, British Columbia
  completed the following mineral resource estimate for the San Agustin Project,
  in accordance with the standards of Canadian National Instrument 43-101 and the
  definitions of the CIM Standards, in a report dated March, 2009.

|Cautionary Note to U.S. Investors concerning estimates
      of Indicated Mineral Resources.                                                                                                                                                                                                                                                                                 
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                             
|Table No. 16 below uses the term Indicated Mineral
      Resource. We advise U.S. investors that while such term is recognized and
      required under Canadian regulations, the SEC does not recognize it. U.S. investors are cautioned not to assume that any part or all of
        the mineral deposits in this category will ever be converted into
        reserves.

|Table No. 16                                                                  
|------------------------------------------------------------------------------
|Silver Standard Resources Inc.                                                
|San Agustin Project                                                           
|Indicated Mineral Resource Estimate                                           
|($3.40 RMV in oxide and $6.25 RMV in sulphide material
      cut-off grade)(1)

|Category  | Tonnes (millions) | Gold Grade (g/t) | Silver Grade (g/t) | Zinc (%) | Lead (%)
|--------- | ----------------- | ---------------- | ------------------ | -------- | --------
|Indicated | 121.0             | 0.41             | 12.3               | 0.49     | 0.06    

|(1) | The cut-off grade is based on $3.40 recovered metal
      values (RMV) in oxide material and $6.25 (RMV) in sulphide material and
      the following metal prices and recoveries: gold ($631.97/oz, 72%); silver
      ($11.63, 74%); zinc ($1.11/lb., 50%); and lead $0.78/lb.;
      62%).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

- 52 -

---

|Cautionary Note to U.S. Investors concerning estimates
      of Inferred Mineral Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Table No. 17 below uses the term Inferred Mineral
      Resources. We advise U.S. investors that while such term is recognized
      and required under Canadian regulations, the SEC does not recognize it.
      Inferred Mineral Resources have a great amount of uncertainty as to
      their existence, and great uncertainty as to their economic and legal
      feasibility. It cannot be assumed that all or any part of an Inferred
      Mineral Resource will ever be upgraded to a higher category. Under
      Canadian rules, estimates of Inferred Mineral Resources may not form the
      basis of feasibility or other economic studies. U.S. investors are
        cautioned not to assume that any part or all of an Inferred Mineral
        Resource exists, or is economically or legally mineable.

|Table No. 17                                                                  
|------------------------------------------------------------------------------
|Silver Standard Resources Inc.                                                
|San Agustin Project                                                           
|Inferred Mineral Resource Estimate                                            
|($3.40 RMV in oxide and $6.25 RMV in sulphide material
      cut-off grade)(1)

|Category | Tonnes (millions) | Gold Grade (g/t) | Silver Grade (g/t) | Zinc (%) | Lead (%)
|-------- | ----------------- | ---------------- | ------------------ | -------- | --------
|Inferred | 91.2              | 0.36             | 12.6               | 0.48     | 0.07    

|(1) | The cut-off grade is based on $3.40 recovered metal
      values (RMV) in oxide material and $6.25 (RMV) in sulphide material and
      the following metal prices and recoveries: gold ($631.97/oz, 72%); silver
      ($11.63, 74%); zinc ($1.11/lb., 50%); and lead $0.78/lb.; 62%).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Snowfield Project

The Snowfield Project is located 65 kilometers north-northwest
  of Stewart, British Columbia along the eastern limit of the Coast Mountain
  Range. The simplest access to the project is via Stewart or Bell II, British
  Columbia by helicopter. The trip is approximately 30 minutes from Stewart and
  slightly less from Bell II by helicopter, but Stewart has an established
  year-round helicopter base. Heavy equipment, fuel and camp provisions can be
  driven along a gravel road in good condition to the Granduc staging site
  (north-northwest of Stewart) and then flown to Snowfield cutting the helicopter
  flight time from Stewart in half. See the following Snowfield Project Location
  Map. The project is adjacent to Seabridge Gold Inc.s Mitchell Deposit. All
  essential services are available in Stewart, British Columbia, approximately 70
  kilometres to the south. The town supplies most of the commonly needed materials
  and services for local camps. The towns of Terrace and Smithers are also located
  in the same general region as the Snowfield Project. Both are directly
  accessible by daily air service from Vancouver.

The project consists of one mineral claim totaling 1,267.4
  hectares 4.89 square miles) and two overlapping placer claims. The mineral
  claims are in good standing until 2021 and, thereafter, can be maintained in
  good standing by carrying out additional work on the property or paying a fee to
  the Government of British Columbia.

During the year, we completed a 17,976-meter diamond drilling
  program at Snowfield, which was successful in expanding known mineralization to
  the south and southeast in an area of copper-dominant mineralization (see August
  26, September 30 and October 14, 2010 new releases for details). Most of the
  newly defined mineralization was in areas previously classified as waste in the
  National Instrument 43-101 compliant Preliminary Assessment completed during the
  quarter and issued on September 13, 2010. The report, which did not include
  results from the 2010 drilling program, examined the benefits of a project
  combining the mineral resource from both Snowfield and the adjacent Brucejack
  property.

- 53 -

---

On December 21, 2010, we sold our 100% interest in the
  Snowfield project (along with the Brucejack project) to Pretium Resources Inc.
  for aggregate consideration of $442.3 million (C$450.0 million). See 4B 
  Business Overview  Mineral Projects  Snowfield Project and Brucejack
  Project.

Brucejack Project

The Brucejack Project is located 65 kilometers north-northwest
  of Stewart, British Columbia along the eastern limit of the Coast Mountain
  Range. The simplest access to the project is via Stewart or Bell II, British
  Columbia by helicopter, with the flight requiring about 30 minutes. The
  helicopter airport in Stewart is operational year-round. Heavy equipment, fuel
  and camp provisions can be driven from Stewart along a seasonal gravel road to
  the site of the former mill and airstrip of the Granduc mine, a drive that
  requires about 90 minutes, where they can be loaded onto a helicopter and then
  flown into the Brucejack Lake field camp. See the following Brucejack Project
  Location Map.

The Brucejack Property consists of six mineral claims totaling
  3,199.28 hectares in area and one overlapping placer claim. All mineral claims
  are in good standing until January 31, 2019. Claim ownership is registered to
  0777666 B.C. Ltd., a wholly owned subsidiary of Silver Standard. The six mineral
  claims were converted from 28 older legacy claims to B.Cs Mineral Titles Branch
  new Mineral Titles Online system in 2005.

During the year we completed a 33,100-meter diamond drilling
  program that tested a number of gold zones on the property. This drilling
  campaign was successful in expanding the Bridge Zone, which is host to
  gold-silver porphyry-style mineralization, as well as expanding the high-grade
  Galena Hill and West Zones where high-grade gold and silver were first
  identified in the 2009 drill program.

On December 21, 2010, we sold our 100% interest in the
  Brucejack project (along with the Snowfield project) to Pretium Resources Inc.
  for aggregate consideration of $442.3 million (C$450.0 million). See 4B 
  Business Overview  Mineral Projects  Snowfield Project and Brucejack
  Project.

Mineral Properties

Berenguela Project

The Berenguela silver-copper-manganese project is located in
  the Altiplano of southern Peru about 5 kilometers northeast of the town of Santa
  Lucia in the Province of Puno (refer to the Berenguela Project Location Map,
  shown below).

The property comprises 13 mineral concessions covering an area
  of approximately 6,218 hectares. The project can be accessed from the small city
  of Juliaca by following a paved highway for about 65 kilometers to Santa Lucía
  from where a gravel road leads to the central part of the property. Electrical
  power is readily available and a main-line railway passes within five kilometers
  of the project.

- 54 -

---



The silver-copper-manganese deposit at the center of the
  Berenguela Project is hosted by a strongly folded sequence of marine sedimentary
  rocks consisting of interbedded units of limestone, dolomite, marl (impure
  carbonate), sandstone and minor shale. A formation rich in gypsum, probably an
  evaporite, occurs in the lower part of the succession which is believed to have
  been deposited roughly 100 million years ago. Mineralization consists of massive
  replacement of limestone, dolomite and to a lesser extent marl beds by manganese
  oxide minerals which contain variable amounts of silver and copper. How silver
  and copper actually occur in the mineralization is not well understood, but
  mineral phases of silver and copper are rarely observed with the naked eye.
  Overall, the deposit consists of a few lenticular bodies of replacement
  mineralization that are grossly conformable with, and occur within 100 meters of
  the surface which lies at about 4,200 m.a.s.l. The deposit was mined
  intermittently between 1905 and 1965 by the Lampa Mining Company, principally
  for silver. In the 1960s, Charter Consolidated Mining Co. and then Asarco Inc.
  assessed the mining potential of the Berenguela deposit. The two companies
  completed a total of 6,600 meters of diamond drilling and channel-sampled
  underground workings at 1.5 -meter intervals for a total of 5,108 meters. In
  1968, Charter Consolidated developed an open-pit plan, and calculated a mineable
  ore reserve for the project. Since the closure of the mine in 1965, no
  significant amount of ore has been recovered from the project. The ore reserve
  calculated by Charter Consolidated does not comply with Canadian National
  Instrument 43-101 and CIM Standards; under these mining industry guidelines,
  Charter Consolidateds mineable reserve would be classified as a mineral
  resource only.

In the late 1960s, the Peruvian Government nationalized the
  Berenguela Project. SOMINBESA acquired the project from Minero Peru (a state
  owned mining company) in 1995 and completed engineering studies for the
  development of the project. Under our option agreement, we agreed to undertake
  additional drilling and prepare a resource estimate for the project in
  accordance with Canadian National Instrument 43-101 and the CIM Standards.

From late 2004 through mid-2005, we completed a reverse
  circulation drill program that totaled 19,029 meters in 222 holes. The program
  objectives were: (1) to twin historic, relatively wide-spaced drill-holes to
  verify the grade of mineralization, and (2) to complete sufficient in-fill
  drilling in two areas of deposit to determine the scope of future drilling
  requirements for a measured, indicated and inferred resource. In 2010, we
  undertook a broader assessment of the mineral potential of the property by
  completing a comprehensive program of geophysical surveying, a soil geochemistry
  survey and campaign of diamond drilling. The drilling program consisted of 16
  boreholes, with a total of 5,546 meters being drilled. Only three of 2010 drill-holes tested the area of the known Ag-Cu-Mn
  deposit, with the remaining holes probing geophysical anomalies that were
  outlined to the east, west and south of the deposit.

- 55 -

---

Resource Estimates

As of the date of this report, the Berenguela Project is
  without known Mineral Reserves, and any activity carried out on the property is
  exploratory in nature.

James A. McCrea, P. Geo., of Surrey, British Columbia completed
  the following resource estimate for the Berenguela Project, in accordance with
  the standards of Canadian National Instrument 43-101 and the definitions of the
  CIM Standards, in a report dated October 26, 2005.

|Cautionary Note to U.S. Investors concerning estimates
      of Indicated Mineral Resources.                                                                                                                                                                                                                                                                                 
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                             
|Table No. 18 below uses the term Indicated Mineral
      Resource. We advise U.S. investors that while such term is recognized and
      required under Canadian regulations, the SEC does not recognize it. U.S. investors are cautioned not to assume that any part or all of
        the mineral deposits in this category will ever be converted into
        reserves.

|Table No. 18                         
|-------------------------------------
|Silver Standard Resources Inc.       
|Berenguela Project                   
|Indicated Mineral Resource Estimate  
|(50 g/t Silver Cutoff Grade  capped)

|Classification | Tonnes (millions) | Silver Grade (g/t) | Copper (%)
|-------------- | ----------------- | ------------------ | ----------
|Indicated      | 15.6              | 132.0              | 0.924     

|Cautionary Note to U.S. Investors concerning estimates
      of Inferred Mineral Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Table No. 19 below uses the term Inferred Mineral
      Resources. We advise U.S. investors that while such term is recognized
      and required under Canadian regulations, the SEC does not recognize it.
      Inferred Mineral Resources have a great amount of uncertainty as to
      their existence, and great uncertainty as to their economic and legal
      feasibility. It cannot be assumed that all or any part of an Inferred
      Mineral Resource will ever be upgraded to a higher category. Under
      Canadian rules, estimates of Inferred Mineral Resources may not form the
      basis of feasibility or other economic studies. U.S. investors are
        cautioned not to assume that any part or all of an Inferred Mineral
        Resource exists, or is economically or legally mineable.

|Table No. 19                         
|-------------------------------------
|Silver Standard Resources Inc.       
|Berenguela Project                   
|Inferred Mineral Resource Estimate   
|(50 g/t Silver Cutoff Grade  capped)

|Classification | Tonnes (millions) | Silver Grade (g/t) | Copper (%)
|-------------- | ----------------- | ------------------ | ----------
|Inferred       | 6.0               | 111.7              | 0.74      

- 56 -

---

Nazas Project

The property that constitutes the Nazas Project consists of 31
  contiguous mineral concessions located in north-central Durango State, Mexico,
  and lies just 15 kilometers east of our Pitarrilla project (refer to the Nazas
  Project Location Map, shown below). Covering a total of 23,591 hectares, the
  property is a collection of 4 claims purchased from Camino Resources Ltd., 2 of
  which were acquired through a prospecting agreement with La Cuesta
  International, Inc., and 25 small claims that are currently under an option to
  purchase agreement with Minerales y Productos Metalurgicos S.A. de C.V., a
  private Mexican mining company. The project can be accessed from the city of
  Torreon or the city of Durango by travelling paved highways to a point a few
  kilometers north of the town of Rodeo where a dirt road turns off to the
  northwest, eventually reaching the property as it passes along the Nazas River.
  The trip to the property from Torreon takes about 4 hours, and is about 5 hours
  from Durango.



Our exploration efforts at the Nazas Project are directed at
  discovering deposits of epithermal gold and silver mineralization. In 2010, only
  geological mapping and rock sampling was completed in the central part of the
  property where large epithermal quartz veins containing weak but significant
  gold mineralization are exposed at surface. The geochemical analyses obtained
  for the samples collected in 2010 have been combined with more than 1,000 assays
  from samples that had been previously collected by other companies. The plan for
  2011 is to survey the northern half of the property with a variety of
  geophysical methods in preparation for a diamond drilling program that will test
  geologically defined targets that are coincident with geochemical and /or
  geophysical anomalies.

- 57 -

---

Challacollo Project

Our wholly-owned Challacollo Project is located in Region One
  in northern Chile about 130 kilometers southeast of the port of Iquique and 15
  kilometers east of the Pan American Highway at an elevation of 1,500 meters
  above sea level (refer to the Challacollo Location Map, shown below). The
  property comprises approximately 37.5 square kilometers and essentially covers a
  range of high, rocky hills that is surrounded by sandy plains of the Atacama
  Desert. The project can be readily accessed by following a good dirt road that
  connects the site of the former Challacollo silver mine to the Pan American
  Highway. In order to maintain our rights to the concessions that comprise the
  project, we are required to pay annual patentes(taxes) to the Chilean
  government.

The Challacollo Project consists of four main north-south
  trending epithermal veins and silicified breccia structures that are hosted by
  volcanic tuffs and flows that were deposited on considerably older marine
  sedimentary rocks. The Lolón Vein is the largest and most productive vein; it is
  more than 3,500 meters in length, locally up to 13 meters wide, and was
  historically mined for silver along a 700 m-long section of the structure where
  multiple episodes of quartz deposition and brecciation can be observed. Below
  the zone of surficial oxidation, silver is associated with lead and zinc
  sulphides, but in the former underground mine the vein rock is oxidized, where
  primary sulphides have been replaced by iron oxides and silver occurs in
  supergene mineral phases.

During the two decades between the closure of the underground
  mine and us acquiring the Challacollo property in 2001, a number of mining
  companies held exploration options to explore the property. These companies
  completed underground sampling and drilled a total of 22 boreholes that tested a
  number of veins. Following our acquisition of the property, we completed an
  extensive sampling program of the underground workings at 25 meter intervals,
  collecting and analyzing more than 1,000 chip-channel samples. In addition, a
  seven-hole, 746-meter drill program was carried out and tested approximately 600
  meters of strike length of the Lolón Vein. In 2003, a follow-up drilling program
  of 5,685 meters was completed for in-fill and step-out purposes. Combining the
  assay results obtained by the 2002 and 2003 drilling campaigns with assays
  obtained from underground channel samples, we were able to prepare a resource
  estimate for the project in accordance with Canadian National Instrument 43-101
  and the CIM Standards. More recently, in 2007, we completed a 37-hole,
  7,986-meter reverse circulation drill program with the objective of expanding
  resources along the known veins and to test for porphyry-related copper
  mineralization. In 2010, we contracted to have multiple geophysical surveys
  performed over the property, including airborne magnetics and radiometrics
  surveys. We also completed a grid-controlled rock-sampling survey, where samples
  were collected for geochemical analysis as well as mineralogical spectral
  analysis. The new geophysical and geochemical data have been used to identify
  several drill targets that will be tested in 2011.

- 58 -

---



As of the date of this report, the Challacollo Project is
  without known Mineral Reserves, and any activity carried out on the property is
  exploratory in nature.

We completed an updated polygonal estimate of the resources for
  the Challacollo Project in July 2003, which included the results of the 2001 and
  2002 underground sampling and drill programs and the 2003 drill program. The
  resource estimate is based on a cut-off of 50 g/t of silver and was prepared in
  accordance with Canadian National Instrument 43-101 and the CIM Standards.
  Sundance Ventures reviewed and confirmed our classification of Indicated and
  Inferred Mineral Resources for the Challacollo Project, in a report dated
  September 17, 2003.

|Cautionary Note to U.S. Investors concerning estimates
      of Indicated Mineral Resources.                                                                                                                                                                                                                                                                                   
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                               
|Table No. 20 below uses the term Indicated Mineral
      Resource. We advise U.S. investors that while such terms are recognized
      and required under Canadian regulations, the SEC does not recognize it. U.S. investors are cautioned not to assume that any part or all of
        the mineral deposits in this category will ever be converted into
        reserves.

|Table No. 20                                             
|---------------------------------------------------------
|Silver Standard Resources Inc.                           
|Challacollo Project                                      
|Silver Standard Indicated Mineral Resource
      Estimate
|(50 g/t Silver Cutoff Grade)                             

|Classification | Tonnes    | Silver Grade (g/t)
|-------------- | --------- | ------------------
|Indicated      | 3,390,000 | 170.6             

- 59 -

---

|Cautionary Note to U.S. Investors concerning estimates
      of Inferred Mineral Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Table No. 21 below uses the term Inferred Mineral
      Resources. We advise U.S. investors that while such term is recognized
      and required under Canadian regulations, the SEC does not recognize it.
      Inferred Mineral Resources have a great amount of uncertainty as to
      their existence, and great uncertainty as to their economic and legal
      feasibility. It cannot be assumed that all or any part of an Inferred
      Mineral Resource will ever be upgraded to a higher category. Under
      Canadian rules, estimates of Inferred Mineral Resources may not form the
      basis of feasibility or other economic studies. U.S. investors are
        cautioned not to assume that any part or all of an Inferred Mineral
        Resource exists, or is economically or legally mineable.

|Table No. 21                                                                 
|-----------------------------------------------------------------------------
|Silver Standard Resources Inc.                                               
|Challacollo Project                                                          
|Silver Standard Inferred Mineral Resource Estimate
      with Sundance Review
|(50 g/t Silver Cutoff Grade)                                                 

|Classification | Tonnes    | Silver Grade (g/t)
|-------------- | --------- | ------------------
|Inferred       | 4,569,000 | 160.7             

Candelaria Mine Project

Our wholly-owned Candelaria Mine Project is located in the
  Candelaria Hills in west central Nevada approximately 55 miles south of
  Hawthorne, Nevada and approximately five miles west of Highway 95, which
  connects Reno, Nevada to Las Vegas, Nevada. Access to the property is by paved
  road from Highway 95. The mine site is connected to the local power grid and has
  water wells and pumping equipment in place. See the following Candelaria Mine
  Project Location Map.

- 60 -

---



The Candelaria District developed into the richest silver
  district in the State of Nevada, following discovery of high grade veins in
  1864. From then until 1954, the property produced 22 million ounces of silver.
  The property was acquired by Occidental Minerals and later Nerco Minerals, who
  built a processing facility and operated the mine from 1980 until 1989. During
  that time they produced over 33 million ounces of silver. Kinross Candelaria
  Mining Company, an indirect wholly-owned subsidiary of Kinross Gold, purchased
  the Candelaria mine in 1994 and operated the mine until January 1999. Kinross
  produced over 13 million ounces of silver, bringing the total historical
  production for the property to over 68 million ounces of silver.

Mineralization within the district is confined to the
  Candelaria Shear. High grade veins form along contacts of intrusive dikes within
  the host volcanics. Lower grade, bulk tonnage mineralization extends as a halo
  from the veins into the surrounding shear zone. The main ore bodies vary in
  width from 80 to 120 feet averaging 3.5 to 4.1 ounces of silver per ton.

Reclamation of the Candelaria mine has been ongoing for the
  past several years. The mine dumps have been recontoured and re-seeded, and both
  of the heap leach piles have been rinsed with fresh water and reseeded. Kinross
  completed re-contouring and re-seeding of the leach ponds in the first quarter
  of 2002. We have completed an environmental audit of the mine. The environmental
  audit did not identify any significant environmental issues and confirmed that
  the substantial amount of reclamation work completed to date met all state and
  federal guidelines. See Item 4.B - Business Overview  Mineral Properties
  Candelaria Mine Project.

As of the date of this report, the Candelaria Mine Project
  is without known Mineral Reserves, and any activity carried out on the property
  is exploratory in nature.

- 61 -

---

Maverick Springs Project

The Maverick Springs Project is located approximately half-way
  between Elko and Ely, Nevada and covers approximately 3,970 acres within the
  prospective region of gold/silver mineralization known as the Carlin Trend. We
  hold a 55% interest in the Maverick Springs Project, representing all of the
  silver mineral resources hosted in the project. The project can be accessed
  year-round by fifteen miles of gravel road from the Ruby Lakes National Wildlife
  Refuge, located west of the Maverick Springs Project. See the following Maverick
  Springs Project Location Map. The Carlin Trend is thought to mark a deep
  penetrating fault that separates relatively thick and stable continental crust
  to the east from a zone of thinned transitional crust to the west.

The Maverick Springs Project is underlain primarily by
  sediments covered by local basin-fill volcanic rocks. Limestones and sediments
  are the dominant hosts to the silver-gold mineralization at the Maverick Springs
  Project. The mineralization does not outcrop and has been delineated by programs
  of reverse circulation and diamond core drill holes. The mineralization trends
  north-northeast and occurs as a gently-folded sub-horizontal zone, of dimensions
  of approximately 8,000 feet in length and 2,500 feet wide. The zone of
  mineralization is approximately 200 feet thick and occurs at depths of 500 feet
  to 600 feet below surface.



Prior to Vista and VNC acquiring the option on the property
  from Newmont, geological mapping, soil and stream geochemical surveys, and a
  substantial amount of drilling were carried out on the property. A total of 130
  drill holes were completed during this period, of which 37 were shallow
  conventional rotary or percussion holes, 39 were reverse circulation holes, and
  54 were diamond core holes. Following the acquisition of the option from
  Newmont, Vista completed a wide-spaced seven hole reverse circulation drill
  program to test for continuation of the previously identified mineralized zone.
  In 2003 and 2004, Vista completed an additional 16 and 13, respectively, reverse
  circulation holes to further test for the continuation of mineralization. In
  2006, an 18-hole, 16,035 foot reverse circulation drill program encountered
  additional silver mineralization at the north end of the mineralized zone. In
  2008, we assumed the role of operator under the joint venture and completed a 5
  hole, 5,330 foot reverse circulation drill program. We did not carry out any
  exploration activities in 2009 or 2010.

- 62 -

---

As of the date of this report, the Maverick Springs Project
  is without known Mineral Reserves, and any activity carried out on the property
  is exploratory in nature.

Snowden Mining Industry Consultants of Vancouver, British
  Columbia completed the following resource estimate for the Maverick Springs
  Project in accordance with the standards of Canadian National Instrument 43-101
  and the definitions of the CIM Standards, in a report dated April 13, 2004. We
  hold a 55% interest in the Maverick Springs Project, representing all of the
  silver mineral resources hosted in the project.

|Cautionary Note to U.S. Investors concerning estimates
      of Indicated Mineral Resources.                                                                                                                                                                                                                                                                                               
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                           
|Table No. 22 below uses the term Indicated Mineral
      Resource. We advise U.S. investors that while such terms are recognized
      and required under Canadian regulations, the SEC does
      not recognize
      it. U.S. investors are cautioned not to assume that any part or all of
        the mineral deposits in this category will ever be converted into
        reserves.

|Table No. 22                             
|-----------------------------------------
|Silver Standard Resources Inc.           
|Maverick Springs Project                 
|Indicated Mineral Resource Estimate      
|(1 oz/ton Silver-Equivalent Cutoff Grade)

|Classification | Tons (millions) | Silver Grade (oz/ton) | Gold Grade (oz/ton)
|-------------- | --------------- | --------------------- | -------------------
|Indicated      | 69.63           | 1.0                   | 0.010              

|Cautionary Note to U.S. Investors concerning estimates
      of Inferred Mineral Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Table No. 23 below uses the term Inferred Mineral
      Resources. We advise U.S. investors that while such term is recognized
      and required under Canadian regulations, the SEC does not recognize it.
      Inferred Mineral Resources have a great amount of uncertainty as to
      their existence, and great uncertainty as to their economic and legal
      feasibility. It cannot be assumed that all or any part of an Inferred
      Mineral Resource will ever be upgraded to a higher category. Under
      Canadian rules, estimates of Inferred Mineral Resources may not form the
      basis of feasibility or other economic studies. U.S. investors are
        cautioned not to assume that any part or all of an Inferred Mineral
        Resource exists, or is economically or legally mineable.

- 63 -

---

|Table No. 23                             
|-----------------------------------------
|Silver Standard Resources Inc.           
|Maverick Springs Project                 
|Inferred Mineral Resource Estimate       
|(1 oz/ton Silver-Equivalent Cutoff Grade)

|Classification | Tons (millions) | Silver Grade (oz/ton) | Gold Grade (oz/ton)
|-------------- | --------------- | --------------------- | -------------------
|Inferred       | 85.55           | 1.0                   | 0.008              

Bowdens Project

Location and Access

Our wholly-owned Bowdens Project is located approximately 200
  kilometers northwest of Sydney in eastern New South Wales, Australia, near
  latitude 32o 39S, longitude 149o 52E. Access is by the paved road between
  Mudgee (population 7,500) and Rylstone (population 750) and by numerous gravel
  and dirt roads that criss-cross the area. A high-tension power line crosses the
  property. See the following Bowdens Project General Location Map.

The Bowdens Project consists of one exploration tenement
  covering 93 square kilometers held 100 percent by Silver Standard Australia Pty.
  Ltd, our wholly-owned subsidiary. In order to maintain our interest in the
  property, we are required to make annual work expenditures on the property. For
  the years ended January 29, 2007, January 29, 2008 and January 29, 2009, minimum
  required expenditures are A$62,000 per year. We have also purchased three farms
  totalling 1,338 hectares that cover the known mineralization and proposed mine
  infrastructures sites.

- 64 -

---



The original tenements covering the mineralization of the
  Bowdens Project were granted to CRA Exploration during 1989 and 1990. The
  following is a chronological description of mineral exploration on the Bowdens
  Project: 1989 - 1992 CRA Exploration completed rock chip and soil sampling,
  geological mapping, induced polarization surveys, 33 reverse circulation drill
  holes totalling 3,438 meters and five diamond drill core holes for 842
  meters.

1994-1996 GSM Exploration acquired the project and completed 17
  reverse circulation holes totalling 2,413 meters and five diamond drill holes
  for 665 meters. GSM Exploration also completed a scoping study, which included a
  mineral resource estimate, metallurgical testing and environmental studies.
  1997-1998 We acquired GSM Exploration and carried out exploration programs over
  the two main prospects of the Bowdens Project and a regional reconnaissance
  program to expand on previous reconnaissance work. In May 1998, our board of
  directors approved a $2.7 million feasibility study of the economics of the
  Bowdens Project, and we commenced a reserve definition drill program to expand
  indicated and inferred silver resources and to provide additional geological and
  metallurgical information. A feasibility study is required to be completed for
  the Bowdens Project before any reserves can be designated for the project.

1999-2001 We completed preliminary resource modelling, which
  indicated that additional in-fill drilling was required prior to completion of
  the final reserve estimate, and prospecting in the area west of the known
  mineralization indicated the potential for locating additional tonnage. (A
  feasibility study is required to be completed for the Bowdens Project before any
  reserves can be designated for the project.) Drilling in this area was carried
  out in 2000. In 2001, we completed a two phase drilling program consisting of 19
  reverse circulation drill holes totalling 2,711 meters on the Bowdens Project.
  Based on the results of the drill programs, we initiated an updated block model
  resource estimate for the Bowdens Project, which was completed in October
  2001.

- 65 -

---

2002 - 2004 We completed an in-fill drill program in order to
  better define silver resources on the property for completion of the feasibility
  study on the Bowdens Project and continued work on elements of the feasibility
  study.

2005 - 2007 We completed an airborne geophysics survey and two
  drill programs to follow up on drill targets identified by the airborne survey.
  No significant intersections were achieved in this regional drill program. We
  also completed additional metallurgical test work.

As of December 31, 2007, a total of 425 drill holes totalling
  47,672 metres, including water exploration holes, have been completed on the
  Bowdens Silver Project since 1989. We have not carried out any significant
  activities since 2007.

The Bowdens Project is located within a shallow depression that
  formed during the Late Silurian to Middle Devonian ages. Other rocks exposed in
  the area include Devonian age marine sediments, Middle Carboniferous age granite
  intrusives and the Permian age Rylstone volcanics.

Outcropping along the eastern margin of the depression are
  volcanic rocks. Mineralization at Bowdens is hosted by the rocks near the base
  of this formation.

Our geologists have identified three styles of mineralization
  and alteration. First, a silica alteration that is best developed within the
  volcanics with pervasive silica forming up to 60 percent of the rock. Visible
  sulfides comprise five to seven percent of the rock and are composed of mainly
  fine-grained pyrite with minor galena and sphalerite. Occasionally
  quartz-sulfide veinlets form stockworks and sheeted zones within this style of
  mineralization. Second, a quartz vein or vein-breccia style of alteration is
  well developed in an area of mineralization. Vein widths range from 5.0
  centimeters up to 1.5 meters and consist of fine layers of chalcedonic and
  crystalline quartz with thin rhodochrosite bands. Sulphides are associated with
  quartz and sometimes form bands of pyrite, sphalerite and galena. Third, a
  sericitic green clay alteration is best developed in the crystal tuff and
  ignimbrites and consists of sericite, carbonate, epidote, and minor one to two
  percent pyrite.

Resource Estimates

As of the date of this report, the Bowdens Project is
  without known Mineral Reserves, and any activity carried out on the property is
  exploratory in nature.

James A. McCrea, P. Geo., of Surrey, British Columbia completed
  the following resource estimate for the Bowdens Project in accordance with the
  standards of Canadian National Instrument 43-101 and the definitions of the CIM
  Standards in March 18, 2004.

|Cautionary Note to U.S. Investors concerning estimates
      of Measured Mineral Resources.                                                                                                                                                                                                                                                                                 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                            
|Table No. 24 below uses the term Measured Mineral
      Resource. We advise U.S. investors that while such term is recognized and
      required under Canadian regulations, the SEC does not recognize it. U.S. investors are cautioned not to assume that any part or all of
        the mineral deposits in this category will ever be converted into
        reserves.

- 66 -

---

|Table No. 24                                    
|------------------------------------------------
|Silver Standard Resources Inc.                  
|Bowdens Project                                 
|Measured Mineral Resource Estimate              
|(40 g/t Silver-Equivalent Cutoff Grade  capped)

|Classification | Tonnes (millions) | Silver Grade (g/t) | Lead (%) | Zinc (%)
|-------------- | ----------------- | ------------------ | -------- | --------
|Measured       | 22.9              | 50.4               | 0.33     | 0.46    

|Cautionary Note to U.S. Investors concerning estimates
      of Indicated Mineral Resources.                                                                                                                                                                                                                                                                                 
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                             
|Table No. 25 below uses the term Indicated Mineral
      Resource. We advise U.S. investors that while such term is recognized and
      required under Canadian regulations, the SEC does not recognize it. U.S. investors are cautioned not to assume that any part or all of
        the mineral deposits in this category will ever be converted into
        reserves.

|Table No. 25                                    
|------------------------------------------------
|Silver Standard Resources Inc.                  
|Bowdens Project                                 
|Indicated Mineral Resource Estimate             
|(40 g/t Silver-Equivalent Cutoff Grade  capped)

|Classification | Tonnes (millions) | Silver Grade (g/t) | Lead (%) | Zinc (%)
|-------------- | ----------------- | ------------------ | -------- | --------
|Indicated      | 24.7              | 53.33              | 0.26     | 0.36    

|Cautionary Note to U.S. Investors concerning estimates
      of Inferred Mineral Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Table No. 26 below uses the term Inferred Mineral
      Resources. We advise U.S. investors that while such term is recognized
      and required under Canadian regulations, the SEC does not recognize it.
      Inferred Mineral Resources have a great amount of uncertainty as to
      their existence, and great uncertainty as to their economic and legal
      feasibility. It cannot be assumed that all or any part of an Inferred
      Mineral Resource will ever be upgraded to a higher category. Under
      Canadian rules, estimates of Inferred Mineral Resources may not form the
      basis of feasibility or other economic studies. U.S. investors are
        cautioned not to assume that any part or all of an Inferred Mineral
        Resource exists, or is economically or legally mineable.

|Table No. 26                                    
|------------------------------------------------
|Silver Standard Resources Inc.                  
|Bowdens Project                                 
|Inferred Mineral Resource Estimate              
|(40 g/t Silver-Equivalent Cutoff Grade  capped)

|Classification | Tonnes (millions) | Silver Grade (g/t) | Lead (%) | Zinc (%)
|-------------- | ----------------- | ------------------ | -------- | --------
|Inferred       | 13.4              | 40.9               | 0.21     | 0.32    

- 67 -

---

Silvertip Project

The Silvertip Project is located in northern British Columbia
  approximately 85 kilometers south of Watson Lake, Yukon Territory. The property
  can be accessed by a 25 kilometer dirt road that connects to the Alaska Highway.
  See the following Silvertip Property Location Map.

In February 2010, we sold our 100% interest in the Silvertip
  Project, located in northern British Columbia approximately 85 kilometers south
  of Watson Lake, Yukon Territory to Silvercorp Metals Inc. (See Item 4.B
  Business Overview  Mineral Properties  Silvertip Property.)

Sunrise Lake Deposit

The Sunrise Lake Deposit is located about 130 kilometers by air
  east-northeast of Yellowknife, Northwest Territories, Canada. Access to the
  property is typically by ski or float-equipped aircraft. The Sunrise Lake
  Deposit consists of 6 mining leases, which form a contiguous block with an
  aggregate area of 1,618 hectares.



The Sunrise Lake Deposit consists of a lens of polymetallic
  massive sulphides overlying stringer zones of low-grade mineralization. The
  massive sulphide lens is three meters to four meters thick and has a strike
  length of about 120 meters at the surface. At depth it is up to 190 meters long.
  The deposit remains open down plunge.

Hemisphere and Aber discovered the Sunrise Lake Deposit in
  October 1987. During 1987 and 1988, they drilled a total 18,951 meters in 65
  diamond drill holes on the Sunrise Lake Deposit and 1,280 meters in 12 holes on
  peripheral targets. In 1998, they completed an additional seven diamond drill
  holes aggregating 1,543 meters. We have not carried out any exploration
  activities on the property since acquisition.

As of the date of this report, the Sunrise Lake Deposit is
  without known Mineral Reserves, and any activity carried out on the property is
  exploratory in nature.

We completed an updated polygonal estimate of the resources for
  the Sunrise Lake Deposit in August 2003. The resource estimate is based on a
  cut-off of 30 g/t of silver and was prepared in accordance with Canadian
  National Instrument 43-101 and the CIM Standards. Roscoe Postle Associates Inc.
  (now known as Scott Wilson Roscoe Postle Associates Inc.) reviewed and
  confirmed our classification of Indicated and Inferred Mineral Resources for the
  Sunrise Lake Deposit in a report dated September 3, 2003.

- 68 -

---

|Cautionary Note to U.S. Investors concerning estimates
      of Indicated Mineral Resources.                                                                                                                                                                                                                                                                                   
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                               
|Table No. 27 below uses the term Indicated Mineral
      Resource. We advise U.S. investors that while such terms are recognized
      and required under Canadian regulations, the SEC does not recognize it. U.S. investors are cautioned not to assume that any part or all of
        the mineral deposits in this category will ever be converted into
        reserves.

|Table No. 27                                                                       
|-----------------------------------------------------------------------------------
|Silver Standard Resources Inc.                                                     
|Sunrise Lake Deposit                                                               
|Silver Standard Indicated Mineral Resource Estimate
      with Roscoe Postle Review
|(30 g/t Silver Cutoff Grade - Uncut)                                               

|Classification | Tonnes    | Silver Grade (g/t) | Lead (%) | Zinc (%) | Copper (%) | Gold Grade (g/t)
|-------------- | --------- | ------------------ | -------- | -------- | ---------- | ----------------
|Indicated      | 1,522,000 | 262                | 2.39     | 5.99     | 0.08       | 0.67            

|Cautionary Note to U.S. Investors concerning estimates
      of Inferred Mineral Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Table No. 28 below uses the term Inferred Mineral
      Resources. We advise U.S. investors that while such term is recognized
      and required under Canadian regulations, the SEC does not recognize it.
      Inferred Mineral Resources have a great amount of uncertainty as to
      their existence, and great uncertainty as to their economic and legal
      feasibility. It cannot be assumed that all or any part of an Inferred
      Mineral Resource will ever be upgraded to a higher category. Under
      Canadian rules, estimates of Inferred Mineral Resources may not form the
      basis of feasibility or other economic studies. U.S. investors are
        cautioned not to assume that any part or all of an Inferred Mineral
        Resource exists, or is economically or legally mineable.

|Table No. 28                                                                      
|----------------------------------------------------------------------------------
|Silver Standard Resources Inc.                                                    
|Sunrise Lake Deposit                                                              
|Silver Standard Inferred Mineral Resource Estimate
      with Roscoe Postle Review
|(30 g/t Silver Cutoff Grade - Uncut)                                              

|Classification | Tonnes    | Silver Grade (g/t) | Lead (%) | Zinc (%) | Copper (%) | Gold Grade (g/t)
|-------------- | --------- | ------------------ | -------- | -------- | ---------- | ----------------
|Inferred       | 2,555,000 | 169                | 1.92     | 4.42     | 0.07       | 0.51            

Veta Colorada Project

The Veta Colorada Project is located a few kilometers northwest
  of the city of Parral in Chihuahua State, Mexico, approximately 210 kilometers
  south of larger city of Chihuahua. Mining in the Parral mineral district
  commenced in the late 1500s when high-grade silver-gold mineralization was
  discovered in the Colorada vein, the principal quartzvein structure in the
  district. For nearly four centuries, dozens of small mines intermittently
  exploited the Veta Colorada. The property of the Veta Colorada Project consists
  of nine mining concessions covering an area of approximately 4,244 hectares. The
  project can be accessed from paved Highway 24 that connects the City of Hidalgo del
  Parral, Mexico and Durango City, Mexico. In order to maintain our rights to
  these concessions we are required to pay surface mining taxes to the Mexican
  government.

- 69 -

---

The Veta Colorada vein structure is traceable for over 10
  kilometers, striking north-south and dipping moderately to the east. The base of
  this impressive mineralized structure is represented by a planar fault that cuts
  through a sequence of volcanic rocks a few hundred meters thick as well as
  significantly older marine sediemntayr rocks that form the basement to the
  volcanic. Quartz veining, with textures that are typical of epithermal precious
  metal deposits, was deposited along sections of this major fault. The commonly
  banded and locally brecciated quartz veins attain thicknesses of one to four
  meters thick. The volcanic rocks in the immediate hanging wall of the veins are
  strongly brecciated, with the quartz-cemented breccias extending up to 30 meters
  from the veins. Silver mineralization in the breccias tends to be less
  concentrated than the vein-hosted mineralization and was generally left in place
  by previous miners.

Since acquiring the project, we have performed a limited amount
  of exploration work, including geological mapping, surface rock sampling, a
  limited amount of underground rock sampling and the diamond drilling of three
  boreholes for a combined length of 1,001 meters. This work was mainly done in
  2006; no exploration was done on the property in 2010.

As of the date of this report, the Veta Colorada Project is
  without known Mineral Reserves, and any activity carried out on the property is
  exploratory in nature.

San Marcial Project

The San Marcial Project is located in Sinaloa State, Mexico 56
  miles (90 kilometers) due east of Mazatlan in the Sierra Madre Mountains in west
  central Mexico and is comprised of two claims covering an area of 4.8 square
  miles (1,250 hectares). The concession is generally road accessible year round
  except during the rainy season when 4-wheel drive vehicles are required. See the
  following San Marcial Project Location Map. In order to maintain our rights to
  these concessions, we are required to pay surface mining taxes to the Mexican
  government.

The geology at the San Marcial Project can be sub-divided into
  two distinct underlying rock types, an upper volcanic group of rocks occurring
  in the higher and more mountainous portions of the project in the northeast, and
  the underlying lower volcanic group of rocks that occur at lower elevations. The
  known silver prospects at the San Marcial Project are hosted along what appears
  to be a narrow set of northwest trending fault structures in two known vein
  systems, both of which outcrop and can be identified by small historical
  diggings over a strike length of approximately 300 meters. Prior to our
  acquisition of the project, Gold-Ore carried out regional stream sediment
  sampling, geological mapping, rock sampling and trenching and completed the
  drilling of six holes totaling 601.7 meters. Following acquisition, we completed
  two drill programs totalling 2,526.8 meters in 14 holes.

As of the date of this report, the San Marcial Project is
  without known Mineral Reserves, and any activity carried out on the property is
  exploratory in nature.

- 70 -

---



We completed an estimate of the resources for the San Marcial
  Project in August 2002. The resource estimate is based on a cut-off of 30 g/t of
  silver and was prepared in accordance with Canadian National Instrument 43-101
  and the CIM Standards. Sundance Ventures reviewed and confirmed our
  classification of Indicated and Inferred Mineral Resources for the San Marcial
  Project in a report dated October 15, 2002.

|Cautionary Note to U.S. Investors concerning estimates
      of Inferred Mineral Resources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Table No. 29 below uses the term Inferred Mineral
      Resources. We advise U.S. investors that while such term is recognized
      and required under Canadian regulations, the SEC does not recognize it.
      Inferred Mineral Resources have a great amount of uncertainty as to
      their existence, and great uncertainty as to their economic and legal
      feasibility. It cannot be assumed that all or any part of an Inferred
      Mineral Resource will ever be upgraded to a higher category. Under
      Canadian rules, estimates of Inferred Mineral Resources may not form the
      basis of feasibility or other economic studies. U.S. investors are
        cautioned not to assume that any part or all of an Inferred Mineral
        Resource exists, or is economically or legally mineable.

- 71 -

---

|Table No. 29                                                                 
|-----------------------------------------------------------------------------
|Silver Standard Resources Inc.                                               
|San Marcial Project                                                          
|Silver Standard Inferred Mineral Resource Estimate
      with Sundance Review
|(30 g/t Silver Cutoff Grade  uncapped)                                      

|Classification | Tonnes (millions) | Silver Grade (g/t) | Lead (%) | Zinc (%)
|-------------- | ----------------- | ------------------ | -------- | --------
|Inferred       | 2.31              | 191.79             | 0.32     | 0.66    

Office Space

In April 2009, we agreed to sublease approximately 10,745
  square feet at 1400, 999 West Hastings Street, Vancouver, BC for a 45 month
  period commencing July 1, 2009 and expiring on March 30, 2013. Under the terms
  of the sublease, we agreed to pay $19 per square foot per annum and a
  proportionate share of operating costs and operating taxes over the term of the
  sublease. Effective July 27, 2009, we moved our head office to 1400, 999 West
  Hastings Street, Vancouver, BC.

We continue to lease our former head office at 1180, 999 West
  Hastings Street, Vancouver, BC, under two leases, both of which expire on March
  31, 2013. Under the terms of one of the leases, we lease 8,361 square feet of
  office space for a five year period at rates increasing from $284,279 in the
  first year to $334,440 per year in the fifth year. Under the terms of the other
  lease, we lease 1,319 square feet of office space for a four year and five month
  period at rates increasing from $18,686 to $52,760 in the fifth year. We are
  also required to pay our proportionate share of operating costs and property
  taxes over the term of these leases.

Under a sublease dated June 16, 2009, we agreed to sublease
  approximately 6,000 square feet of the office space at 1180, 999 West Hastings
  Street, Vancouver, BC until March 30, 2013 for $22 per square foot per annum and
  a proportionate share of operating costs and property taxes.

|Item 4A | Unresolved Staff Comments
|------- | -------------------------

There are no unresolved SEC comments at this time.

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

| | A. | Operating Results
| | -- | -----------------

We are a mining company with a portfolio of silver-dominant
  projects predominantly in the Americas. Our strategic focus is on optimizing
  production of silver from our Pirquitas mine and on advancing our other mineral
  projects, including San Luis, Pitarrilla, Diablillos and San Agustin. We have a
  large in-ground silver position and look to exploit this for the value of our
  shareholders. Certain of our projects also contain significant gold resources.
  We will grow our business through the development of our core projects and
  monetize others to support our funding requirements. 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 years ended
  December 31, 2010, 2009 and 2008 is prepared as of February 28, 2011 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 (GAAP). All dollar amounts referred to in this
  discussion and analysis are expressed in U.S. dollars except where indicated
  otherwise. We direct investors to the section Risks and Uncertainties and to
  page 41 for a cautionary statement on forward-looking information and non-GAAP
  financial performance measures included within this MD&A. Additional
  information relating to us, including our annual information form, is available
  free of charge on the System for Electronic Document Analysis and Retrieval
  (SEDAR) website at www.sedar.com, and on the
  EDGAR section of the United States Securities and Exchange Commissions (SEC)
  website at www.sec.gov.

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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). See
  Item 11 Quantitative and Qualitative Disclosure About Market Risk for a
  description of foreign exchange risk.

Pirquitas Mine, Argentina

During the year ended December 31, 2010, we processed 1,255,261
  tonnes of ore at an average milling rate of 3,439 tonnes per day. This ore
  contained silver head grades of 233 grams/tonne and achieved recoveries of 65.2%
  . The average cash production cost per ounce, which includes direct production
  expenses net of by-products was $12.16. The average cash operating cost per
  ounce, which includes third party smelting, refining and transportation costs,
  royalties and production taxes, was $18.03. Total production cost per ounce
  including depreciation, depletion and amortization was $22.32.

We continued to see improved silver production at our Pirquitas
  Mine quarter over quarter in 2010 since the completion of the commissioning
  phase on December 1, 2009. During the fourth quarter, we produced 2,067,438
  ounces of silver, compared to 1,932,978 ounces in the third quarter, 1,692,466
  in the second quarter and 609,258 in the first quarter. This brought total
  production for the year to 6,302,140 ounces. The improving trend in production
  is due to improved recoveries and higher grade zones in the fourth quarter. With
  the increase in production and resulting silver sales, the Pirquitas mine
  reached an important milestone of being cash positive from the third quarter
  until the end of the year.

Cash production cost per ounce declined through 2010, from
  $29.32 per ounce for the first quarter down to $9.47 per ounce in the fourth
  quarter. This has been achieved through increased production and recoveries
  whilst maintaining consistent operating costs. Cash operating costs on a per
  ounce basis were higher in the third and fourth quarters than the second quarter
  primarily due to escalating deductions and refining charges driven by increased
  silver prices. Total production costs mirror this trend through 2010.

The open pit mine operated well with 4,360,000 tonnes (47,000
  tonnes per day) being mined in the fourth quarter, which exceeded each of the
  first three quarters of the year which averaged approximately 43,000 tonnes per
  day. This is in line with the project design assumptions.

The mill feed consisted primarily of transitional ore until
  September when sulphide ore from the open pit was fed continuously into the
  process plant for the first time. This represented a key milestone for
  Pirquitas, as the pit sulphide ore represents the life of mine feed for the
  project. The metallurgical response to the sulphide ore has been in line with
  expectations and overall silver recovery rates are achieving feasibility study
  expectations.

Commissioning of the gravity pre-concentration stage commenced
  near the end of the third quarter and results have been encouraging. This has
  lifted the required crushing throughput rate from 4000tpd to 6000tpd, and the crushing circuit is in the process of being
  de-bottlenecked to consistently achieve the additional throughput, and the level
  of upgrading exhibited from the process is in line with expectations. Proof of
  concept for silver recovery has been achieved as a result.

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We expect production for 2011 to be approximately 8.5 million
  ounces of silver at an average cash production cost of $9.00 per ounce of silver
  (net of by product credits), average cash operating cost of $15.00 per ounce and
  $19.00 per ounce total production costs. Please refer to the cautionary note
  regarding forward looking statements and non-GAAP financial performance measures
  contained in this MD&A.

With the continuous processing of sulphide ore now established,
  the zinc flotation circuit was re-commissioned and we are now making separate
  silver and zinc concentrates, with the first sales of zinc concentrate expected
  in early 2011. We expect to produce approximately 10 million pounds of zinc in
  2011. Please refer to the cautionary note regarding forward looking statements
  and non-GAAP financial performance measures contained in this MD&A.

The tin circuit has been proven capable of producing a tin
  concentrate but despite being able to produce a high grade saleable gravity tin,
  the tin recovery rate is low. Test work is being conducted at a number of
  laboratories globally, with the objective to improve the tin recovery while
  maintaining a good final concentrate tin grade. We will advise through 2011
  progress on the tin circuit.

A total of $1,609,000 was spent on approximately 9,000 meters
  drilling at Pirquitas during the second half of 2010. The majority of the
  diamond drill holes tested for the continuation of silver-tin-zinc
  mineralization beneath the designed bottom of the current open pit. The results
  of the 2010 drilling campaign are deemed to be sufficiently positive to justify
  a follow-up drilling program in 2011, likely to be completed in the first half
  of the year. We will continue drilling at Pirquitas and include results in an
  updated reserves and resources statement in the second half of 2011.

The Pirquitas mine has a fiscal stability agreement with the
  government of Argentina dating from 1998. In 2002, the government of Argentina
  implemented an export duty on concentrates that did not apply to companies with
  pre-existing fiscal stability agreements. In December 2007 the National Customs
  Authority of Argentina levied an export duty of 10% on concentrates for projects
  with fiscal stability agreements predating 2002. We have been advised that the
  project is subject to this export duty despite our rights under our fiscal
  stability agreement from 1998. The legality of the export duty has been
  challenged and is currently under review by the court in Argentina. In July
  2010, we filed a claim in the Federal Court of Jujuy Province for the repayment
  of export duties paid to date and for an order to cease payment of the export
  duty until the matter is decided by the court. The court granted an order
  effective September 29, 2010 to cease payment of the export duty pending the
  courts determination of the legality of export duty. Up to December 31, 2010 the
  Pirquitas mine has paid $6,646,000 in export taxes on concentrate sales and
  accrued for an additional $3,095,000 since we received the order to cease
  payment. The export tax expense has been recorded within cost of sales until a
  resolution is reached, if these duties are recovered in the future we will
  recognize a gain in the statement of earnings for the full amount.

Financial Summary for 2010

- On December 21, 2010 we completed the sale of our 100% interest in the
    Snowfield and Brucejack properties located in British Columbia, Canada to
    Pretium Resources Inc. (Pretium) for total consideration of $442.3 million
    (C$450.0 million). Pretium became a publically traded company on the Toronto
    Stock Exchange following the closing of its intial public offering (IPO) on
    December 21, 2010. Under the terms of the transaction we received a total of
    32,537,833 common shares of Pretium, representing 41.27% of its issued and
    outstanding common shares with a fair value of $191.9 million (C$195.2 million) based on the IPO price of C$6.00 per
    share. We also received cash proceeds of $211.3 million (C$215.0 million)
    (before underwriters fees of $12.4 million (C$12.6 million)) and a
    non-interest bearing promissory note in the principal amount of $39.1
    million (C$39.8 million), which was automatically convertible into common
    shares of Pretium at C$6.00 per share 40 days after closing to the extent
    not repaid by Pretium. Our sale of the Snowfield and Brucejack properties
    resulted in a gain on disposal of $388.8 million, and $360.6 million after
    tax.
    On January 6, 2011 the underwriters exercised in part the
    over-allotment option granted to them in connection with the IPO. Pursuant
    to the terms of the promissory note, we received $16.7 million (C$17.0
    million), after underwriters fees, from partial repayment of the note. On
    January 31, 2011 the balance of the promissory note was automatically
    converted into 3,625,500 common shares of Pretium in accordance with its
    terms. Following this conversion our ownership interest in Pretium
    increased to 42.31%.
    On March 23, 2011, Pretium Resources Inc. filed a
    preliminary prospectus in connection with a proposed sale by us of a
    portion of our equity interest in Pretium. The number of Pretium common
    shares that we will sell and the price at which we will sell such shares,
    are not determined as of March 28, 2011, and will be determined based on
    marketed efforts by the underwriters in connection with the proposed
    offering. The offering is subject to customary conditions, including
    receipt of all necessary regulatory approvals, and is scheduled to close
    in early April, 2011.

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- On February 28, 2011 we reached an agreement to acquire
      the remaining interest in the San Luis project from our joint venture
      partner Esperanza Resources Corp. (Esperanza). Upon completion of the
      acquisition we will own 100% of the project. Under the terms of the
      agreement we will pay C$17 million in cash, transfer to Esperanza the
      6.459 million shares of Esperanza that we own, and grant to Esperanza a 1%
      net smelter return royalty on future revenues.
- Net earnings of $346.2 in 2010 million compared to a net
      loss of $13.2 million in 2009 or $4.44 per share in 2010 compared to a
      loss of $0.19 per share in 2009.
- The Pirquitas mine generated earnings from operations of
      $10.0 million comprising:
- Revenue of $112.3 million;
- Cost of sales of $76.0 million; and
- Non-cash depletion, depreciation and amortization of
        $26.3 million.
- At Pirquitas we milled 1,255,261 tonnes of ore with
      silver grades of 233 grams/tonne at recoveries of 65.2%, producing a total
      of 6,302,140 ounces of silver. We sold 5,936,657 ounces at a weighted
      average silver price of $20.92 per ounce for total revenues of $112.3
      million.
- Pirquitas mined a continuous feed of sulphide ores from
      September until the end of the year, with silver and zinc recoveries
      achieving designed rates. The commissioning of the gravity pre-
      concentration circuit during the year helped to confirm the processing
      concept for silver recovery. During the year Pirquitas produced 4.6
      million lbs of zinc with a sales value of approximately $3.5 million,
      which will be delivered during the first quarter of 2011.
- We incurred total exploration expenditures of $54.8
      million to advance our other key properties during the year. Significant
      expenditures included:
- $17.7 million at the Pitarrilla project in
        Mexico;
- $6.4 million at the San Luis project in Peru;
- $2.6 million at the Berenguela project in
        Peru;

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- $2.2 million at the Diablillos project in
        Argentina;
- $1.3 million at the Nazas project in Mexico;
- $1.1 million at the San Agustin project in Mexico;
        and
- $21.5 million at the Snowfield and Brucejack projects in
        Canada, which were subsequently sold in December 2010 to
        Pretium.
- In February we sold the Silvertip project for $15.0
      million for an after tax gain of $13.1 million.
- In February we closed a public share offering of
      6,729,000 common shares at a price of $17.00 per share, for aggregate
      gross proceeds of $114.4 million. After deducting underwriting fees, net
      of tax credits, and expenses, net proceeds were approximately $109.6
      million.
- During 2010 we spent $12.6 million in capital
      expenditures at the Pirquitas Mine.

SUMMARIZED ANNUAL FINANCIAL AND OPERATIONAL
  RESULTS(thousands of dollars, except production data and per share
    amounts)

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

|                                 |  | 2010      |  |  | 2009(1)   |  |  | 2008 |  |  | 2007 | 
|-------------------------------- |  | --------- |  |  | --------- |  |  | ---- |  |  | ---- | 
|                                 |  |           |  |  |           |  |  |      |  |  |      | 
|Production Data                  |  |           |  |  |           |  |  |      |  |  |      | 
|                                 |  |           |  |  |           |  |  |      |  |  |      | 
|Tonnes milled                    |  | 1,255,261 |  |  | 410,454   |  |  | N/A  |  |  | N/A  | 
|Silver head grades (grams/tonne) |  | 233       |  |  | 185       |  |  | N/A  |  |  | N/A  | 
|Silver recoveries                |  | 65.2%     |  |  | 45.0%     |  |  | N/A  |  |  | N/A  | 
|Silver produced (ounces)         |  | 6,302,140 |  |  | 1,114,300 |  |  | N/A  |  |  | N/A  | 
|Silver sold (ounces)             |  | 5,936,657 |  |  | 602,400   |  |  | N/A  |  |  | N/A  | 

|(1) | We entered production at our Pirquitas mine in Argentina
      on December 1, 2009. As a result, 2009 is our first year of reported
      revenues and production data. Production during 2009 included processing
      historical jig tailings to prove the mechanical operation of the plant;
      since December 1, 2009, the tonnes milled were primarily oxide
      ore
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                             |   | 2010      |  |   | 2009     |  |   | 2008    |  |   | 2007     | 
|-------------------------------------------- | - | --------- |  | - | -------- |  | - | ------- |  | - | -------- | 
|Cash cost per ounce of silver(1)             |   |           |  |   |          |  |   |         |  |   |          | 
|Cash production cost                         | $ | 12.16     |  | $ | 8.98     |  |   | N/A     |  |   | N/A      | 
|Cash operation
      cost                    | $ | 18.03     |  | $ | 16.57    |  |   | N/A     |  |   | N/A      | 
|Total cost                                   | $ | 22.32     |  | $ | 20.30    |  |   | N/A     |  |   | N/A      | 
|Revenues (2)                                 | $ | 112,256   |  | $ | 5,442    |  | $ | -       |  | $ | -        | 
|Average realized silver price (per ounce)    | $ | 20.92     |  | $ | 17.49    |  |   | N/A     |  |   | N/A      | 
|Average London spot silver price (per ounce) | $ | 20.16     |  | $ | 17.67    |  |   | N/A     |  |   | N/A      | 
|Other financial information                  |   |           |  |   |          |  |   |         |  |   |          | 
|Net earnings (loss)                          | $ | 346,239   |  | $ | (13,193) |  | $ | (5,946) |  | $ | (33,965) | 
|Basic earnings (loss) per share              | $ | 4.44      |  | $ | (0.19)   |  | $ | (0.09)  |  | $ | (0.55)   | 
|Diluted earnings (loss) per share            | $ | 4.42      |  |   | ($0.19)  |  | $ | (0.09)  |  | $ | (0.55)   | 
|Cash and cash equivalents                    | $ | 232,311   |  | $ | 26,659   |  | $ | 72,013  |  | $ | 81,600   | 
|Total assets                                 | $ | 1,262,017 |  | $ | 749,925  |  | $ | 567,905 |  | $ | 504,851  | 
|Working capital                              | $ | 303,844   |  | $ | 24,515   |  | $ | 41,486  |  | $ | 118,680  | 
|Long-term convertible notes                  | $ | 118,203   |  | $ | 110,739  |  | $ | 104,046 |  | $ | -        | 
|Cash dividends declared                      | $ | -         |  | $ | -        |  | $ | -       |  | $ | -        | 

|(1) | The calculation of cash production cost, cash operating
      cost and total cost per ounce of silver is net of by-product sales revenue
      (by- product credit were $nil in 2009). We use cash costs per ounce of
      silver, a non-GAAP measure, to manage and evaluate operating performance
      at our Pirquitas mine. See the description of non-GAAP financial
      performance measures in this Item 5.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Revenues are reported net of deductions, treatment and
      refining charges.                                                                                                                                                                                                                                                                                                                                        

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Critical Accounting Estimates

The preparation of our consolidated financial statements in
  conformity with generally accepted accounting principles 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 2010 audited annual consolidated financial
  statements.

Review of asset carrying values and impairment

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 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 the
  necessary 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 property, 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
  forfeiture 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.

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 our 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.

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Determination of ore reserve and mineral resource
  estimates

The Company estimates its ore reserves and mineral resources
  based on information compiled by Competent Persons as defined by NI 43-101.
  Reserves determined in this way are used in the calculation of depreciation,
  amortisation and impairment charges, and for forecasting the timing of the
  payment of close down and restoration costs. In assessing the life of a mine for
  accounting purposes, mineral resources are only taken into account where there
  is a high degree of confidence of economic extraction. There are numerous
  uncertainties inherent in estimating ore reserves, and assumptions that are
  valid at the time of estimation may change significantly when new information
  becomes available. Changes in the forecast prices of commodities, exchange
  rates, production costs or recovery rates may change the economic status of
  reserves and may, ultimately, result in reserves being restated. Such changes in
  reserves could impact on depreciation and amortisation rates, asset carrying
  values and provisions for close down and restoration costs.

Determination of useful lives of property, plant and
  equipment

The Company uses the units of production method to depreciate
  mineral property expenditure, whereby depreciation is calculated using the
  tonnage of ore extracted from the mine in the period as a percentage of the
  total tonnage of ore expected to be extracted in current and future periods
  based on proven and probable reserves. As noted above there are numerous
  uncertainties inherent in estimating ore reserves which is fundamental to this
  calculation.

Valuation of inventory

Stockpiled ore, work in process and finished goods are valued
  at the lower of cost and net realizable value (NRV). NRV is calculated as the
  estimated price at the time of sale based on prevailing and future metal prices
  less estimated future production costs to convert the inventory into saleable
  form. The determination of both estimated future sales price and production
  costs requires significant assumptions that may significantly imapct the stated
  value of the Companys inventory.

Valuation of financial instruments

Under generally accepted accounting principles we are required
  to determine the valuation of our convertible debenture receivable, convertible
  notes (at inception), and the embedded derivatives within our sales contracts.
  The convertible debenture and notes required discounted cash flow analyses and
  option pricing models that involve various estimates and assumptions, whilst the
  valuation of the revenue derivatives requires estimates of settlement dates and
  forward commodity prices.

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 and
      disclosure controls and procedures. 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.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|(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, 2010, management assessed the
      effectiveness of our internal control over financial reporting and
      disclosure controls and procedures and concluded that such internal
      control over financial reporting and disclosure controls and procedures
      were effective and that there were 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, 2010, that have
  materially affected, or are reasonably likely to affect our internal control
  over financial reporting.

Changes in Accounting Policies

Business combinations and related sections

Effective January 1, 2010, we elected to adopt Chartered
  Accountants Handbook (CICA) Handbook Sections 1582, Business Combinations,
  1601, Consolidated Financial Statements, and 1602 Non-Controlling Interests
  on a prospective basis. The adoption of these standards required us to record
  our investment in Pretium initially at fair value, and present non-controlling
  interest within shareholders equity on the balance sheet.

Financial Instruments

Amendments to Canadian Institute of Chartered Accountants
  Handbook (CICA) Handbook Section 3855, Financial Instruments  Recognition
  and Measurement, related to clarification on the recognition of prepayment
  options embedded in a debt instrument and on the calculation of interest on a
  financial asset after recognition of an impairment loss are effective January 1,
  2011 on a prospective basis, with early adoption permitted. We have elected to
  adopt this standard on a prospective basis effective January 1, 2010. The
  adoption of these amendments did not have a material impact on our consolidated
  financial statements.

Recent Accounting Pronouncements

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

International Financial Reporting Standards (IFRS)

In February 2008, the CICA announced that publicly accountable
  enterprises will be required to transition from Canadian GAAP to IFRS for
  interim and annual financial statements effective for fiscal years beginning on
  or after January 1, 2011. This includes a requirement to present comparative
  financial information in accordance with IFRS for 2010. Accordingly, our first
  interim consolidated financial statements will be presented in accordance with
  IFRS for the three months ending March 31, 2011 with 2010 comparative
  results.

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The following table provides a summary of our changeover plan,
  the key activities involved, and the current status of these tasks:

|Key Activities                | Current Status                                                                                                                                                  
|----------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|Financial Reporting           |                                                                                                                                                                 
|                              | Analyze and select accounting policies where
      alternatives are permitted, including IFRS 1 elections                                                       
|                              |                                                                                                                                                                 
|                              | Quantify key differences for opening balance
      sheet                                                                                                        
|                              | Identify and quantify impact on taxation                                                                                                                        
|                              |                                                                                                                                                                 
|                              | Prepare IFRS consolidated financial statements,
      including IFRS 1 reconciliations                                                                          
|                              |                                                                                                                                                                 
|                              | Quantify key differences for 2010 quarterly
      comparatives                                                                                                  
|                              |                                                                                                                                                                 
|                              |                                                                                                                                                                 
|                              |                                                                                                                                                                 
|                              |                                                                                                                                                                 
|Training                      |                                                                                                                                                                 
|                              | Provide technical training to key finance
      personnel and accounting personnel at all site locations                                                        
|                              |                                                                                                                                                                 
|                              |                                                                                                                                                                 
|Business Activities           |                                                                                                                                                                 
|                              | Assess
      impact of conversion on budgeting and forecasts                                                                                                    
|Control Environment           |                                                                                                                                                                 
|                              | Maintain effective controls throughout the IFRS
      conversion process                                                                                        
|                              |                                                                                                                                                                 
|                              | Revise
      control environment for changes in processes and controls as a result of
      transition to IFRS                                                  
|Financial Information Systems |                                                                                                                                                                 
|                              | Determine and implement solution for capturing
      IFRS information throughout 2010 while still reporting in Canadian GAAP
      (i.e. for comparative period)
|                              |                                                                                                                                                                 
|                              | Identify impact on financial systems and
      changes required                                                                                                 
|                              |                                                                                                                                                                 
|                              |                                                                                                                                                                 

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As at December 31, 2010, we have completed our scoping,
  planning, design, solution development and implementation.

We have identified key areas where changes in accounting policy
  are required on our transition from Canadian GAAP to IFRS listed below. This
  list is intended to highlight the areas that we have determined to be the most
  significant that will result from the transition to IFRS. We have not yet
  finalised the impact of these changes on our consolidated statement of income
  (loss), consolidated balance sheet, or cash flow statement and will only be
  reporting quantified differences once approved by the Audit Committee. The IASB
  has significant ongoing projects that could affect the ultimate differences
  between Canadian GAAP and IFRS and these changes may have a material effect on
  the Companys consolidated financial statements.

First-time adoption of IFRS

IFRS 1, First time adoption of International Financial
  Reporting Standards, generally requires that all IFRS standards and
  interpretations be accounted for on a retrospective basis. IFRS 1 provides for
  certain optional exemptions and other mandatory exceptions to this general
  principal. The most significant IFRS optional exemptions which we expect to be
  applying are:

|Exemption                                  | Summary of exemption and decision                                                                                                                                                                                        
|------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|IFRS 2, Share-based payments               | Full retrospective application is avoided for
      certain share-based instruments depending on the grant date, vesting terms
      and settlement of any related liabilities.                                          
|IFRS 3, Business Combinations              | Allows an entity that has conducted prior
      business combinations to apply IFRS 3 on a prospective basis from the date
      of transition. This avoids the requirement to restate prior business
      combinations.
|IAS 21, Cumulative Translation Differences | Allows an entity to deem all cumulative
      translation differences to be zero at the date of transition.                                                                                                              
|IAS 23, Borrowing Costs                    | This exemption allows a first time adopter to
      apply IAS 23(revised) from the date of transition to IFRS for all
      qualifying assets for which the capitalization start date is on or after
      that date.    
|IFRIC 1, Decommissioning liabilities       | This exemption allows a first time adopter to
      utilize a more straightforward methodology for measuring the liability and
      cost of the related asset.                                                          
|Fair value as deemed cost                  | An entity can elect to measure an asset at the
      date of transition to IFRS at its fair value, and use that fair value as
      its deemed cost at that date.                                                        

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Functional currency and foreign currency exchange
  translation

Canadian GAAP requires an entity to determine the functional
  currency of the parent company and then determine whether a subsidiary is an
  integrated or self-sustaining entity. This determination dictates the method of
  foreign exchange translation for the consolidated financial statements.

IFRS requires functional currency to be assessed independently
  for each entity within a consolidated group and introduces the concept of
  primary and secondary factors to help determine the functional currency.

This difference of approach resulted in differences for three
  of our subsidiaries, which will have an impact on foreign exchange gains or
  losses recognized in income and equity. Further, we have elected to apply the
  exemption above, such that the cumulative translation account will be
  reclassified to retained earnings on the date of transition. The impact is an
  increased property, plant and equipment balance of approximately $5 million,
  with the difference being credited to retained earnings.

Fixed assets at deemed cost

We have made a preliminary determination that it is appropriate
  to elect that the fair value of all the assets relating to the Pirquitas mine be
  the deemed cost upon transition to IFRS. At December 31, 2010 we are in the
  process of finalising our assessment of the fair value; any difference between
  the carrying amounts under Canadian GAAP and the IFRS deemed cost will be taken
  to retained earnings at the transition date.

Asset Impairment

Both Canadian GAAP and IFRS require an entity to undertake
  impairment testing where there is an indication of impairment. Annual impairment
  tests are required for goodwill and indefinite-lived intangible assets.

Canadian GAAP provides a two-step approach to testing a
  long-lived asset for impairment if an indication of impairment exists. The first
  step is a test for recoverability whereby the carrying value is compared to the
  undiscounted cash flows that the asset is expected to generate. If the
  undiscounted cash flows exceed the carrying amount, then no impairment charge is
  necessary. If the undiscounted cash flows are lower than the carrying amount of
  the asset, then the asset is written down to the estimated fair value,
  determined based on the discounted cash flows.

Under IFRS, if there is an indication of impairment the entity
  must compare the carrying value of the asset or cash generating unit (CGU) to
  the recoverable amount. Recoverable amount is defined as the higher of an asset
  or CGUs fair value less costs to sell and its value in use. Value in use is the
  present value of the future cash flows expected to be derived from an asset or
  CGU. An impairment loss is recognized to the extent that the carrying value
  exceeds the recoverable amount. Unlike Canadian GAAP, IFRS requires impairment
  charges to be reversed if the circumstances leading to the impairment no longer
  exist.

We have assessed impairment indicators under IFRS as at the
  date of transition for all of our exploration projects and concluded that there
  were no such indicators, which was consistent with Canadian GAAP.

Provision for reclamation and rehabilitation

The primary differences between IFRS and Canadian GAAP for
  reclamation and rehabilitation provisions include the basis of estimation for
  undiscounted cash flows, the discount rate used, the frequency of liability
  re-measurement, and recognition of a liability when a constructive obligation
  exists.

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Canadian GAAP requires the estimate of undiscounted cash flows
  to be based on the amount that a third party would demand to assume the
  obligation, whereas IFRS focuses on the use of managements best estimate of the
  expenditures required to settle the obligation. The recognition principle is
  also broadened with the implementation of IFRS, which requires that a liability
  be recorded if there is a legal or constructive obligation, where Canadian GAAP
  requires a liability to be recognized when there is a legal obligation. These
  GAAP difference have not had a significant impact on our estimates.

The discount rate used to determine the present value of the
  expenditures for Canadian GAAP is the credit-adjusted risk free rate for the
  entity. IFRS requires the use of a discount rate that reflects the risks
  specific to the liability.

In accordance with Canadian GAAP, our provision for reclamation
  and rehabilitation is re-measured when there is a change in the amount or timing
  of cash flows required to settle the obligation. IFRS requires the
  re-measurement of the liability at each reporting date. Although this
  calculation will occur more frequently, it will result in a simplification of
  the process due to the removal of the layering effect under Canadian GAAP. The
  impact is expected to decrease the liability by approximately $1 million.

Convertible notes

Under Canadian GAAP the convertible notes were considered to
  have an embedded share purchase option which was valued separately from the debt
  component and the value attributed to shareholders equity. Following assessment
  of the terms of the convertible notes under IFRS it was concluded that the
  embedded share purchase option should be classified as a derivative liability.
  This change in accounting methodology impacts the classification and measurement
  of the instrument. We are in the process of finalizing our determination of the
  valuation of the instrument.

Share based payments

Canadian GAAP requires that share based payments are measured
  at fair value and an expense recorded over the vesting period of the instrument.
  Our accounting policy under IFRS is largely consistent with Canadian GAAP except
  for the initial inclusion of a forfeiture rate in the fair value estimation, and
  small changes to the initial valuation of tranches of options that vest over
  different periods. We have determined the impact of these changes on our
  consolidated financial statements at the date of transition to IFRS is not
  significant.

Income Taxes

There are a number of GAAP differences related to income taxes,
  the most significant being the calculation of temporary differences on
  non-monetary items and the initial recognition exemption on an asset
  acquisition.

Under Canadian GAAP, deferred tax balances are calculated in
  the currency in which the taxes are denominated and then converted to the
  accounting presentation currency at the current rate. IFRS requires that
  deferred taxes be determined in an entitys functional accounting currency. The
  different treatment under IFRS results in a measurement difference for deferred
  taxes on monetary items where an entitys tax and accounting functional
  currencies differ. This GAAP difference has impacted several of our
  subsidiaries.

IFRS provides an initial recognition exemption such that a
  deferred tax asset or liability is not recognized in the event it arises from
  initial recognition of an asset or liability acquired outside of a business
  combination. This exemption does not exist in Canadian GAAP. The difference is
  expected to result in the derecognition of the deferred tax liability and corresponding
  asset in the range of $35  $40 million, the future income tax impact on the
  aforementioned expected adjustments which are currently under review are not
  quantifiable at this time.

- 83 -

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The discussion above on IFRS outlines to the reader our IFRS
  conversion project and the potential effect on the consolidated financial
  statements. This information does not represent the official adoption of IFRS by
  the Company and is intended only to provide an indication of the major
  differences identified to date based on current IFRS guidance. The proposed IFRS
  1 optional exemptions, the selection of IFRS accounting policies and any related
  adjustments to the consolidated financial statements are in the process of being
  finalised and audited. As a result, the discussion noted above is subject to
  change and any resulting impact to current reported amounts may be significantly
  different from preliminary assessments.

Outstanding Share Data

The authorized capital consists of unlimited common shares
  without par value. As at March 30, 2011, the following common shares, options
  and share purchase warrants were outstanding:

|              |  | Number of  |  |  | Exercise              |  |  | Remaining   | 
|------------- |  | ---------- |  |  | --------------------- |  |  | ----------- | 
|              |  | Shares     |  |  | Price                 |  |  | Life        | 
|              |  |            |  |  | C$                    |  |  | (years)     | 
|Capital stock |  | 80,051,403 |  |  |                       |  |  |             | 
|Stock options |  | 4,044,171  |  |  | $11.50
      - $40.62 |  |  | 0.32 - 9.63 | 
|              |  |            |  |  |                       |  |  |             | 
|Fully diluted |  | 84,095,574 |  |  |                       |  |  |             | 

Subsequent Events

On January 6, 2011, with respect to the sale of
  Snowfield/Brucejack properties to Pretium, the underwriters exercised in part
  the over-allotment option granted to them in connection with the December 2010
  IPO. Pursuant to the terms of the promissory note, proceeds from the
  over-allotment option of $16.7 million (C$17.0 million), after underwriters
  fees was partial repayment of the note. On January 31, 2011 the balance of the
  promissory note was automatically converted into 3,625,500 common shares of
  Pretium in accordance with its terms. Following this conversion our ownership
  interest in Pretium increased to 42.31% .

On February 28, 2011, we entered into a letter agreement with
  Esperanza Resources Corp. (Esperanza) our joint venture partner in respect of
  the San Luis joint venture, to purchase all of Esperanzas remaining interest in
  the San Luis project. Upon completion of the transaction, which is scheduled to
  occur on or before April 30, 2011, we will own 100% of the San Luis Project,
  subject to the 1% net smelter returns royalty granted to Esperanza. See Item 4.B
   Business Overview  Mineral Projects  San Luis Project.

On March 23, 2011, Pretium Resources Inc. filed a preliminary
  prospectus in connection with a proposed sale by us of a portion of our equity
  interest in Pretium. The number of Pretium common shares that we will sell and
  the price at which we will sell such shares, are not determined as of March 28,
  2011, and will be determined based on marketed efforts by the underwriters in
  connection with the proposed offering. The offering is subject to customary
  conditions, including receipt of all necessary regulatory approvals, and is
  scheduled to close in early April, 2011.

- 84 -

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Review of Annual Financial Statements/Results

For the year ended December 31, 2010, we recorded net earnings
  of $346,239,000, ($4.44 per share) compared to a net loss of $13,193,000 ($0.19
  per share) in 2009 and a net loss of $5,946,000 in 2008 ($0.09 per share). The
  following is a summary and discussion on significant components of income and
  expenses recorded during the year compared to the prior year.

2010 Compared to 2009

|                                         |  | 2010    |   |  | 2009   |  
|---------------------------------------- |  | ------- | - |  | ------ | -
|                                         |  | $(000   | ) |  | $(000  | )
|                                         |  |         |   |  |        |  
|Revenue                                  |  | 112,256 |   |  | 5,442  |  
|Cost of sales                            |  | (75,971 | ) |  | (5,926 | )
|Depletion, depreciation and amortization |  | (26,327 | ) |  | (2,039 | )
|Earnings (loss) from mine operations     |  | 9,958   |   |  | (2,523 | )

During the year ended December 31, 2010, we recorded sales
  revenue of $112,256,000 on shipment of 11,161 tonnes of silver concentrate
  containing 5,936,657 ounces of silver with a weighted average realized price of
  $20.92 per ounce, compared to sales revenue of $5,442,000 on shipment of 2,893
  tonnes of silver concentrate containing 460,100 ounces of silver in 2009 with a
  weighted average realized price of $17.49. We commissioned the plant at our
  Pirquitas mine on December 1, 2009 and as result, operating results for the
  prior year are only applicable to the month of December in 2009.

Cost of sales related to concentrate sold during the year ended
  December 31, 2010 was $102,298,000, including non-cash depletion, depreciation
  and amortization of $26,327,000. Cost of sales includes export duties imposed by
  the Argentine government for our silver concentrate sales of $8,739,000 (2009
  -$685,000) which are considered to be in substance a cost of sale rather than
  income tax as they are calculated based on a percentage of revenue. Cost of
  sales related to concentrate sold during the month of December 2009 was
  $7,965,000 including non-cash depletion, depreciation and amortization for
  $2,039,000. Net inventory write-down for the year ended December 31, 2010
  included in cost of sales was $6,700,000 compared to $1,022,000 in the prior
  year.

The improvement in margins from 2009 is due to the improved
  operational efficiency at the mine, a focus on increasing plant throughput and
  recoveries resulting in higher production together with higher silver
  prices.

|                                     |  | 2010   |   |  | 2009   |  
|------------------------------------ |  | ------ | - |  | ------ | -
|                                     |  | $(000  | ) |  | $(000  | )
|                                     |  |        |   |  |        |  
|General and administration           |  | 20,853 |   |  | 10,287 |  
|Stock-based compensation             |  | 8,868  |   |  | 6,319  |  
|Property examination and exploration |  | 2,400  |   |  | 459    |  
|Reclamation and accretion            |  | 1,669  |   |  | 366    |  
|                                     |  | 33,790 |   |  | 17,431 |  

General and administration expenses during 2010 were
  $20,853,000 compared to $10,287,000 in 2009. The increase in general and
  administrative expenses was primarily driven by an increase in staff as we build up our development and production capability, the
  components being an increase in aggregate salaries, employee benefits and
  bonuses of $3,585,000, recruiting costs of $794,000, as well as certain
  termination benefits of $1,788,000. Other contributing factors to the increase
  in general and administrative expenses were one off incentive payments of
  $1,215,000 for staff for participation in the Pretium IPO, the incremental
  valuation of directors DSUs of $660,000, additional travel and project
  consulting together comprising an increase of $691,000.

- 85 -

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Stock-based compensation expense for 2010 was $8,868,000
  compared to $6,319,000 in 2009. Stock-based compensation expense is recognized
  over the vesting period of the options granted. The increase in total
  stock-based compensation from the prior year is due to the amount and timing of
  options awards and in particular reflects options awarded in December 2009, and
  during 2010, to new employees. Stock-based compensation assigned to mineral
  properties during the year was $331,000 compared to $228,000 during 2009. The
  increase in the amount assigned to mineral properties in 2010 compared to 2009
  is the result of an increase in stock options granted to employees working on
  exploration projects during 2010.

Property and examination and exploration expense was $2,400,000
  compared to $459,000 in 2009. During 2010, in line with our accounting policy,
  we recorded $1,609,000 of exploration costs at our operating Pirquitas mine; no
  exploration work had been done there in 2009.

Reclamation and accretion expense in 2010 was $1,669,000
  compared to $366,000 in 2009. The increase over the prior year is mainly
  attributed to higher accretion expense for the Pirquitas mine following an
  upward revision of the reclamation liability estimate at the end of 2010.

|                                 |  | 2010    |   |  | 2009   |  
|-------------------------------- |  | ------- | - |  | ------ | -
|                                 |  | $(000   | ) |  | $(000  | )
|                                 |  |         |   |  |        |  
|Investment income                |  | 1,400   |   |  | 1,100  |  
|Foreign exchange gain            |  | 1,239   |   |  | 4,993  |  
|Interest expense                 |  | (13,916 | ) |  | (1,095 | )
|Share of loss of equity investee |  | (77     | ) |  | -      |  
|                                 |  | (11,354 | ) |  | 4,998  |  

Investment income, which comprises interest and accretion
  expense on the convertible note receivable and other bank interest, was
  $1,400,000 for 2010 compared to $1,100,000 in 2009. This is primarily comprised
  on interest income and accretion income on the convertible debenture receivable
  from Aurcana totalling $1,253,000 (2009 - $999,000), the balance relates to bank
  interest earned.

The foreign exchange gain for 2010 was $1,239,000 compared to a
  gain of $4,993,000 in 2009. Our main exposure to foreign exchange risk is
  related to our net monetary assets denominated in Canadian dollars and
  Argentinean pesos. Following the sale of the Snowfield and Brucejack properties
  in December 2010 we have a significant amount of Canadian dollar cash which
  generated gains due to the strengthening of the Canadian dollar against the U.S.
  dollar. This was offset to an extent due to a weakening Argentine Peso against
  the U.S. dollar, on a net Peso asset balance.

We incurred interest and accretion expense in relation to the
  convertible notes of $13,674,000 in 2010 compared to $12,903,000 in 2009. During
  2009, interest and accretion expense incurred until the start of commercial
  production on December 1, 2009 of $11,808,000 was capitalized to construction in
  progress and thereafter $1,095,000 was recognized as an expense; whereas during
  2010 the full amount was recognised as an expense.

- 86 -

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The share of equity investees loss in 2010 is from our
  investment in Pretium and relates to the period from December 21, 2010 to
  December 31, 2010.

|                                                                         |  | 2010    |   |  | 2009  |  
|------------------------------------------------------------------------ |  | ------- | - |  | ----- | -
|                                                                         |  | $(000   | ) |  | $(000 | )
|                                                                         |  |         |   |  |       |  
|Gain on sale of mineral property and
      property, plant and equipment |  | 402,009 |   |  | 167   |  

We recorded a gain on sale of mineral properties of
  $402,009,000 compared to $167,000 in 2009. The gain in 2010 was primarily due to
  the sales of the Snowfield and Brucejack properties in December 2010, and the
  Silvertip property in February 2010; the gain in 2009 was the result of the sale
  of our remaining interest in the San Juan property located in Mexico.

On December 21, 2010 we completed the sale of our 100% interest
  in the Snowfield and Brucejack properties located in British Columbia, Canada to
  Pretium for total consideration of $442,260,000 (C$450,000,000). Under the terms
  of the transaction we received a total of 32,537,833 common shares of Pretium
  with a fair value of $191,869,000 (C$195,227,000), cash proceeds of $211,322,000
  (C$215,020,000) (before costs of $12,427,000 (C$12,645,000)) and a non-interest
  bearing convertible promissory note in the principal amount of $39,069,000
  (C$39,753,000). This resulted in a gain of $388,761,000 gain (after tax
  $360,612,000).

During February 2010, we completed the sale of our 100%
  interest in the Silvertip property located in British Columbia, Canada to
  Silvercorp. Under the terms of the agreement, Silvercorp paid us total
  consideration of $14,957,000, comprising cash of $7,125,000 and 1,200,000 common
  shares of Silvercorp with a fair value of $7,832,000, for a gain of
  $13,073,000.

The $167,000 gain on sale of mineral properties in the prior
  year was the result of the disposal of our remaining 25% interest in the San
  Juan property located in Durango State, Mexico to Orko Silver Corp. (Orko).
  Under the terms of the agreement we received total consideration of $202,000, in
  the form of 306,000 shares of Orko.

|                                                                                          |  | 2010  |   |  | 2009   |  
|----------------------------------------------------------------------------------------- |  | ----- | - |  | ------ | -
|                                                                                          |  | $(000 | ) |  | $(000  | )
|                                                                                          |  |       |   |  |        |  
|Gain (loss) on sale of marketable
      securities and other investments                  |  | 3,114 |   |  | (1,279 | )
|Unrealized gain (loss) on financial instruments
      held-for-trading                    |  | (102  | ) |  | 412    |  
|Write-down of marketable securities and
      other investments, net of interest received |  | -     |   |  | 534    |  
|Write-down of convertible debenture                                                       |  | -     |   |  | (2,002 | )
|Write down of mineral property                                                            |  | (238  | ) |  | (377   | )
|Other expenses                                                                            |  | (61   | ) |  | -      |  
|                                                                                          |  | 2,713 |   |  | (2,712 | )

In 2010 we recorded a gain on the sale of marketable securities
  and other investments of $3,114,000, compared to a loss of $1,279,000 in 2009.
  The gain in the current year is due to the disposal of 1,200,000 common shares
  of Silvercorp Metals Inc. (Silvercorp) for a gain of $741,000 and the disposal
  of 500,000 common shares of Canplats Resources Corporation (Canplats)
  for a gain of $2,373,000. The loss in the prior year was the result of the
  disposal of our Class A-1 and A-2 asset-backed commercial paper (ABCP)
  investments for a loss of $3,103,000, which was partially offset by a gain of
  $1,824,000 from the sale of 3,300,000 common shares of Minco Silver Corporation
  (Minco), and 135,429 common shares of Allied Nevada Corporation (Allied
  Nevada).

- 87 -

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The revaluation of the conversion feature on our convertible
  debenture receivable generated an unrealized loss on financial instruments
  held-for-trading during the year of $102,000 compared to a gain of $412,000 in
  the prior year.

Write-down of marketable securities and other investments, net
  of interest received was $nil in 2010 compared to $534,000 in 2009. During 2009,
  we were unable to receive a reasonable bid for the remaining ABCP notes upon
  sale of our Class A-1 and A-2 notes and as a result, the remaining carrying
  value of $2,113,000 (net of interest and principal repayments received of
  $2,647,000) was written off.

During 2009, we renegotiated the terms of our convertible
  debenture with Aurcana Corporation (Aurcana) resulting in a reduction in the
  coupon rate from 3% per year to 1.5% in the first year and an increase to 4% per
  year thereafter. As a result, a $2,002,000 write-down of our accrued interest
  and convertible debenture from Aurcana was recorded during 2009 to reflect the
  fair value of the restructured debenture. There were no similar write-downs
  during 2010.

Write-down of mineral properties was $238,000 in 2010 following
  the write off of assets at Pirquitas compared to $377,000 in 2009 during which
  year we allowed our mineral rights for La Bandera project in Mexico and Veca
  project in Peru to lapse.

|                                      |  | 2010    |   |  | 2009  |  
|------------------------------------- |  | ------- | - |  | ----- | -
|                                      |  | $(000   | ) |  | $(000 | )
|                                      |  |         |   |  |       |  
|Current income tax recovery (expense) |  | (2,600  | ) |  | 2,221 |  
|Future income tax recovery (expense)  |  | (20,697 | ) |  | 2,087 |  
|                                      |  | (23,297 | ) |  | 4,308 |  

For the year ended December 31, 2010, we recorded a current
  income tax expense of $2,600,000 compared to a recovery of $2,221,000 in 2009.
  The tax expense during the current year relates to mining operations at
  Pirquitas. During 2009, we generated sufficient loss pools to reverse taxes
  payable of $2,006,000 which was recorded in the prior years. We also finalized
  our tax filing related to the sale of the Shafter Silver project during 2009,
  which resulted in a reduction in our original estimate of income tax expense by
  $900,000.

Future income tax expense during the year was $20,697,000
  compared to a recovery of $2,087,000 in 2009. During 2010, we recognized a
  future income tax expense of $28,149,000 in relation to the common shares and
  convertible note received as consideration for the sale of the Snowfield and
  Brucejack properties, which was offset from future income tax recoveries of
  $8,526,000 from various other investments. We also recorded a future income tax
  recovery of $1,883,000 (2009 $1,034,000), which reflects the tax effects of
  unrealized gains (losses) on our marketable securities during the respective
  years.

- 88 -

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2009 Compared to 2008

|                                         |  | 2009   |   |  | 2008  |  
|---------------------------------------- |  | ------ | - |  | ----- | -
|                                         |  | $(000  | ) |  | $(000 | )
|                                         |  |        |   |  |       |  
|Revenue                                  |  | 5,442  |   |  | -     |  
|Cost of sales                            |  | (5,926 | ) |  | -     |  
|Depletion, depreciation and amortization |  | (2,039 | ) |  | -     |  
|Loss from mine operations                |  | (2,523 | ) |  | -     |  

On December 1, 2009 we commenced commercial production at the
  Pirquitas mine. We recorded sales revenue of $5,442,000 on the shipment of 2,893
  tonnes of silver concentrate containing 460,100 ounces of silver with a weighted
  average realized price of $17.49. There were no sales recorded in 2008.

Cost of sales related to concentrate sold during the month of
  December 2009 was $7,965,000 including non-cash depletion, depreciation and
  amortization for $2,039,000. Net inventory write-down for the period ended
  December 31, 2009 included in cost of sales was $1,022,000.

|                                     |  | 2009   |   |  | 2008   |  
|------------------------------------ |  | ------ | - |  | ------ | -
|                                     |  | $(000  | ) |  | $(000  | )
|                                     |  |        |   |  |        |  
|General and administration           |  | 10,287 |   |  | 9,031  |  
|Stock-based compensation             |  | 6,319  |   |  | 9,601  |  
|Property examination and exploration |  | 459    |   |  | 340    |  
|Reclamation and accretion            |  | 366    |   |  | 318    |  
|                                     |  | 17,431 |   |  | 19,290 |  

General and administration expenses during 2009 were
  $10,287,000 compared to $9,031,000 in 2008. The increase in general and
  administrative expenses was the result of office relocation costs, recruiting
  fees and an increase in aggregate salaries and employee benefits related to
  hiring additional senior staff as we were transitioning to a producing mining
  company.

Stock-based compensation expense for 2009 was $6,319,000
  compared to $9,601,000 in 2008. The decrease in total stock-based compensation
  from prior year was due to fewer unvested stock options outstanding during 2009.
  Stock-based compensation assigned to mineral properties during 2009 was $228,000
  compared to $61,000 during 2008. The increase in the amount assigned to mineral
  properties in 2009 compared to 2008 is the result an increase in stock options
  granted to employees working on the Pitarrilla and San Luis projects during
  2009.

- 89 -

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|                                    |  | 2009   |   |  | 2008   |  
|----------------------------------- |  | ------ | - |  | ------ | -
|                                    |  | $(000  | ) |  | $(000  | )
|                                    |  |        |   |  |        |  
|Investment income                   |  | 1,100  |   |  | 3,039  |  
|Foreign exchange gain               |  | 4,993  |   |  | 200    |  
|Interest expense and financing fees |  | (1,095 | ) |  | (6,499 | )
|                                    |  | 4,998  |   |  | (3,260 | )

Investment income was $1,100,000 for 2009 compared to
  $3,039,000 in 2008. The decrease in investment income is due to a combination of
  factors, including less funds being available for investment and lower yields on
  investments. As a result of significant volatility in the credit markets, we
  opted to mitigate credit risk by investing the majority of our cash and cash
  equivalents in U.S. and Canadian government treasury bills. These treasuries are
  considered to be lower risk and as a result have lower yields.

Foreign exchange gain for 2009 was $4,993,000 compared to
  $200,000 in 2008. With the change in our functional currency from Canadian
  dollars to U.S. dollars effective January 1, 2009, our main exposure to foreign
  exchange risk is related to our net monetary assets denominated in Canadian
  dollars and Argentinean pesos. The foreign exchange gain in 2009 reflects the
  strengthening of the Canadian dollar and Argentinean peso against the U.S.
  dollar. In 2008, our functional currency was the Canadian dollar and the foreign
  exchange gain reflects the strengthening of the U.S. dollar versus the Canadian
  dollar on our net monetary assets denominated in U.S. dollars.

We incurred interest and financing fees of $1,095,000 in 2009
  compared to $6,499,000 in 2008. Interest and accretion cost of $11,808,000
  related to our convertible notes was capitalized to construction in progress
  until the start of production on December 1, 2009. During 2008, we recorded
  $2,726,000 of interest and accretion expense to net loss and $3,773,000 of
  financing fees related to our convertible notes financing.

|                                                                         |  | 2009   |   |  | 2008    |  
|------------------------------------------------------------------------ |  | ------ | - |  | ------- | -
|                                                                         |  | $(000  | ) |  | $(000   | )
|                                                                         |  |        |   |  |         |  
|Gain (loss) on sale of marketable
      securities and other investments |  | (1,279 | ) |  | 2,090   |  
|Unrealized gain on financial instruments held-for-trading                |  | 412    |   |  | 114     |  
|Gain on sale of mineral property                                         |  | 167    |   |  | 31,463  |  
|Write-down of marketable securities and other investments                |  | 534    |   |  | (22,794 | )
|Write-down of convertible debenture                                      |  | (2,002 | ) |  | -       |  
|Write down of mineral property                                           |  | (377   | ) |  | -       |  
|Gain on sale of silver bullion                                           |  | -      |   |  | 23,699  |  
|                                                                         |  | (2,545 | ) |  | 34,572  |  

We recorded a loss on sale of marketable securities and other
  investments of $1,279,000 in 2009 compared to a gain of $2,090,000 in 2008. In
  November 2009, we sold our Class A-1 and A-2 asset-backed commercial paper
  investments for net proceeds of $20,107,000 (C$21,215,000) resulting in a loss
  on sale of $3,103,000. We also recorded a gain on sale of certain marketable
  securities of $1,824,000 in 2009 compared to a gain of $2,090,000 in 2008.

- 90 -

---

The unrealized gain on financial instruments held-for-trading
  during 2009 was $412,000 compared to $114,000 in 2008. The unrealized gain
  during 2009 was the result of revaluation of the conversion feature on our
  convertible debenture. The gain in 2008 consisted primarily of $1,429,000 gain
  on mark-to-market adjustment of foreign exchange options net of $1,389,000 loss
  on revaluation of the conversion feature on our convertible debenture.

We recorded a gain on sale of mineral properties of $167,000 in
  2009 compared to $31,463,000 in 2008. The gain in 2009 was the result of the
  sale of the San Juan property. The gain in 2008 was the result of the sale of
  the Shafter Silver Project in Presidio County, Texas, to Aurcana. The sale
  resulted in a gain on sale of mineral property of $31,463,000 (after-tax gain of
  $18,120,000).

Write-down of marketable securities and other investments, net
  of interest received resulted in income of $534,000 in 2009 compared to a
  write-down of $22,794,000 in 2008. The write-down of marketable securities and
  other investments in 2009 was the result of writing off the carrying value of
  our Class A-1 and Class A-2 asset backed commercial paper, net of interest and
  principal repayments received. This compares to a write-down of our other
  investments of $17,903,000 in 2008. In 2008, we also recorded a write-down of
  available-for-sale marketable securities of $4,891,000 related to a decline in
  fair values determined to be other-than-temporary.

During 2009, we recorded a $2,002,000 write-down of our accrued
  interest and convertible debenture from Aurcana to reflect the fair value of the
  restructured debenture.

We recorded a write-down of mineral properties of $377,000
  during 2009 as we allowed certain of our mineral rights to lapse.

In March 2008, we sold our silver bullion for cash proceeds of
  approximately $39,648,000, resulting in an after-tax gain of $23,699,000. No tax
  expense was recorded as we had sufficient tax pools to offset the taxable gain
  on the sale.

|                           |  | 2009  |   |  | 2008    |  
|-------------------------- |  | ----- | - |  | ------- | -
|                           |  | $(000 | ) |  | $(000   | )
|                           |  |       |   |  |         |  
|Current income tax expense |  | 2,221 |   |  | (14,575 | )
|Future income tax expense  |  | 2,087 |   |  | (3,393  | )
|                           |  | 4,308 |   |  | (17,968 | )

For the year ended December 31, 2009, we recorded a current
  income tax recovery of $2,221,000 compared to an expense of $14,575,000 in 2008.
  The majority of the income tax expense recorded in 2008 relates to the sale of
  the Shafter Silver project.

Future income tax recovery during 2009 was $2,087,000 compared
  to an expense of $3,393,000 in 2008. During 2009, we recorded a future income
  tax recovery of $1,053,000 resulting from a current period loss from our
  Pirquitas operations, which can be used against future taxable income in
  Argentina. We also recorded a future income tax recovery of $1,034,000 (2008 
  expense of $3,393,000), which reflects the tax effects of unrealized gains
  (losses) on our marketable securities during the respective years.

- 91 -

---

Selected Quarterly Data

|                                         |  | 2010    |   |  | 2009   |  
|---------------------------------------- |  | ------- | - |  | ------ | -
|                                         |  | 31-Dec  |   |  | 30-Sep |  
|                                         |  | $(000   | ) |  | $(000  | )
|Revenue                                  |  | 45,077  |   |  | 41,557 |  
|Earnings (loss) from mine operations     |  | 23,949  |   |  | 9,950  |  
|Gain on sale of mineral
      properties |  | 388,936 |   |  | (65    | )
|Earnings (loss)                          |  | 376,575 |   |  | (7,500 | )
|Basic earnings (loss) per
      share    |  | 4.75    |   |  | (0.10  | )
|Dliuted earnings (loss) per share        |  | 4.72    |   |  | (0.10  | )

Sales of silver concentrate commenced in December 2009
  resulting in revenues of $5,442,000 being recorded in the fourth quarter of
  2009. For the year ended December 31, 2010 quarterly revenues have gradually
  increased as the mine has increased production, with noticeable increases in
  output in the third and fourth quarters as well as a significant increase in
  silver prices in the fourth quarter of 2010.

The related cost of sales was $7,965,000 for the month ended
  December 31, 2009 and mine operating margins have consistently been increasing
  through the year ended December 31, 2010 which resulted in positive earnings
  from mine operations for third and fourth quarters.

The main factor impacting earnings (loss) each quarter has been
  significant gains on disposals of mineral properties; we sold Silvertip in the
  first quarter of 2010, and Snowfield and Brucejack in the fourth quarter of
  2010.

We sold our Silvertip property in February 2010 for total
  consideration of $14,957,000 resulting in a gain of $13,073,000, and sold our
  Snowfield and Brucejack properties in December 2010 for a gain of
  $388,761,000.

We also sold marketable securities during the first and third
  quarters of 2010 for proceeds of $2,437,000 and $8,578,000 resulting in gains of
  $2,373,000 and $741,000, respectively. Interest and accretion expense was
  consistent each quarter through 2010 but significantly in excess of 2009 due to
  the fact that most had been capitalised in 2009.

Fourth Quarter Results

During the fourth quarter of 2010, we recorded net earnings of
  $376,575,000 ($4.75 per share) compared to a net loss of $9,126,000 ($0.13 per
  share) for the same quarter of 2009. The net earnings is primarily the result of
  the significant gain on sale of the Snowfield and Brucejack properties of
  $388,761,000, but also supported by earnings from mine operations of $23,949,000
  (2009  loss of $2,523,000).

General and administrative expenditure was $6,819,000 (2009 -
  $2,909,000) due to an increase in staff, bonus payments and termination
  benefits. In the fourth quarter of 2009 we recorded a loss on the sale of other
  investments of $3,103,000, and a write-down of other investments of $2,113,000,
  with no corresponding recognition in 2010. Non-cash stock based compensation of
  $2,521,000 (2009 - $1,549,000) was consistent with the trend throughout 2010,
  and we recorded current and future income tax expense of $29,028,000 (2009 
  expense of $3,341,000) which was due largely to the sale of the Snowfield and
  Brucejack properties in the fourth quarter.

- 92 -

---

During the fourth quarter of 2010 we spent $7,633,000 (2009 -
  $5,669,000) on total sustaining capital expenditures on the Pirquitas project.
  Other significant mineral property expenditures include $1,811,000 (2009
  -$752,000; 2008 - $3,576,000) for Pitarrilla, $781,000 (2009 - $339,000; 2008 -
  $1,912,000) for Diablillos, $781,000 (2009 - $1,677,000; 2008 - $1,698,000) for
  San Luis and $1,509,000 (2009 -$466,000; 2008 - $nil) for Snowfield and
  Brucejack.

| | B. | Liquidity and Capital Resources
| | -- | -------------------------------

At December 31, 2010, we held $232,311,000 (2009 - $26,659,000)
  in cash and cash equivalents and $33,465,000 (2009 - $17,863,000) in marketable
  securities. Working capital at December 31, 2010 was $303,844,000 (2009 -
  $24,515,000).

The increase in cash from 2009 to 2010 is mainly attributed to
  cash inflows of:

- $204,491,000 proceeds from the sale of mineral properties, net of costs;
- $107,758,000 proceeds from equity financings, net of costs;
- $95,800,000 cash receipts from sales;
- $16,318,000 proceeds from share option exercises; and
- $11,015,000 proceeds from the sale of marketable securities.

Offset by cash outflows of:

- $122,820,000 spent on exploration properties, property plant and equipment
    and construction payables (including VAT);
- $102,260,000 payments to suppliers and employees for goods and services;
    and
- $6,210,000 interest paid on long term notes

Summary Cash Flow Information

|                                                       |  | 2010    |   |  | 2009     |   |  | 2008     |  
|------------------------------------------------------ |  | ------- | - |  | -------- | - |  | -------- | -
|                                                       |  | $(000   | ) |  | $(000    | ) |  | $(000    | )
|                                                       |  |         |   |  |          |   |  |          |  
|Cash (used in) operating activities                    |  | (11,110 | ) |  | (39,943  | ) |  | (19,093  | )
|Cash generated by financing activities                 |  | 124,076 |   |  | 146,413  |   |  | 138,719  |  
|Cash generated by (used in) investing
      activities |  | 92,686  |   |  | (151,824 | ) |  | (129,213 | )
|Cash balance, beginning of year                        |  | 26,659  |   |  | 72,013   |   |  | 81,600   |  
|Cash balance, end of year                              |  | 232,311 |   |  | 26,659   |   |  | 72,013   |  

Operating Activities

At December 31, 2010, we had cash resources of $232,311,000
  compared to $26,659,000 in 2009 and $72,013,000 in 2008.

Cash flow used in operations decreased $28,833,000 from
  $39,943,000 in 2009 to $11,110,000 in 2010. We achieved positive cash flows from
  operations for the year ended December 31, 2010, in particular during the third
  and fourth quarters due to increasing production and concentrate sales from
  Pirquitas. Production costs reduced through the course of the year due to
  continued optimization of production, which along with improved silver prices
  enabled the mine to generate positive cash flows. This was in part offset by higher administration and corporate costs due to
  recruiting additional employees, termination payments and bonuses paid to
  officers and employees during the year.

- 93 -

---

The increase in cash flow used in operations from 2008 to 2009
  was mainly attributed to higher administration and corporate costs as we
  continued the development and construction of the Pirquitas mine. Also, we
  incurred a loss from mine operations during December 2009 after the commencement
  of production.

Financing Activities

|                                                                               |  | 2010    |   |  | 2009    |   |  | 2008    |  
|------------------------------------------------------------------------------ |  | ------- | - |  | ------- | - |  | ------- | -
|                                                                               |  | $(000   | ) |  | $(000   | ) |  | $(000   | )
|                                                                               |  |         |   |  |         |   |  |         |  
|Shares issued for cash                                                         |  | 130,707 |   |  | 155,578 |   |  | 2,192   |  
|Share issue costs                                                              |  | (6,631  | ) |  | (9,165  | ) |  | -       |  
|Proceeds from issuance of convertible notes                                    |  | -       |   |  | -       |   |  | 138,000 |  
|Financing costs related to equity portion of convertible
      notes financing |  | -       |   |  | -       |   |  | (1,473  | )
|Cash generated by financing activities                                         |  | 124,076 |   |  | 146,413 |   |  | 138,719 |  

We raised a total of $124,076,000 in 2010 through financing
  activities as compared to $146,413,000 in 2009 and $138,719,000 in 2008.

During 2010, we closed a public share offering of 6,728,755 of
  our common shares at a price of $17.00 per share, for aggregate gross proceeds
  of $114,389,000. After deducting underwriting fees and offering expenses net of
  tax credits of $4,821,000, net proceeds were $109,568,000. Net proceeds from the
  offering have been, and will continue to be, used to fund the development of our
  mineral properties, for working capital requirements, to repay indebtedness
  outstanding and for other general corporate purposes.

In 2010, a total of 971,578 (2009 - 385,632; 2008  186,100)
  shares were issued on the exercise of stock options for total proceeds received
  of $16,318,000 (2009 - $5,578,000; 2008  $2,192,000). The weighted average
  exercise price of options exercised was C$17.00 (2009 - C$15.63; 2008 - C$12.46)
  per share.

Investing Activities

|                                                         |  | 2010    |   |  | 2009     |   |  | 2008     |  
|-------------------------------------------------------- |  | ------- | - |  | -------- | - |  | -------- | -
|                                                         |  | $(000   | ) |  | $(000    | ) |  | $(000    | )
|                                                         |  |         |   |  |          |   |  |          |  
|Expenditures on mineral properties                       |  | (52,912 | ) |  | (25,157  | ) |  | (36,756  | )
|Settlement of payables for property, plant and equipment |  | (50,564 | ) |  | (127,037 | ) |  | (132,919 | )
|Increase in value added tax recoverable
      (net)      |  | (19,344 | ) |  | (23,763  | ) |  | (24,401  | )
|Proceeds from sale of marketable securities              |  | 11,015  |   |  | 24,133   |   |  | 2,780    |  
|Proceeds from sale of silver bullion                     |  | -       |   |  | -        |   |  | 39,648   |  
|Net proceeds from sale of mineral properties             |  | 204,491 |   |  | -        |   |  | 22,435   |  
|Cash generated by (used in) investing
      activities   |  | 92,686  |   |  | (151,824 | ) |  | (129,213 | )

- 94 -

---

A summary of the exploration expenditures by mineral property
  follows:

|                                   |  | 2010   |   |  | 2009   |   |  | 2008   |  
|---------------------------------- |  | ------ | - |  | ------ | - |  | ------ | -
|                                   |  | $(000  | ) |  | $(000  | ) |  | $(000  | )
|                                   |  |        |   |  |        |   |  |        |  
|Berenguela                         |  | 2,559  |   |  | 620    |   |  | 72     |  
|Candelaria                         |  | 289    |   |  | 271    |   |  | 282    |  
|Challacollo                        |  | 711    |   |  | 336    |   |  | 213    |  
|Diablillos                         |  | 2,217  |   |  | 1,656  |   |  | 5,663  |  
|Pitarrilla                         |  | 17,684 |   |  | 4,304  |   |  | 17,866 |  
|San Agustin                        |  | 1,109  |   |  | 466    |   |  | -      |  
|San Luis                           |  | 6,414  |   |  | 5,364  |   |  | 6,549  |  
|Snowfield                          |  | 11,071 |   |  | 10,345 |   |  | 4,643  |  
|Brucejack                          |  | 10,469 |   |  | -      |   |  | -      |  
|Nazas                              |  | 1,336  |   |  | -      |   |  | -      |  
|Other                              |  | 910    |   |  | 963    |   |  | 1,815  |  
|Change in non-cash working capital |  | (1,857 | ) |  | 832    |   |  | (347   | )
|                                   |  |        |   |  |        |   |  |        |  
|                                   |  | 52,912 |   |  | 25,157 |   |  | 36,756 |  

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

During 2010 we spent $50,564,000 (2009 - $127,037,000; 2008 -
  $132,919,000) for development, construction and mining equipment.

Of the total amount spent during the year, approximately
  $12,631,000 was spent in sustaining capital at the Pirquitas mine and
  $37,933,000 was spent in reducing construction related liabilities incurred in
  the previous year. During 2009, approximately $76,968,000 million was incurred
  on construction and mining equipment and $50,069,000 million in development
  costs at the Pirquitas mine.

We incurred $19,344,000 in value added tax (VAT) primarily in
  Argentina related to the Pirquitas mine for the year ended December 31, 2010
  compared to $23,763,000 in the prior year. During the year, we submitted our
  initial applications to the fiscal authorities to begin the process of
  recovering our VAT receivable. As we continue to export our concentrates to
  market, additional VAT applications will be submitted on an ongoing basis to
  recover the remaining balance of VAT receivable.

We received proceeds of $11,015,000 for the sale of marketable
  securities (2009 - $24,133,000; 2008 -$2,780) from the sale of Silvercorp and
  Canplats shares.

We received proceeds of $204,491,000 from the sale of mineral
  properties during the year. In December we sold our Snowfield and Brucejack
  properties to Pretium for cash consideration of $211,322,000 (total of
  C$215,020,000) with net proceeds of $197,564,000 (C$201,021,000) after fees; and
  in February 2010, we completed the sale of our Silvertip Project to Silvercorp
  for cash consideration of $7,125,000 (C$7,500,000) with net proceeds of
  $6,927,000.

We have established internal policies to mitigate our exposure
  to credit risk, including limiting the concentration of credit risk, ensuring a
  minimum credit worthiness of customers and monitoring liquidity of available
  funds. We manage our credit risk on cash and cash equivalents by investing only
  in government obligations and the credit risk associated with these investments
  is considered to be low

- 95 -

---

Operations

Pirquitas Mine, Argentina

During the year ended December 31, 2010, we processed 1,255,261
  tonnes of ore at an average milling rate of 3,439 tonnes per day. This ore
  contained silver head grades of 233 grams/tonne and achieved recoveries of 65.2%
  . The average cash production cost per ounce, which includes direct production
  expenses net of by-products was $12.16. The average cash operating cost per
  ounce, which includes third party smelting, refining and transportation costs,
  royalties and production taxes, was $18.03. Total production cost per ounce
  including depreciation, depletion and amortization was $22.32.

The following information was recorded in each of the quarters
  ended:

|                                             |   |           |  |  |           |  |  |           |  |  |           |  |  | 2010    |  |  | 2009    | 
|-------------------------------------------- | - | --------- |  |  | --------- |  |  | --------- |  |  | --------- |  |  | ------- |  |  | ------- | 
|                                             |   | YTD       |  |  | 31-Dec    |  |  | 30-Sep    |  |  | 30-Jun    |  |  | 31-Mar  |  |  | 31-Dec* | 
|                                             |   |           |  |  |           |  |  |           |  |  |           |  |  |         |  |  |         | 
|Tonnes milled                                |   | 1,255,261 |  |  | 313,051   |  |  | 320,174   |  |  | 345,661   |  |  | 276,375 |  |  | 110,767 | 
|Silver head grades (g/t)                     |   | 233       |  |  | 267       |  |  | 283       |  |  | 240       |  |  | 129     |  |  | 262     | 
|Silver recoveries                            |   | 65.2%     |  |  | 76.3      |  |  | 66.3      |  |  | 63.7      |  |  | 53.2    |  |  | 58.4    | 
|Silver produced (ounces)                     |   | 6,302,140 |  |  | 2,067,438 |  |  | 1,932,978 |  |  | 1,692,466 |  |  | 609,258 |  |  | 545,600 | 
|Silver sold (ounces)                         |   | 5,936,657 |  |  | 1,621,363 |  |  | 2,316,447 |  |  | 1,091,911 |  |  | 906,936 |  |  | 460,100 | 
|                                             |   |           |  |  |           |  |  |           |  |  |           |  |  |         |  |  |         | 
|Revenue (000s)                               | $ | 112,256   |  |  | 45,077    |  |  | 41,557    |  |  | 14,091    |  |  | 11,531  |  |  | 5,442   | 
|                                             |   |           |  |  |           |  |  |           |  |  |           |  |  |         |  |  |         | 
|Average realized silver price (per ounce)    | $ | 20.92     |  |  | 26.93     |  |  | 19.43     |  |  | 18.12     |  |  | 17.43   |  |  | 17.49   | 
|Average London spot silver price (per ounce) | $ | 20.16     |  |  | 26.43     |  |  | 18.96     |  |  | 18.32     |  |  | 16.76   |  |  | 17.67   | 
|                                             |   |           |  |  |           |  |  |           |  |  |           |  |  |         |  |  |         | 
|                                             |   |           |  |  |           |  |  |           |  |  |           |  |  |         |  |  |         | 
|Cash production cost (per oz)                | $ | 12.16     |  |  | 9.47      |  |  | 10.42     |  |  | 11.27     |  |  | 29.32   |  |  | 8.98    | 
|Cash operating cost (per oz)                 | $ | 18.03     |  |  | 16.07     |  |  | 16.94     |  |  | 14.98     |  |  | 36.61   |  |  | 16.57   | 
|Total production cost (per oz)               | $ | 22.32     |  |  | 18.82     |  |  | 20.76     |  |  | 19.24     |  |  | 47.69   |  |  | 20.30   | 

* statistics for December 31, 2009 are for only the month of
  December 2009, following the commencement of commercial production.

We continued to see improved silver production at our Pirquitas
  Mine quarter over quarter in 2010 since the completion of the commissioning
  phase on December 1, 2009. During the fourth quarter, we produced 2,067,438
  ounces of silver, compared to 1,932,978 ounces in the third quarter, 1,692,466
  in the second quarter and 609,258 in the first quarter. This brought total
  production for the year to 6,302,140 ounces. The improving trend in production
  is due to improved recoveries and higher grade zones in the fourth quarter. With
  the increase in production and resulting silver sales, the Pirquitas mine
  reached an important milestone of being cash positive from the third quarter
  until the end of the year.

Cash production cost per ounce declined through 2010, from
  $29.32 per ounce for the first quarter down to $9.47 per ounce in the fourth
  quarter. This has been achieved through increased production and recoveries
  whilst maintaining consistent operating costs. Cash operating costs on a per
  ounce basis were higher in the third and fourth quarters than the second quarter
  primarily due to escalating deductions and refining charges driven by increased
  silver prices. Total production costs mirror this trend through 2010.

- 96 -

---

The open pit mine operated well with 4,360,000 tonnes (47,000
  tonnes per day) being mined in the fourth quarter, which exceeded each of the
  first three quarters of the year which averaged approximately 43,000 tonnes per
  day. This is in line with the project design assumptions.

The mill feed consisted primarily of transitional ore until
  September when sulphide ore from the open pit was fed continuously into the
  process plant for the first time. This represented a key milestone for
  Pirquitas, as the pit sulphide ore represents the life of mine feed for the
  project. The metallurgical response to the sulphide ore has been in line with
  expectations and overall silver recovery rates are achieving feasibility study
  expectations.

Commissioning of the gravity pre-concentration stage commenced
  near the end of the third quarter and results have been encouraging. This has
  lifted the required crushing throughput rate from 4000tpd to 6000tpd, and the
  crushing circuit is in the process of being de-bottlenecked to consistently
  achieve the additional throughput, and the level of upgrading exhibited from the
  process is in line with expectations. Proof of concept for silver recovery has
  been achieved as a result.

We expect production for 2011 to be approximately 8.5 million
  ounces of silver at an average cash production cost of $9.00 per ounce of silver
  (net of by product credits), average cash operating cost of $15.00 per ounce and
  $19.00 per ounce total production costs. Please refer to the cautionary note
  regarding forward looking statements and non-GAAP financial performance measures
  contained in this MD&A.

With the continuous processing of sulphide ore now established,
  the zinc flotation circuit was re-commissioned and we are now making separate
  silver and zinc concentrates, with the first sales of zinc concentrate expected
  in early 2011. We expect to produce approximately 10 million pounds of zinc in
  2011. Please refer to the cautionary note regarding forward looking statements
  and non-GAAP financial performance measures contained in this MD&A.

The tin circuit has been proven capable of producing a tin
  concentrate but despite being able to produce a high grade saleable gravity tin,
  the tin recovery rate is low. Test work is being conducted at a number of
  laboratories globally, with the objective to improve the tin recovery while
  maintaining a good final concentrate tin grade. We will advise through 2011
  progress on the tin circuit.

A total of $1,609,000 was spent on approximately 9,000 meters
  drilling at Pirquitas during the second half of 2010. The majority of the
  diamond drill holes tested for the continuation of silver-tin-zinc
  mineralization beneath the designed bottom of the current open pit. The results
  of the 2010 drilling campaign are deemed to be sufficiently positive to justify
  a follow-up drilling program in 2011, likely to be completed in the first half
  of the year. We will continue drilling at Pirquitas and include results in an
  updated reserves and resources statement in the second half of 2011.

The Pirquitas mine has a fiscal stability agreement with the
  government of Argentina dating from 1998. In 2002, the government of Argentina
  implemented an export duty on concentrates that did not apply to companies with
  pre-existing fiscal stability agreements. In December 2007 the National Customs
  Authority of Argentina levied an export duty of 10% on concentrates for projects
  with fiscal stability agreements predating 2002. We have been advised that the
  project is subject to this export duty despite our rights under our fiscal
  stability agreement from 1998. The legality of the export duty has been
  challenged and is currently under review by the court in Argentina. In July
  2010, we filed a claim in the Federal Court of Jujuy Province for the repayment
  of export duties paid to date and for an order to cease payment of the export
  duty until the matter is decided by the court. The court granted an order
  effective September 29, 2010 to cease payment of the export duty pending the
  courts determination of the legality of export duty. Up to December 31, 2010 the
  Pirquitas mine has paid $6,646,000 in export taxes on concentrate sales and
  accrued for an additional $3,095,000 since we received the order to cease
  payment. The export tax expense has been recorded within cost of sales until a resolution is
  reached, if these duties are recovered in the future we will recognize a gain in
  the statement of earnings for the full amount.

- 97 -

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Exploration

San Luis, Peru

A total of $6,414,000 was spent at the San Luis Joint Venture
  Project in Peru during the year compared to $5,364,000 in 2009 and $6,549,000 in
  2008. The feasibility study on placing the project into production was completed
  in June 2010.

With the completion of the feasibility study, we had vested a
  70% interest in the San Luis Joint Venture. On February 28, 2011 we reached an
  agreement to acquire the remaining interest in the project from our joint
  venture partner Esperanza Resources Corp. Upon completion of the acquisition we
  will own 100% of the San Luis project.

During the year, we continued to negotiate long-term land
  access agreements; submitted the Environmental Impact Study (EIS); and worked
  on the strategy for project execution. In 2011, we will finalize the long-term
  land access agreements and the EIS to enable a construction decision. Presently,
  the San Luis project comprises proven and probable mineral reserves of 0.21
  million ounces of gold and 5.1 million ounces of silver.

Pitarrilla, Mexico

A total of $17,684,000 was spent in 2010 at the wholly-owned
  Pitarrilla Project located in Durango, Mexico, compared to $4,304,000 in 2009
  and $17,866,000 in 2008. As with the San Luís Project, most of this amount was
  spent on a feasibility study that was initiated in the first quarter of 2010 to
  evaluate the economic viability of sulphide mineralization extraction.

A diamond drilling program was completed in the first half of
  the year to provide geotechnical information that was incorporated in the
  feasibility study. The only other exploration work that was completed on the
  property in 2010 consisted of a program of multiple-method geophysical surveying
  over the area covering the known silver deposits. Four different methods of
  geophysical analysis were employed by the surveys, with the objective being to
  determine which methods are able to detect deeply buried, sulphide-associated
  silver mineralization of the form and extent found at Pitarrilla. Not only were
  some of the survey methods successful in outlining the the main body of sulphide
  mineralization of the Breccia Ridge deposit, but they also identified two
  additional zones of anomalous geophysical response which may represent untested
  bodies of sulphide-associated mineralization that will be targeted by future
  drilling, possibly to be done in 2011.

Beginning in the first quarter of 2011, we will be conducting a
  re- evaluation of the technical and economic merits associated with the mining
  and processing of oxidized silver resources that exist in four of the
  mineralized zones at Pitarrilla. The ultimate goal of the program is to define
  sufficient near-surface reserves to support a staged development of the
  Pitarrilla mineral system, where open-pit mining and ore processing of the oxide
  reserves would be conducted concurrently with the development of the Breccia
  Ridge underground sulphide reserves.

Pitarilla has probable mineral reserves of 91.7 million ounces
  of silver, measured and indicated resources of 643.5 million ounces of silver
  and inferred resources of 82.2 million ounces of silver.

- 98 -

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Diablillos, Argentina

A total of $2,217,000 was spent at the wholly-owned Diablillos
  silver-gold project located 275 kilometers south of the Pirquitas Mine in
  northwestern Argentina, compared to $1,656,000 in 2009 and $5,663,000 in 2008.

These expenditures were spent primarily on engineering and
  metallurgical studies done as part of a preliminary economic assessment (PEA)
  of the project that is to be completed in the first quarter of 2011. We are
  evaluating the economic viability of an open-pit mining scenario with a
  conventional milling operation and heap-leach processing of some portion of the
  deposit. A preliminary metallurgical program to assess the heap-leaching
  characteristics of the mineralization at Diablillos has already been completed
  and additional leach test work has been planned for 2011.

Diablillos has indicated mineral resources that total 640,000
  ounces of gold and 77.1 million ounces of silver, with additional inferred
  resources totalling 187,000 ounces of gold and 6.3 million ounces of silver.
  These resources are based on a $10 recovered metal values cut-off, a gold price
  of $700/oz with a recovery rate of 65%, and a silver price of $11/oz with a
  recovery rate of 40%.

San Agustin, Mexico

A total of $1,109,000 was spent at the wholly-owned San Agustin
  project located in Durango State, Mexico compared to $466,000 in 2009 and $nil
  in 2008. A comprehensive program of geophysical surveying was completed over
  most of the property; the main objective was to outline zones of anomalous
  geophysical response that could indicate the lateral and downwards continuation
  of known low-grade gold-zinc-silver mineralization. The geophysical surveys were
  also designed to assess the propertys potential for hosting bodies of
  relatively high-grade polymetallic mineralization.

In addition, a study to evaluate the economic potential of
  heap-leach processing of oxidized, near-surface gold mineralization was
  completed in 2010. A portion of the 5,000-meter diamond drilling program that
  has been planned for 2011 is designed with the objective of expanding the
  oxide gold resource. Detailed metallurgical studies will also be undertaken in
  2011 and will focus on the gold recovery characteristics of the oxide
  mineralization.

Presently, the San Agustin project comprises indicated mineral
  resources of 1.59 million ounces of gold and 47.9 million ounces of silver along
  with inferred resources of 1.06 million ounces of gold and 37.0 million ounces
  of silver.

Nazas, Mexico

A total of $1,336,000 was spent during 2010 ($nil in 2009 and
  2008) at our 100% owned Nazas project which is centered about 18 kilometers east
  of our Pitarrilla project. A major portion of this amount is represented by
  acquisition costs for mineral rights to four claims and the initial cash payment
  made towards an option-to-purchase deal covering the Navidad claim that lies at
  the core of this large property (236 square kilometers). The center of our
  interest at Nazas is an extensive system of epithermal quartz veins, several of
  which are mineralized with gold and/or silver, as well as the potential at depth
  for sulphide-associated silver mineralization similar to that found at the
  Pitarrilla project.

Our exploration of the Nazas property was initiated in the
  second half of 2010 and involved geological mapping, rock sampling and a
  comprehensive program of geophysical surveying with four different survey
  methods being performed. The geophysical surveying will continue into the first
  quarter of 2011, and will be followed by a 7,500- meter diamond drilling
  campaign.

- 99 -

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Snowfield and Brucejack, Canada

The Snowfield and Brucejack projects, which are both located in
  northwestern British Columbia, were wholly-owned by the Company until their sale
  on December 21, 2010 to Pretium for total consideration of C$450 million. We
  retained an ownership interest of 41.27% as at December 31, 2010 (which
  subsequently increased to 42.31% following the conversion of the unpaid portion
  of the promissory note on January 31, 2011).

Prior to their sale in December 2010, a combined total of
  $21,540,000 was spent at both projects in 2010, compared to $10,345,000 in 2009
  and $4,643,000 in 2008.

During the year, we completed a 17,976-meter diamond drilling
  program at Snowfield, which was successful in expanding known gold-copper
  mineralization to the south and southeast where higher copper concentrations
  were encountered (see August 26, September 30 and October 14, 2010 press
  releases for details). Most of the newly defined mineralization occurs in areas
  previously classified as waste in the National Instrument 43-101 compliant
  Preliminary Assessment that was completed during the third quarter and issued on
  September 13, 2010. This report, which did not include results from the 2010
  drilling program, examined the benefits of a mining project that combined the
  mineral resources outlined at Snowfield with those delineated on the adjacent
  Brucejack property.

Last year we also completed a 33,100-meter diamond drill
  program on the Brucejack property which lies immediately south of the Snowfield
  claim group. This drilling program was successful in expanding the Bridge Zone,
  a major zone of gold- and electrum-bearing disseminated and stringer pyrite
  mineralization. In addition, the 2010 drilling was able to expand zones of
  relatively high-grade, quartz vein-associated gold mineralization previously
  identified at the Galena Hill and West Zones.

Non-GAAP Financial Performance Measures

We use the non-GAAP measures of cash production cost per ounce,
  cash operating cost per ounce of silver, total cash cost per ounce of silver and
  total production cost per ounce of silver to manage and evaluate operating
  performance. Although these measures are widely reported in the silver mining
  industry as benchmarks for performance, they do not have a standardized meaning
  and are non-GAAP measures. We believe that these measures, in addition to GAAP
  measures, will be used by investors to evaluate our performance and future
  ability to generate cash flows.

The following tables set forth selected financial and operating
  data from our consolidated financial statements and should be read in
  conjunction with those statements:

- 100 -

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|                                                   |   | 2010      |  |   | 2009        | 
|-------------------------------------------------- | - | --------- |  | - | ----------- | 
|                                                   |   |           |  |   | December(1) | 
|                                                   |   |           |  |   |             | 
|Production Data(2)                                 |   |           |  |   |             | 
|Tonnes milled                                      |   | 1,255,261 |  |   | 110,767     | 
|Silver head grades (grams/tonne)                   |   | 233       |  |   | 262         | 
|Silver recoveries                                  |   | 65.2%     |  |   | 58.4%       | 
|Silver produced (ounces)                           |   | 6,302,140 |  |   | 545,600     | 
|Silver sold (ounces)                               |   | 5,936,657 |  |   | 460,100     | 
|                                                   |   |           |  |   |             | 
|Revenues (3)($000s)                                | $ | 112,256   |  | $ | 5,442       | 
|                                                   |   |           |  |   |             | 
|                                                   |   |           |  |   |             | 
|Average realized silver price (per ounce)          | $ | 20.92     |  | $ | 17.49       | 
|                                                   |   |           |  |   |             | 
|Average London spot silver price (per
      ounce) | $ | 20.16     |  | $ | 17.67       | 
|                                                   |   |           |  |   |             | 
|Cash cost per ounce of silver(4)                   |   |           |  |   |             | 
|                                                   |   |           |  |   |             | 
|Cash production cost                               | $ | 12.16     |  | $ | 8.98        | 
|Cash operating cost                                | $ | 18.03     |  | $ | 16.57       | 
|Total production cost                              | $ | 22.32     |  | $ | 20.30       | 

|(1) | The Pirquitas mine commenced production on December 1,
      2009. As a result, 2009 was our first year of reported revenues and
      production data.                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Since December 1, 2009, the tonnes milled were primarily
      oxide and sulphide ore until September 2010 after which tonnes milled were
      primarily sulphide ore.                                                                                                                          
|(3) | Revenues are reported net of deductions, treatment and
      refining charges.                                                                                                                                                                                                                   
|(4) | The calculation of cash production cost, cash operating cost and total production cost per ounce of silver is net of by-product sales for the year ended December 31, 2010 of $204,000 (2009: $nil). See Item 5.B. Liquidity and Capital Resources  Non-GAAP Financial Performance Measures.

|                                  |  | 2010      |   |  | 2009    |   |  | 2008    |  
|--------------------------------- |  | --------- | - |  | ------- | - |  | ------- | -
|Other financial information       |  | $(000     | ) |  | $(000   | ) |  | $(000   | )
|Revenue                           |  | 112,256   |   |  | 5,442   |   |  | -       |  
|Net earnings (loss)               |  | 346,239   |   |  | (13,193 | ) |  | -       |  
|Basic earnings (loss) per share   |  | 4.44      |   |  | (0.19   | ) |  | (0.09   | )
|Diluted earnings (loss) per share |  | 4.42      |   |  | (0.19   | ) |  | (0.09   | )
|                                  |  |           |   |  |         |   |  |         |  
|Cash and cash equivalents         |  | 232,311   |   |  | 26,659  |   |  | 72,013  |  
|Total assets                      |  | 1,262,017 |   |  | 749,925 |   |  | 567,905 |  
|Working capital                   |  | 303,844   |   |  | 24,515  |   |  | 41,486  |  
|Long-term convertible notes       |  | 118,203   |   |  | 110,739 |   |  | 104,046 |  
|Cash dividends declared           |  | -         |   |  | -       |   |  | -       |  

- 101 -

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The following table provides a reconciliation to cost of sales,
  as reported in our Consolidated Statement of Earnings (Loss):

|                                                                        |  | 2010      |   |  | 2009  |  
|----------------------------------------------------------------------- |  | --------- | - |  | ----- | -
|                                                                        |  | $(000     | ) |  | $/oz  |  
|                                                                        |  |           |   |  |       |  
|Cost of Sales                                                           |  | 75,971    |   |  |       |  
|Inventory adjustment                                                    |  | 879       |   |  |       |  
|Direct production expenses                                              |  | 76,850    |   |  | 12.19 |  
|By-product credits                                                      |  | (204      | ) |  | (0.03 | )
|Cash production costs                                                   |  | 76,646    |   |  | 12.16 |  
|Third party smelting, refining and transportation costs                 |  | 26,792    |   |  | 4.25  |  
|Royalties & production taxes                                            |  | 10,192    |   |  | 1.62  |  
|Cash operating costs                                                    |  | 113,630   |   |  | 18.03 |  
|Depreciation per income statement                                       |  | 18,733    |   |  | 2.97  |  
|Depletion/amortization per income statement                             |  | 7,594     |   |  | 1.20  |  
|Depletion, depreciation and amortization in
      inventory adjustments |  | (431      | ) |  | (0.07 | )
|Reclamation                                                             |  | 1,149     |   |  | 0.18  |  
|Total production costs                                                  |  | 140,675   |   |  | 22.32 |  
|                                                                        |  |           |   |  |       |  
|Production (ounces)                                                     |  | 6,302,140 |   |  |       |  

Financial Instruments

Our activities expose us to a variety of financial risks,
  including credit risk, liquidity risk and market risk. From time to time, we may
  use foreign exchange contracts, commodity price contracts and interest rate
  swaps to manage exposure to fluctuations in foreign exchange, metal prices and
  interest rates. We do not have a practice of trading derivatives. In the past,
  our use of derivatives was limited to specific programs to manage fluctuations
  in foreign exchange risk, which are subject to the oversight of the Board of
  Directors.

Credit Risk

Credit risk arises from the non-performance by counterparties
  of contractual financial obligations. Our credit risk arises primarily with
  respect to our cash and cash equivalents, accounts receivable, convertible
  debenture receivable and value added tax recoverable. We have established
  internal policies to mitigate our exposure to credit risk, including limiting
  the concentration of credit risk, ensuring a minimum credit worthiness of
  customers and monitoring liquidity of available funds.

We manage our credit risk on cash and cash equivalents by
  investing only in government obligations and the credit risk associated with
  these investments is considered to be low. At December 31, 2010, there were no
  significant concentrations of credit risk outside of government bonds and no
  amounts were held as collateral.

- 102 -

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During 2010, we sold all of our concentrate production to one
  customer. Our customer is a large international organization and our credit risk
  associated with trade receivables is considered to be low. We have not
  experienced any bad debts with this customer.

During the year ended December 31, 2009, we negotiated a
  revision to the coupon rate on the Aurcana debenture receivable from 3% per year
  to 1.5% in the first year and 4% per year thereafter. As a result of this
  restructuring, we recorded a write-down of $2,002,000 during the year ended
  December 31, 2009, including $118,000 of accrued interest and $1,884,000 on our
  convertible debenture receivable. All interest payments have been received in
  2010 so no further write-downs have been recorded.

Argentinean law states that valued added tax (VAT) paid is
  recoverable once the company reaches the production stage. We commenced
  production at our Pirquitas property on December 1, 2009 and as a result, we
  have applied to the Argentinean government to begin to recover our VAT.

Our maximum exposure to credit risk in thousands of USD at
  December 31, 2010 is as follows:

|                                 |  | 2010    |  |  | 2009   | 
|-------------------------------- |  | ------- |  |  | ------ | 
|                                 |  | $       |  |  | $      | 
|Cash and cash equivalents        |  | 232,311 |  |  | 26,659 | 
|Accounts receivable              |  | 30,323  |  |  | 6,238  | 
|Convertible debenture receivable |  | 6,794   |  |  | 5,606  | 
|Value added tax recoverable      |  | 70,782  |  |  | 54,095 | 
|                                 |  | 340,210 |  |  | 92,598 | 

*Liquidity Risk*

Liquidity risk is the risk that we will encounter difficulty in
  meeting obligations associated with financial liabilities. We have in place a
  rigorous planning and budgeting process to assist in determining the funds
  required to support our normal operating requirements on an ongoing basis as
  well as our expansion plans. We manage liquidity risk by ensuring sufficient
  resources are available to meet short-term business requirements, taking into
  account our anticipated cash flows from operations and our cash and cash
  equivalent balances.

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. If necessary, we may raise funds
  through the issuance of debt, equity, or monetization of non-core assets. We
  believe our sources will be sufficient to cover our short-term and long-term
  cash requirements.

Contractual obligations

We enter into contracts that give rise to commitments for
  future minimum payments in the normal course of business. The following table
  summarizes the remaining undiscounted contractual maturities of our financial
  liabilities and operating and capital commitments, in thousands of USD, at
  December 31:

- 103 -

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|                                         |  | Less than |  |  | 1 to 3  |  |  | 4 to 5 |  |  | Over 5 |  |  |         | 
|---------------------------------------- |  | --------- |  |  | ------- |  |  | ------ |  |  | ------ |  |  | ------- | 
|                                         |  | 1 year    |  |  | years   |  |  | years  |  |  | years  |  |  | Total   | 
|                                         |  | $         |  |  | $       |  |  | $      |  |  | $      |  |  | $       | 
|                                         |  |           |  |  |         |  |  |        |  |  |        |  |  |         | 
|Accounts payable and accrued liabilities |  | 32,132    |  |  | -       |  |  | -      |  |  | -      |  |  | 32,132  | 
|Asset retirement obligations             |  | 952       |  |  | 2,595   |  |  | 1,674  |  |  | 21,421 |  |  | 26,642  | 
|Long-term convertible note repayments i) |  | -         |  |  | 138,000 |  |  | -      |  |  | -      |  |  | 138,000 | 
|Interest on convertible notes i)         |  | 6,210     |  |  | 15,525  |  |  | -      |  |  | -      |  |  | 21,735  | 
|Capital expenditure commitments ii)      |  | 874       |  |  | 210     |  |  | -      |  |  | -      |  |  | 1,084   | 
|Operating expenditure commitments        |  | 8,332     |  |  | 8,854   |  |  | -      |  |  | -      |  |  | 17,186  | 
|Minimum rental and lease payments        |  | 520       |  |  | 678     |  |  | -      |  |  | -      |  |  | 1,198   | 
|                                         |  | 49,020    |  |  | 165,862 |  |  | 1,674  |  |  | 21,421 |  |  | 237,977 | 

|i)  | Convertible notes are due in 2028 but are 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.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ii) | Subsequent to year end we have entered into a capital
      expenditure commitment for $11.4 million which is expected to be paid
      during 2011.                                                                                 

Our operating expenditure commitments relate to contracts
  entered into in the normal course of business for ongoing mining operations at
  our Pirquitas mine.

Market Risk

| | i) | Foreign Exchange Risk
| | -- | ---------------------

We operate projects in seven different countries and therefore,
  foreign exchange risk exposures arise from transactions denominated in
  currencies other than our functional currency which is the United States dollar.
  Our foreign exchange risk arises primarily with respect to the Canadian dollar
  and Argentine peso.

As at December 31, our exposure to foreign exchange risk in
  currencies other than the U.S. dollar, in thousands of USD, is as follows:

|                  |  | December 31, 2010 | 
|----------------- |  | ----------------- | 
|                  |  | Cash and cash     | 
|                  |  | equivalents and   | 
|                  |  | restricted cash   | 
|                  |  | $                 | 
|Argentinean peso  |  | 9,588             | 
|Australian dollar |  | 151               | 
|Canadian dollar   |  | 164,557           | 
|Mexican peso      |  | 487               | 
|Peruvian soles    |  | 278               | 
|                  |  | 175,061           | 

During the year, we recognized a foreign exchange gain of
  $1,239,000 (2009  $4,993,000; 2008 -$200,000). Based on the above net exposures
  at December 31, 2010, a 10% depreciation or appreciation of the above currencies
  against the U.S. dollar would result in a decrease or increase, respectively, in
  our net earnings by $23,313,000.

- 104 -

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| | ii) | Interest Rate Risk
| | --- | ------------------

Our interest rate risk mainly arises from the interest rate
  impact on our cash and cash equivalents. Cash and cash equivalents earn interest
  based on market rates. Our convertible debenture receivable and long-term notes
  have fixed interest rates and are not therefore exposed to significant interest
  rate risk.

As at December 31, 2010, the weighted average interest rate of
  our cash equivalents investment was 0.89% (2009 - 0.08%) . With other variables
  unchanged, a 1% increase (decrease) in the interest rate would increase
  (decrease) our net earnings by $613,000 (2009 - $643,000).

| | iii) | Commodity Price Risk
| | ---- | --------------------

Our profitability and long-term viability will depend, in large
  part, on the market price of silver, tin, and zinc. 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.

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.

| | C. | Research and Development, Patents and
      Licenses, etc.
| | -- | ----------------------------------------------------------

We are a mineral exploration and development company with only
  one producing property, which achieved production status on December 1, 2009
  and, as such, the information required by this item is inapplicable.

| | D. | Trend Information
| | -- | -----------------

We are a mineral exploration and development company with only
  one producing property, which achieved production status on December 1, 2009
  and, as such, there is no trend information yet for comparison.

- 105 -

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| | E. | 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.

| | F. | Tabular Disclosure of Contractual
      Obligations
| | -- | ---------------------------------------------------

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

| | G. | Safe Harbor
| | -- | -----------

See Note Regarding Forward-Looking Statements.

|Item 6 | Directors, Senior Management and
      Employees
|------ | ------------------------------------------------

| | A. | Directors and Senior Management
| | -- | -------------------------------

The following table lists, as of March 30, 2011, the names of
  our directors and senior management. Each of the directors and senior officers
  has served in his or her respective capacity since his or her election and/or
  appointment and each director will serve until the next annual general meeting
  of shareholders or until a successor is duly elected, unless the office is
  vacated in accordance with our Articles.

|Table No. 30                       
|-----------------------------------
|Our Directors and Senior Management

|                                   | Position with Silver                                           | Date
      of First |    
|---------------------------------- | -------------------------------------------------------------- | ------------------- | ---
|Name                               | Standard                                                       | Appointment         | Age
|A.E. Michael Anglin (5)            | Director                                                       | August 2008         | 56 
|John R. Brodie, FCA (1)(2)(3)      | Director                                                       | January 2006        | 66 
|Richard C. Campbell, MBE (1)(4)(5) | Director                                                       | August 2008         | 64 
|David L. Johnston (1)(4)(5)        | Director                                                       | May 2000            | 71 
|Richard D. Paterson (2)(3)         | Director                                                       | August 2008         | 68 
|Peter W. Tomsett (1)(2)            | Director and Chairman                                          | November 2006       | 53 
|John Smith                         | Director, President and Chief 
      Executive Officer         | August 2010         | 54 
|Joe Phillips                       | Senior Vice President, 
      Operations and
      Development | March 2011          | 59 
|Tom S.Q. Yip (1)                   | Vice President, Finance and CFO                                | July 2007           | 53 
|W. John DeCooman (1)               | Vice President, Business Development                           | June 2009           | 41 
|David L. Smith (1)                 | Vice President, Human Resources                                | December 2009       | 45 
|Kristen G. Riddell (1)             | Vice
      President, Corporate Secretary and General Counsel  | October 2009        | 39 

- 106 -

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|(1) | Resident of Canada                                               
|--- | -----------------------------------------------------------------
|(2) | Member of the Audit Committee                                    
|(3) | Member of the Compensation Committee                             
|(4) | Member of the Corporate Governance and Nominating
      Committee
|(5) | Member of the Safety and Sustainability
      Committee          

Our Board of Directors and Senior Management

The following is a brief description of the business experience
  and principal business activities of our directors and senior management:

A.E. Michael Anglin

Mr. Anglin has been a member of our Board of Directors since
  August 2008, and from January 19, 2010 until August 6, 2010, served as our
  interim President and CEO. Mr. Anglin graduated with a Bachelor of Science
  (Honours) degree in Mining Engineering from the Royal School of Mines, Imperial
  College, London in 1977 and later attained a Master of Science degree from the
  Imperial College in London in 1985. Mr. Anglin spent 22 years with BHP, most
  recently serving as Vice President Operations and Chief Operating Officer of the
  Base Metals Group based in Santiago, Chile, before retiring in 2008.

John R. Brodie, FCA

Mr. Brodie is our audit committee financial expert and the
  Chair of our Audit Committee. Mr. Brodie has been the President of John R.
  Brodie Capital Inc., a private consulting firm, since 2003. From 1975 to 2003,
  Mr. Brodie was a partner at KPMG LLP and from 1987 to 1995 served as a director
  of KPMG LLP. Mr. Brodie graduated from the University of Manitoba with a
  Bachelor of Science degree in 1967 and attended the Stanford Executive Program
  at Stanford University in 1982. He is a member of the Canadian Institute of
  Chartered Accountants, British Columbia Institute of Chartered Accountants and a
  lifetime member of Certified Fraud Examiners. Mr. Brodie was elected a Fellow
  and awarded the FCA designation by the Institute of Chartered Accountants of
  British Columbia in 2003 for distinguished service to the accounting profession.
  Mr. Brodie is also a director of Ag Growth International Inc., Far West Mining
  Inc., Western Coal Corp. and Wildcat Silver Corp.

Richard C. Campbell, MBE

Mr. Campbell is the Chair of our Safety and Sustainability
  Committee. Mr. Campbell graduated with a Bachelor of Science (Honours) degree in
  Geology from Glasgow University in 1969. He spent the following 32 years with
  British Petroleum (BP), most recently serving as President of BP Alaska before
  retiring in 2001. Mr. Campbell was awarded membership of the Order of British
  Empire (MBE) by Queen Elizabeth II in 1994 for his contribution to British
  commercial interests in Colombia while serving as President of BP in
  Colombia.

David L. Johnston

Mr. Johnston is a registered member of the Association of
  Professional Engineers and Geoscientists of British Columbia with a lengthy
  career in senior management at several major Canadian mining companies. Prior to
  his election to our Board, Mr. Johnston was president and general manager from
  1996 to 1999 of Highland Valley Copper Corporation, operator of North Americas
  third largest open pit copper mine. From 1990 to 1996, he served as vice
  president of Cominco Metals, and from 1985 to 1990, he was president of Pine
  Point Mines Ltd., operator of a significant open pit lead-zinc mine in Canadas
  Northwest Territories. Mr. Johnston is also a director of Copper Canyon
  Resources Ltd. and Eagle Plains Resources Ltd. Mr. Johnston graduated with a Bachelor of Applied Science
  degree in Mining Engineering in 1963 and a Master of Science degree in Mineral
  Engineering in 1969.

- 107 -

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Richard D. Paterson

Mr. Paterson is the Chair of our Compensation Committee. Mr.
  Paterson graduated from Concordia University, Montreal with a Bachelor of
  Commerce degree in 1964. Mr. Paterson has been a Managing Director of Genstar
  Capital, a private equity firm specializing in leveraged buyouts, since 1988.
  Before founding Genstar Capital, Mr. Paterson served as Senior Vice President
  and Chief Financial Officer of Genstar Corporation, a NYSE-listed company, where
  he was responsible for finance, tax, information systems and public
  reporting.

Peter W. Tomsett

Mr. Tomsett is the Chair of our Board. Mr. Tomsett graduated
  with a Bachelor of Engineering (Honours) degree in Mining Engineering from the
  University of New South Wales, later attaining a Master of Science (Distinction)
  degree in Mineral Production Management from the Imperial College in London. Mr.
  Tomsett spent 20 years at Placer Dome Inc., most recently serving as President
  and Chief Executive Officer until its acquisition by Barrick Gold Corporation.
  Mr. Tomsett is also Chairman of Equinox Minerals Limited and a director of North
  American Energy Partners Inc. and Talisman Energy Inc.

John Smith

Mr. Smith has over 30 years of varied
  experience in the resources industry. He started his career in the North Sea oil
  industry and has spent the last 18 years with BHP Billiton, most recently as
  Vice President, Resourcing and Development, based in Melbourne, Australia. He
  has worked in various operational, strategic, M&A, and commercial roles
  within BHP Billiton, including over three years as CEO of the BHP Billiton
  Mitsubishi Alliance, which operates one of the worlds largest coal operations
  in the Bowen Basin of Queensland, consisting of nine mines, a port, and 4,000
  employees. Under his leadership, four of the mines completed significant
  expansion projects, one new mine was brought into operation, and a tenth mine
  was developed to within a year of production. He has a BA, Commerce degree from
  Robert Gordon University in Aberdeen, Scotland, and an MBA with Distinction from
  Aberdeen University

Joe Phillips

Mr. Phillips is an international mining executive with over 38
  years of experience in development and operation of mining projects. He has
  lived and worked in 12 countries on four continents and has worked in the large
  scale development and production of gold, silver, phosphate, coal and
  aggregates. Most recently, as the Senior Vice President of Project Development
  for Pan American Silver, Mr. Phillips directed the construction, startup and
  operation of three mines and expansion of a fourth. Mr. Phillips graduated from
  the Colorado School of Mines in Geological Engineering and did graduate studies
  in Business Administration at the University of South Florida. He is a
  registered Professional Engineer and a former director of the Chamber of Mines
  of both Mexico and Chile.

- 108 -

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Tom S.Q. Yip

Mr. Yip has served as our Vice President, Finance and Chief
  Financial Officer since July 2007. Prior to joining Silver Standard, Mr. Yip
  held the position of Vice-President and Chief Financial Officer at Asarco, LLC
  from May 2006 to June 2007. He also worked for 20 years at Echo Bay Mines Ltd.
  and served as its Vice-President, Finance and Chief Financial Officer before the
  company merged with Kinross Gold Corporation in 2003. Mr. Yip is a Chartered
  Accountant and holds a Bachelor of Commerce degree in Business Administration
  from the University of Alberta.

W. John DeCooman

Mr. DeCoomans experience prior to joining Silver Standard in
  2009 includes over 15 years of mining project finance and advisory
  responsibilities at Deutsche Banc, Alex Brown and Standard Bank, as well as
  corporate positions in finance, business development and exploration. Mr.
  DeCooman holds a Bachelor of Science degree from The Pennsylvania State
  University and a Master of Science degree from the Colorado School of Mines.

David L. Smith

Mr. Smith has served as our Vice President, Human Resources
  since December 2009. Prior to joining Silver Standard, Mr. Smith held the
  position of Director of Human Resources  Russia for Kinross Gold Corporation.
  Mr. Smith has also held management positions with Barrick Gold Corporation and
  Motorola Inc. Mr. Smith holds a Bachelor of Arts degree from Brock
  University.

Kristen G. Riddell

Prior to joining Silver Standard, Ms.
  Riddell held the positions of Corporate Secretary with Skye Resources Inc. and
  Legal Counsel and Corporate Secretary with Pan American Silver Corp. She has
  served as legal counsel for other public companies, including Placer Dome Inc.,
  and Westport Innovations Inc. She holds a Bachelor of Arts and Bachelor of Laws
  degree from the University of Manitoba, and is a member of the Society of
  Corporate Secretaries and Governance Professionals.

| | B. | Compensation
| | -- | ------------

Named Executive Officers

Set out  below are
  particulars of compensation paid to the following persons (the Named Executive
  Officers):

|(a) | the Companys chief executive officer (CEO);                                                                                                                                                                                                                                                                                                       
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                      
|(b) | the Companys chief financial officer (CFO);                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                      
|(c) | each of the three most highly compensated executive
      officers, or the three most highly compensated individuals acting in a
      similar capacity, other than the CEO and CFO, at the end of the most
      recently completed financial year whose total compensation was,
      individually, more than $150,000 for that financial year; and
|    |                                                                                                                                                                                                                                                                                                                                                      
|(d) | each individual who would be a Named Executive Officer
      under paragraph (c) but for the fact that the individual was neither one
      of our executive officers nor acting in a similar capacity at the end of
      that financial year.                                                                                                      

As at December 31, 2010, the end of the most recently completed
  financial year of the Company, we had five Named Executive Officers, whose names
  and positions held with us are set out in the summary compensation  table below. In addition, we have
  included in the tables, Dr. Robert A. Quartermain, who served as our President
  and Chief Executive Officer until January 19, 2010, and A.E. Michael Anglin who
  served as our interim President and Chief Executive Officer from January 19,
  2010 until August 6, 2010.

- 109 -

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Compensation Discussion & Analysis

Compensation Philosophy and Principles

The Company recognizes that people are our primary asset and
  our principal source of competitive advantage. The success of the Company
  depends upon a group of highly qualified and motivated executives dedicated to
  the consistent operation and strong long-term performance of the Company. Highly
  skilled and motivated executives greatly enhance the Companys ability to
  produce superior results for its shareholders and to be a leader within its
  industry. In 2010, the Company adopted an Executive Compensation Philosophy, the
  purpose of which is to detail the Companys goals, principles and limitations in
  regard to executive compensation. This philosophy is intended to guide the
  Company in establishing a foundation for executive compensation decisions.
  Executive compensation at the Company is performance-based, driven by the
  achievements of the individual and the Company.

The goal for the Companys executive compensation program is to
  provide a total compensation package that is competitive in the industry,
  flexible, and attracts, motivates and retains experienced and qualified
  executive leadership. The mining industry is very labor competitive and this
  situation may continue for the foreseeable future as the talent pool ages and
  the supply of experienced talent declines. As the Company transitions from an
  exploration stage company to an operating mining company, the necessary
  experienced talent will primarily be drawn from mid-tier and senior producer
  companies within the mining industry.

In order to accomplish its goals and to ensure that the
  Companys executive compensation program is consistent with its stated mission
  and strategy, the Board of Directors has approved the following philosophy
  statements: (1) The Company will provide a competitive and flexible compensation
  program that will attract, motivate and retain the highly qualified individuals
  necessary to grow our business. Our desire is to motivate employees to achieve
  higher levels of performance and to appropriately reward those employees for
  their efforts; and (2) Compensation programs will emphasize a
  pay-for-performance system, in which an individuals long-term compensation
  and career advancement are dependent upon both individual and Company
  performance, with an objective of increasing long-term shareholder value. If the
  individual or the Company does not meet its objectives, awards will be adjusted
  in accordance with pre-established metrics/formulae.

There are four components to the Companys
  pay-for-performance system: base salary; short term incentive compensation;
  long-term incentive compensation; and non-cash compensation.

Base Salary  Annual base salary must be considered in the
  context of the total compensation package. Generally, we will target to be
  competitive within the defined peer group and market place where we compete for
  talent. Salaries are reviewed annually and base salary may be adjusted based on
  changes within the competitive market of our peer group, an individuals
  evaluated performance and his or her direct managers assessment.

Short-term Incentive  The objective of the short term
  incentive program at the Company is to put variable pay at risk, motivate the
  executive to achieve pre-determined objectives and provide a means to reward
  achievement of the annual business plan. The short-term incentive plan is based
  on the achievement of both corporate and individual goals. Corporate goals are
  derived from the Companys annual business plan and are typically 5 - 7 in
  number. Bonuses are scaled depending on actual performance compared to the
  business plan expected performance. Individual goals for senior management are
  developed by the CEO for his direct reports and are typically 2  3 in number.
  Individual goals for the CEO are developed by the Board of Directors. As we
  continue our transition to an operating company, we will continue to strive to
  provide superior compensation for employees who deliver superior results.

- 110 -

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Long-Term Incentive (LTI)  The objective of the LTI program is
  to ensure the appropriate level of long-term reward/risk to motivate executive
  performance and provide retention of senior management. Previously our LTI
  program consisted of only Company stock options. In 2010 our Board of Directors
  approved a new LTI program, commencing in January of 2011. The new LTI program
  for our executive participants includes Performance Share Units (PSUs) in
  addition to stock options. The PSUs are intended to bring better alignment of
  executive risk/rewards measured by total returns to the Companys shareholders
  relative to our defined peer group. Under the new LTI plan, executive
  participants will be eligible for PSU grants on an annual basis, subject to
  Board approval. The PSU's will have a three year cliff-vesting period and the
  potential payout, at the end of the period, will range from 0 to 200% of the
  initial grant, depending on results. The payout will be based on a Total
  Shareholder Return calculation, at the end of the three year vesting period,
  measured against the Total Shareholder Return of our defined peer group. The
  peer group has been established by the Board of Directors and will be reviewed
  annually for continued appropriateness.

Under the Companys Stock Option Plan, grants are made annually
  at market price of the underlying stock and the options vest one-third annually
  on the first, second and third anniversaries of grant. The Board currently
  grants stock options with a term of seven years.

Under the Companys new LTI plan, both PSU and stock option
  grants will be equal in dollar terms and the total value will be based on the
  individuals position in the Company and the individuals base salary.

Non-cash Compensation  In addition to the programs outlined
  above, executives at the Company will be eligible to participate in company
  provided Health and Welfare benefits, annual medical screenings, Retirement
  Savings Programs (Defined Contribution), paid time off and other perquisites.
  The Company reviews these benefits to ensure competitiveness on a periodic
  basis.

Named Executive Officer Compensation

Compensation for each of our Named Executive Officers is
  comprised of a base salary, a short term incentive award and a long-term
  incentive award and non-cash compensation. We have commenced transitioning from
  an exploration company to an operating mining company and have not traditionally
  had revenue; accordingly, our prior compensation program was developed for a
  company without revenue and was designed to provide maximum flexibility in
  determining executive compensation. In general terms, our new compensation
  program is intended to operate in an integrated manner to meet our objectives.
  Previously, in circumstances where we considered it prudent to conserve cash by
  paying salaries and awarding short term incentive bonuses in lower amounts than
  would otherwise be the case, we paid higher long term incentives through stock
  option awards to ensure that the recruitment, retention and reward objectives of
  the compensation program continued to be met.

The production and related revenue from Pirquitas in 2010
  demonstrates our transitioning towards that of an operating mining company. With
  the assistance of external compensation consultants, in 2010 we designed a new
  compensation program which combines elements of our existing program and
  components appropriate for companies of similar size and scope of operations.
  Our goal is to align our compensation plan closer to that of similar sized
  producers to ensure we can attract and retain executive level talent. This new
  plan is comprised of the same core elements and adds new elements in LTI, but
  adjusts the balance of each element, while improving appropriate levels of risk
  / reward for both the Company and participants. The components of our 2010 Named
  Executive Officer Compensation Program are described below.

- 111 -

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Base Salary

The base salary of our Named Executive Officers is designed to
  attract and retain Named Executive Officers that can contribute to our growth
  and to our transition from an exploration company to an operating mining
  company. During the last several years, competition among resource companies for
  skilled executive officers has been intense and the base salaries of newly hired
  Named Executive Officers have been established through negotiation in the market
  place. Base salary levels for each year are determined in March and are used to
  retain Named Executive Officers that contribute throughout the year to our
  growth and transition to an operating mining company. For 2010, base salaries
  for each Named Executive Officer were reviewed by our Compensation Committee and
  changes were approved by the independent members of the Board, in consultation
  with our CEO and based on discussion, analysis and review of data provided by
  the Hay Group on our relative peer group of companies and the PwC Canadian
  mining survey. In 2010, our Compensation Committee established and reviewed our
  peer group of companies, with which to benchmark the base salaries of our Named
  Executive Officers. In mid-2010, a base salary increase was awarded to our newly
  appointed COO, George Paspalas to reflect the elevation of his role within the
  Company. In March 2010, base salary increases were awarded to the Named
  Executive Officers to reflect changes in the labor market, changes in our
  compensation structure and our transition to an operating mining company. The
  Company will continue to monitor relevant market data and our peer group, to
  ensure competitiveness of our base salaries for Named Executive Officers.

On August 1, 2010, the Board of Directors appointed John Smith
  as the Companys President and Chief Executive Officer, and determined Mr.
  Smiths compensation to include a base salary of C$625,000 annually and a
  short-term incentive target of 100% of base salary (actual payout will range
  from 0% to 200% of target based on results). Mr. Smiths annual long-term
  incentive target will be 200% of base salary, comprised of 50% in Stock Options
  and 50% in Performance Share Units. Mr. Smith will be a member of the board of
  directors but will not receive any fees for his role as a director.

Short Term Incentive Award

Short-term incentive awards are used to reward Named Executive
  Officers for their performance during the year and to incentivize such
  individuals for the following year. The awards are comprised of cash bonuses in
  amounts determined by the Compensation Committee, in consultation with our CEO.
  The target annual short term incentive award ranges from 50% to 100% of base
  salary (actual payouts can range from 0 to 200% of Target) for the Named
  Executive Officers. Cash bonuses were awarded to our Named Executive Officers,
  based on the Companys achievement of corporate objectives as well as their own
  personal objectives that were established at the start of the year, as
  determined by our CEO and the Compensation Committee. For the Named Executive
  Officers, the short term incentive awards are weighted 70% for corporate
  objectives and 30% for personal objectives.

The Companys corporate targets for 2010 were measured and
  based on the following factors: production of ounces of silver at the Pirquitas
  Mine; budgeted production costs; completion of feasibility studies and financing
  plans for certain of our mineral projects; exploration reserves increase;
  implementation of our Safe for Life program across the Company; and a
  reduction in environmental and community relations incidents. In 2010, it was
  determined that the Company achieved 84.8% of its corporate objectives out of a
  possible 100%. The Company overachieved on its safety and exploration
  objectives, but did not achieve full expectations on production, production
  cost, feasibility study and financing plans preparation, community relations and
  environmental objectives. The Named Executive Officers achievement of personal
  objective ranged from 75% to 200% of target.

For 2010, the Compensation Committee monitored and made
  improvements to the established short-term incentive award program that sets
  objective and subjective corporate performance goals and personal performance goals for all Named Executive Officers. These
  improvements focused on timing of the objectives-setting process and the format
  of how goals are measured. Annual performance objectives are established through
  consultation amongst the CEO, Named Executive Officers and the Compensation
  Committee, for final approval by the Board. The Compensation Committee will also
  review personal objectives for the CEO and recommend them to the board of
  directors for approval.

- 112 -

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Long Term Incentive Awards

In 2010, the Compensation Committee approved a new long-term
  incentive approach which, as described above, utilizes both stock options and
  Performance Share Units. Stock options are used to retain our Named Executive
  Officers while aligning their interest with those of our shareholders by
  providing incentive to grow the Company and increase the wealth of our
  shareholders, through an increase in our share price. The vesting schedule for
  our stock options is currently as follows: 1/3 of options granted vest one year
  after the date of grant; 1/3 of options vest two years after the date of grant;
  and the final 1/3 of options vest three years after the date of grant. Also in
  2010, the Compensation Committee amended the term of the stock options granted
  on a going-forward basis from 10 years to 7 years to better align with market
  practices. The changes to our compensation program were designed to reflect our
  transition to an operating mining company and to provide a more balanced
  approach to compensation as well as establish an appropriate level of
  risk/reward for executive participants and the Company.

In January of 2011, stock options and PSUs were granted to our
  Named Executive Officers. The number of options granted to each Named Executive
  Officer was reviewed by the Compensation Committee and approved by the Board, in
  consultation with our CEO. The Compensation Committee recommended the grant of
  options after discussion without formal objectives, criteria or analysis, but
  with taking into account individual performance, targets under our new approach
  to LTI, participants ability to contribute to our long term growth and the need
  to retain our Named Executive Officers. The Compensation Committee also approved
  a one-time transition award of PSUs for executive participants, to address the
  transition to the new LTI approach and differences in vesting schedules for
  PSUs from stock options. This one-time award was granted in Performance Share
  Units, with a two year cliff vesting schedule and the grant amount was amount
  equal to 100% of each participants base salary.

Performance Graph

The following chart compares the total cumulative shareholder
  return for $100 invested in common shares of the Company since December 31,
  2006, with the cumulative total return of the S&P/TSX Composite Index for
  the five most recently completed fiscal years of the Company.

- 113 -

---

|Silver Standard Resources Inc.                           
|---------------------------------------------------------
|Comparison of Five Year Total Common Shareholders Return
|(as at December 31 of each year)                         



|                                                |  | 2006   |  |  | 2007   |  |  | 2008  |  |  | 2009  |  |  | 2010   | 
|----------------------------------------------- |  | ------ |  |  | ------ |  |  | ----- |  |  | ----- |  |  | ------ | 
|For the financial years ended                   |  |        |  |  |        |  |  |       |  |  |       |  |  |        | 
|Common Shares of Silver Standard Resources Inc. |  | 100.00 |  |  | 100.70 |  |  | 54.33 |  |  | 64.25 |  |  | 77.68  | 
|S&P / TSX Composite Total Returns Index         |  | 100.00 |  |  | 109.83 |  |  | 73.58 |  |  | 99.38 |  |  | 116.87 | 

Under our existing compensation program, base salary and
  short-term incentive awards for each year are determined in March in conjunction
  with the assessment of our previous year-end results. Long-term incentive awards
  for each year are determined in January for all executive participants, to align
  with the start of the measurement period for PSUs and adhere to appropriate
  taxation regulations. From 2004 to mid-2007, of our Named Executive Officers,
  only Dr. Robert A. Quartermain, Joseph J. Ovsenek and Kenneth C. McNaughton were
  employed by us. During this period their compensation (base salary, short term
  incentive awards and long term incentive awards) increased with the trend for
  this period in the above graph. Midway through 2007, Tom S.Q. Yip and George N.
  Paspalas became executive officers and their base salary and long term incentive
  awards were determined by competitive compensation levels then prevailing in the
  market place. In December 2007, the base salaries of our Named Executive
  Officers increased due to the continued competition for skilled executive
  officers though the trend of the above graph remained flat. For this period,
  short term incentive awards and long term incentive awards decreased from prior
  years for Dr. Robert A. Quartermain, Joseph J. Ovsenek and Kenneth C. McNaughton
  (George N. Paspalas and Tom S.Q. Yip were not employed during the comparative
  period), while the trend line in the above graph remained flat. In December
  2008, base salaries for our Named Executive Officers were not increased and
  short term incentive awards were decreased due to the global financial crisis in
  keeping with the downward trend of the above graph.

- 114 -

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In order to retain
  key employees through the global financial crisis, long term incentive awards
  were increased during that period in contrast to the downward trending graph. In
  mid-2009, base salary increases were awarded to the VP Exploration and the
  Senior VP Corporate Development in keeping with the upward trend in the graph.
  In December 2009, base salary increases were not awarded to the Named Executive
  Officers as the Company was in the process of reviewing its total executive
  compensation program and establishing a compensation peer comparator group. This
  group of peer companies is evaluated on a periodic basis by the CEO, with input
  from the Companys operations leadership, corporate development group,
  independent compensation consultants, the VP of Human Resources and the
  Compensation Committee, who, in turn, recommend the peer group for approval by
  the Board. In 2010, the salaries of Named Executive Officers were increased to
  reflect our changing status and the increasingly competitive market for
  talent.

Option-Based Awards

Prior to adapting our new compensation program, the granting of
  stock options was based on discussion by our Compensation Committee, in
  consultation with our CEO, taking into account market conditions and prior
  option grants. The Compensation Committee, in consultation with our CEO,
  periodically assesses our stock option plan and recommends any proposed
  amendments to our Board of Directors for approval. In accordance with the
  Toronto Stock Exchange requirements, our shareholders are required to reapprove
  the stock option plan every three years.

Summary Compensation Table

The following table is a summary of compensation paid to our
  Named Executive Officers for our most recently completed fiscal year. The
  salaries for the Named Executive Officers are stated in US dollars, but are paid
  in Canadian dollars.

- 115 -

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|Name and
      principal position                                           | Year                         | Salary ($) (1)                           | Option-based awards ($)(11)                    | Non-equity incentive plan compensation ($) | All other compensation(8)($) | Total compensation($)                   
|--------------------------------------------------------------------------- | ---------------------------- | ---------------------------------------- | ---------------------------------------------- | ------------------------------------------ | ---------------------------- | ----------------------------------------
|Annual incentive plans(7)                                                   | Long- term incentiveplans   
|John Smith 
      President and CEO                                         | 2010 
      2009 
      2008 | 252,856 
      N/A 
      N/A            | 5,243,314(3)
      N/A 
      N/A              | 291,290 
      N/A 
      N/A              | Nil 
      N/A 
      N/A    | 48,548 
      N/A 
      N/A            
|A.E. Michael Anglin (9)
      Interim President and CEO                     | 2010 
      2009 
      2008 | 288,004 
      N/A 
      N/A            | Nil 
      N/A 
      N/A                      | Nil 
      N/A 
      N/A                  | Nil 
      N/A 
      N/A    | 165,064(9)
      N/A 
      N/A         
|Dr. Robert A. Quartermain 
      President and
      CEO                    | 2010 
      2009 
      2008 | 122,264 
      372,154 
      398,687(2) | Nil 
      1,480,736(5)
      1,167,917(6)     | Nil 
      Nil 
      93,809               | Nil 
      Nil 
      Nil    | 1,156,223(10)
      11,837 
      12,117
|Tom S.Q. Yip 
      Vice President, Finance and
      CFO                   | 2010 
      2009 
      2008 | 268,958 
      227,671 
      243,902(2) | Nil 
      473,730(5)
      233,583(6)         | 172,754 
      60,967(7)
      23,452      | Nil 
      Nil 
      Nil    | 59,229 
      10,552 
      10,347      
|George N. Paspalas 
      Senior Vice
      President, Operations           | 2010 
      2009 
      2008 | 349,953 
      280,210 
      300,188    | 443,339(4)
      1,274,080(5)
      934,334(6) | 109,719 
      190,280(7)
      79,737     | Nil 
      Nil 
      Nil    | 590,633(10)
      21,804 
      20,828  
|Joseph J. Ovsenek 
      Senior Vice President,
      Corporate Development | 2010 
      2009 
      2008 | 316,536 
      251,022 
      257,974(2) | Nil 
      1,274,080(5)
      934,334(6)       | 238,849 
      131,320(7)
      79,737     | Nil 
      Nil 
      Nil    | 107,777 
      9,030 
      9,674       
|Kenneth C. McNaughton 
      Vice President,
      Exploration              | 2010 
      2009 
      2008 | 252,452 
      186,806 
      187,617(2) | Nil 
      888,791(5)
      389,306(6)         | 186,234 
      70,041 
      46,904        | Nil 
      Nil 
      Nil    | 109,962 
      11,675 
      11,944     

|(1) | Named Executive Officers are remunerated in Canadian
      dollars and amounts contained in this table are converted to US dollars
      using the average US dollar/Canadian dollar exchange rate of 1.0299 for
      2010, 1.142 for 2009 and 1.006 for 2008. Base salaries were: Mr. Smith
      C$260,000 (2009 and 2008  nil); Mr. Anglin C$297,000 (2009 and 2008 
      nil); Mr. Quartermain C$126,000 (2009 - $425,000; 2008 - $425,000); Mr.
      Yip C$277,000 (2009  C$260,000; 2008 - C$260,000); Mr. Paspalas C$360,000
      (2009  C$320,000; 2008  C$320,000); Mr. Ovsenek C$326,000 (2009 -
      C$286,667; 2008 - C$275,000) and Mr. McNaughton C$260,000 ($2009 
      C$213,333; 2008  C$200,000). Base salaries for Messrs. Smith, Anglin and
      Quartermain represent amounts paid for their period of service during the
      year.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | A portion of the salaries of certain of the Named
      Executive Officers was recovered from a related company under a management
      services agreement. The management services agreement was terminated
      during the year ended December 31, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(3) | Option-based compensation is valued using the
      Black-Scholes option pricing model with a grant date of August 13, 2010
      with a grant price of C$17.38/share, an expected volatility of 53%, an
      average risk-free interest rate of 2.96% and an expected life of the
      option of 6.5 years. We selected the Black-Scholes model because it is
      widely used in estimating option based compensation values by Canadian
      public companies. Awards vest one-third per year commencing on the first
      anniversary of the award and have a ten year term.                                                                                                                                                                                                                                                                                   
|(4) | Option-based compensation is valued using the
      Black-Scholes option pricing model with a grant date of June 4, 2010 with
      a grant price of C$18.99/share, an expected volatility of 53%, an average
      risk-free interest rate of 2.85% and an expected life of the option of 6.5
      years. We selected the Black-Scholes model because it is widely used in
      estimating option based compensation values by Canadian public companies.
      Awards vest one-third per year commencing on the first anniversary of the
      award and have a ten year term.                                                                                                                                                                                                                                                                                      
|(5) | Option-based compensation is valued using the
      Black-Scholes option pricing model with a grant date of December 16, 2009
      with a grant price of C$24.41/share, an expected volatility of 55%, an
      average risk-free interest rate of 2.8% and an expected life of the option
      of 6.1 years. We selected the Black-Scholes model because it is widely
      used in estimating option based compensation values by Canadian public
      companies. Awards vest one-third per year commencing on the first
      anniversary of the award and have a ten year term.                                                                                                                                                                                                                                                                                  
|(6) | Option-based compensation is valued using the
      Black-Scholes option pricing model with a grant date of December 11, 2008
      and a grant price of C$11.50/share, an expected volatility of 61%, an
      average risk-free interest rate of 3.0% and an expected life of the option
      of 6.5 years. We selected the Black-Scholes model because it is widely
      used in estimating option based compensation values by Canadian public
      companies. Awards vest one-third per year commencing on the first
      anniversary of the award and have a ten year term.                                                                                                                                                                                                                                                                                   
|(7) | Includes the payment of special recognition bonus
      payments in 2009 of C$92,000 to Mr. Paspalas for the construction
      completion of the Pirquitas Mine, and C$20,000 to Mr. Ovsenek and C$7,500
      to Mr. Yip for financing activities. Annual Incentive bonus awards for the
      2010 fiscal year were determined and paid to the Named Executive Officers
      in 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(8) | All Other Compensation for Named Executive Officers is
      comprised of payments for membership fees, car allowance, term life
      insurance payments and group registered retirement savings plan (RRSP)
      payments made by us on their behalf, as applicable. In 2010 includes
      payments with respect to participation in the Pretium Resources Inc
      (Pretium) Initial Public Offering whereby the company matched the
      executives purchase of Pretium common shares at a rate of 1 for 2
      shares purchased up to a limit of C$50,000 for Messrs. Smith, Yip and
      Paspalas and up to C$100,000 for Messrs. Ovsenek and McNaughton.                                                                                                                                                                                               

- 116 -

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|(9)  | Mr. Anglin was the interim CEO from January 19, 2010
      until August 6, 2010, when Mr. Smith joined the Company. Mr. Anglin
      received $288,004 for services as interim CEO and $165,064 for services as
      a Director, which is disclosed under Directors Compensation,
      below.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Includes termination or resignation payment per
      agreement, vacation payout, memberships and group registered savings
      plan.                                                                                                                                                          
|(11) | There were no general option-based awards made in 2010 to
      Named Executive Officers as the Company transitioned to the new LTI
      program commencing on January 1, 2011.                                                                                                                

Incentive Plan Awards

Outstanding Share-Based Awards and Option Based
  Awards

The following table sets out all option-based awards
  outstanding for each Named Executive Officer at December 31, 2010. Our Named
  Executive Officers do not have any outstanding share-based awards.

|Name                      | Number of securities underlying
          unexercised options (#)   | Option exercise price (C$)                                | Option expiration date                                                                                                   | Value of unexercised in- the-money options(1) ($)                 
|------------------------- | ------------------------------------------------------------------- | --------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------
|John Smith                | 500,000                                                             | 17.38                                                     | Aug
      13, 2020                                                                                                       | 5,243,314(4)                                                      
|A.E. Michael
      Anglin | 50,000                                                              | 29.02                                                     | Aug.
      7, 2013                                                                                                       | -                                                                 
|Dr. Robert A. Quartermain | 200,000 
      400,000 
      100,000 
      100,000 
      125,000 | 21.30 
      35.34 
      36.14 
      11.50 
      24.41 | July 27, 2011 
      Dec. 12, 2011 
      Jan. 19,
      2012(5)
      Jan. 19, 2012(5)
      Jan. 19,
      2012(5)     | 1,309,069 
      - 
      - 
      1,639,855(2) 
      427,307(3) 
|Tom S.Q. Yip              | 150,000 
      50,000 
      30,000 
      40,000                   | 38.88 
      36.14 
      11.50 
      24.41              | July 17, 2012 
      Dec. 18, 2012 
      Dec. 11,
      2018 
      Dec. 16, 2019                                       | - 
      - 
      491,957(2) 
      136,738(3)                    
|George N. Paspalas        | 200,000 
      50,000 
      95,000 
      107,500 
      50,000    | 40.62 
      36.14 
      11.50 
      24.41 
      18.99 | Dec. 31, 2011(5)
      Dec. 31,
      2011(5)
      Dec. 31, 2011(5)
      Dec. 31,
      2011(5)
      Dec. 31, 2011(5) | - 
      - 
      1,557,862(2) 
      367,484(3) 
      443,394(4)
|Joseph J. Ovsenek         | 4,800 
      200,000 
      50,000 
      120,000 
      107,500    | 21.30 
      35.34 
      36.14 
      11.50 
      24.41 | Mar. 17, 2011(6)
      Mar. 17,
      2011(6)
      Mar. 17, 2011(6)
      Mar. 17,
      2011(6)
      Mar. 17, 2011(6) | 31,418 
      - 
      - 
      1,967,826(2) 
      367,484(3)    
|Kenneth C. McNaughton     | 100,000 
      30,000 
      33,334 
      75,000                   | 35.34 
      36.14 
      11.50 
      24.41              | Mar. 17, 2011(6)
      Mar. 17,
      2011(6)
      Mar. 17, 2011(6)
      Mar. 17,
      2011(6)                        | - 
      - 
      546,629(2)
      256,384(3)                     

|(1) | Calculated based on the difference between the market
      price of our shares on the TSX on December 31, 2010 (C$27.81) and the
      exercise price of the option. Converted to US dollars using the US
      dollar/Canadian dollar exchange rate of 0.9946 at December 31,
      2010.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Options awarded during the year ended December 31, 2008
      vest one-third per year commencing on December 11, 2009 and have a ten
      year term                                                                                                                                       
|(3) | Options awarded during the year ended December 31, 2009
      vest one-third per year commencing on December 16, 2010 and have a ten
      year term.                                                                                                                                      
|(4) | Options awarded during the year ended December 31, 2010
      vest one-third per year commencing on August 13, 2011 and June 4, 2011 and
      have a ten year term.                                                                                                                       
|(5) | Options expiry date determined by contractual termination
      benefits.                                                                                                                                                                                                                  
|(6) | Options expiry date determined following
      resignation.                                                                                                                                                                                                                                

- 117 -

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Incentive Plan Awards  Value Vested or Earned During the
  Year

The following table sets out the value of incentive plan awards
  vested or earned during the year ended December 31, 2010.

|Name                      | Option-based awards  Value vested during the year ($) | Share-based awards  Value vested during the year ($) | Non-equity incentive plan compensation  Value earned during the year ($)
|------------------------- | ------------------------------------------------------ | ----------------------------------------------------- | -------------------------------------------------------------------------
|John Smith                | Nil                                                    | N/A                                                   | 291,290                                                                  
|A.E. Michael
      Anglin | Nil                                                    | 58,258(3)                                             | Nil                                                                      
|Dr. Robert A. Quartermain | 831,682(1)
      90,301(2)                             | N/A                                                   | Nil                                                                      
|Tom S.Q. Yip              | 166,336(1)
      28,896(2)                             | N/A                                                   | 172,754                                                                  
|George N. Paspalas        | 665,346(1)
      77,658(2)                             | N/A                                                   | 109,719                                                                  
|Joseph J. Ovsenek         | 665,346(1)
      77,658(2)                             | N/A                                                   | 238,849                                                                  
|Kenneth C. McNaughton     | 277,233(1)
      54,180(2)                             | N/A                                                   | 186,234                                                                  

|(1) | Calculated based on the difference between the market
      price of our shares on the TSX on December 10, 2010 (C$28.29) and the
      exercise price of the option (C$11.50). Converted to US dollars using the
      US dollar/Canadian dollar exchange rate of 1.0094 at December 11,
      2010.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Calculated based on the difference between the market
      price of our shares on the TSX on December 16, 2010 (C$26.59) and the
      exercise price of the option (C$24.41). Converted to US dollars using the
      US dollar/Canadian dollar exchange rate of 1.0059 at December 16,
      2010.
|(3) | Share-based award was in the form of DSUs in Mr.
      Anglins capacity as a director.                                                                                                                                                                                                             

Termination and Change of Control Benefits

Termination Agreement with George Paspalas, Former Chief
  Operating Officer

On December 10, 2010, George Paspalas resigned as Chief
  Operating Officer. Pursuant to the terms of Mr. Paspalas termination agreement,
  Mr. Paspalas was paid an amount equivalent to one times his current annual base
  salary of C$389,400 and C$113,000 for payment in lieu of bonus, based on the
  average annual bonus earned in the three immediately preceding years. Pursuant
  to the terms of the termination agreement with Mr. Paspalas, the Company will
  continue to pay for his BlackBerry expenses for a period of two months from the
  date of termination and health club membership fees until December 31, 2011. The
  Company will also provide Mr. Paspalas with BC Medical Services Plan, Extended
  Health and Life Insurance until December 31, 2011, unless Mr. Paspalas obtains
  new employment. Upon obtaining new employment, the continuation of the existing
  medical, health and life insurance benefits will cease immediately. Under the
  terms of the transition agreement, Mr. Paspalas existing stock options shall
  continue to vest and be exercisable until the end of the termination period,
  which concludes on December 31, 2011, after which all of Mr. Paspalas stock
  options shall expire. In the event of a merger or a take-over of the Company,
  the Stock Option Plan currently in effect at the time of the merger or take-over
  shall govern the rights and obligations in respect of Mr. Paspalas stock
  options.

Resignations of Joseph Ovsenek, Former Senior Vice
  President, Corporate Development and Ken McNaughton, Former Senior Vice
  President, Exploration

In January of 2011, Mr. Joseph Ovsenek and Mr. Ken McNaughton
  resigned as our Senior Vice President, Corporate Development and Senior Vice
  President, Exploration, respectively from Silver Standard Inc. Mr. Ovsenek was
  paid amount for 20 days of vacation owing in 2009 and 2010 and he also received
  a payment of C$245,991 for his 2010 short-term incentive earned.
  Mr. McNaughton was paid C$191,802 for his 2010 short-term incentive earned.

- 118 -

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Contract with Dr. Robert A. Quartermain, Former President
  and CEO

On January 19, 2010, Dr. Quartermain resigned as President and
  CEO. Pursuant to the terms of Dr. Quartermains Agreement, Dr. Quartermain was
  paid an amount equivalent to two times his current annual base salary of
  C$425,000 (C$850,000), C$250,000 for payment in lieu of bonus based on the
  average annual bonus earned in the three immediately preceding years, and a lump
  sum severance payment of C$125,000 (total C$1,225,000). In addition, Dr.
  Quartermain was paid an amount for 12 days vacation pay owing for 2009 and 2010,
  and a C$11,000 matching RRSP contribution for 2010. Pursuant to the terms of the
  transition agreement with Dr. Quartermain, the Company will continue to pay for
  his BlackBerry expenses for a period of two years from the last date of
  employment up to a maximum of C$6,000, certain club membership dues and fees
  until January 31, 2012, excluding all food and beverage charges or fees. The
  Company will also provide Dr. Quartermain with BC Medical Services Plan,
  Extended Health and Life Insurance, and the use of the services provided by
  Corporate Planning Associates or another counseling services provider up to a
  maximum of C$10,000, until January 31, 2012, unless and until, Dr. Quartermain
  obtains new employment. Upon obtaining new employment, the continuation of the
  existing medical, health and life insurance benefits and planning services will
  cease immediately. Under the terms of the transition agreement, Dr.
  Quartermains existing stock options shall continue to vest and be exercisable
  until the end of the severance period, which concludes on January 19, 2012,
  after which all of Dr. Quartermains stock options shall expire with the
  exception of the December 2009 grant of stock options which stock options shall
  continue to vest and be exercisable until December 31, 2012, whereupon such
  options shall expire. In the event of a merger or a take-over of the Company,
  the Stock Option Plan currently in effect at the time of the merger or take-over
  shall govern the rights and obligations in respect of Dr. Quartermains stock
  options.

Named Executive Officer Termination and Change of Control
  Benefits

We have entered into employment agreements with each of our
  Named Executive Officers. Under the terms of the employment agreements, our
  Named Executive Officers are entitled to compensation, based on their
  remuneration at the time, in the event of termination without cause and on a
  change of control. No Named Executive Officer is entitled to compensation on
  resignation, retirement or termination for cause. A change of control, in
  general, occurs when a person or group of persons acting together through a
  transaction or series of transactions beneficially acquire or exercise control
  or direction over 25% or more of our common shares. Any such compensation
  payable to a Named Executive Officer is required to be paid to him within 30
  days of the termination of the Named Executive Officers employment. The events
  selected for triggering payment in connection with termination without cause and
  on a change of control were determined by the Compensation Committee, with
  advice from independent consultants, based on industry standards at the time the
  agreements were entered into with the Named Executive Officers.

In respect of termination without cause, each of our Named
  Executive Officers is entitled to a lump sum payment equal to 24 months of (i)
  base salary, and (ii) the average annual bonus earned by the Named Executive
  Officer in the three immediately preceding years. The table below sets out the
  estimated incremental payments, payables and benefits due to each of the Named
  Executive Officers on termination without cause assuming termination on December
  31, 2010.

- 119 -

---

|Name                           | Base
          Salary(1)(3) ($) | Bonus(2)(3) ($) | Option-Based Awards ($) | All Other Compensation ($) | Total ($)
|------------------------------ | ------------------------------- | --------------- | ----------------------- | -------------------------- | ---------
|John Smith                     | 1,243,250                       | 513,877         | -                       | -                          | 1,757,127
|Tom S.Q. Yip                   | 557,008                         | 177,655         | -                       | -                          | 734,663  
|George N.
      Paspalas(4)    | 724,747                         | 278,370         | -                       | -                          | 1,003,117
|Joseph J.
      Ovsenek(5)     | 655,540                         | 322,380         | -                       | -                          | 977,920  
|Kenneth C.
      McNaughton(5) | 522,823                         | 215,691         | -                       | -                          | 738,514  

|(1) | 24 months base salary for all Named Executive
      Officers.                                                                                                     
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Two times the average annual bonus earned by the Named
      Executive Officers in the three immediately preceding years.                                          
|(3) | Lump sum payments are paid in Canadian dollars, amounts
      are converted using the US dollar/Canadian dollar exchange rate of 0.9946
      at December 31, 2010.
|(4) | George Paspalas resigned effective as of January 7,
      2011.                                                                                                    
|(5) | Joseph Ovsenek and Kenneth McNaughton resigned effective
      as of February 15, 2011.                                                                            

If within 12 months following a change of control, a Named
  Executive Officers employment is terminated without cause, or a Named Executive
  Officer terminates his employment for Good Reason (as described below), each of
  our Named Executive Officers, is entitled to a lump sum payment equal to 24
  months of (i) base salary, and (ii) the average annual bonus earned by the Named
  Executive Officer in the three immediately preceding years. In addition, if on a
  change of control, the acquiring company does not exchange options held by a
  Named Executive Officer for the acquiring companys stock options without a
  material financial loss to the Named Executive Officer, any outstanding unvested
  options granted to the Named Executive Officer under our stock option plan shall
  become 100% vested and exercisable on the Named Executive Officers last day of
  employment.

Good Reason will arise within 12 months following a change of
  control where a Named Executive Officer is induced to resign or terminate his
  employment for, amongst other reasons, an adverse change in his position,
  duties, or responsibilities, or reporting relationship that is inconsistent with
  his title or position, a reduction of his base salary, or aggregate level of
  benefits, or relocation of his principal office outside of Vancouver, British
  Columbia.

Each Named Executive Officer is required to (a) not disclose or
  use for any purpose any of our confidential information following termination
  and (b) sign a full release acceptable to us prior to receiving any payment as a
  result of termination following a change of control.

The table below sets out the estimated incremental payments,
  payables and benefits due to each of the Named Executives Officers for
  termination on a change of control assuming termination on December 31, 2010.

|Name                           | Base
          Salary(1)(4) ($) | Bonus(2)(4) ($) | Option-Based Awards(3)(4) ($) | All Other Compensation ($) | Total ($)
|------------------------------ | ------------------------------- | --------------- | ----------------------------- | -------------------------- | ---------
|John Smith                     | 1,243,250                       | 513,877         | 5,243,314                     | -                          | 7,000,441
|Tom S.Q. Yip                   | 557,008                         | 177,655         | 628,695                       | -                          | 1,363,358
|George N.
      Paspalas(5)    | 724,747                         | 278,370         | 1,925,347                     | -                          | 2,928,464
|Joseph J.
      Ovsenek(6)     | 655,540                         | 322,380         | 2,366,728                     | -                          | 3,344,648
|Kenneth C.
      McNaughton(6) | 522,823                         | 215,691         | 803,014                       | -                          | 1,541,528

|(1) | 24 months base salary for Named Executive
      Officers.                                                                     
|--- | -------------------------------------------------------------------------------------------------------------------------------
|(2) | Two times the average annual bonus earned by all Named
      Executive Officers in the three immediately preceding
      years.

- 120 -

---

|(3) | Assumes no exchange of options held by Named Executive
      Officers for acquiring companys stock options and the vesting of all
      outstanding options. Calculated based on the difference between the market
      price of our shares on the TSX on December 31, 2010 (C$27.81) and the
      exercise price of the option.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Lump sum payments are paid in Canadian dollars, amounts
      are converted using the US dollar/Canadian dollar exchange rate of 0.9946
      at December 31, 2010.                                                                                                                                                                
|(5) | George Paspalas resigned effective as of January 7,
      2011.                                                                                                                                                                                                                                                                    
|(6) | Joseph Ovsenek and Kenneth McNaughton resigned effective
      as of February 15, 2011.                                                                                                                                                                                                                                            

Director Compensation

2010 Director Compensation Table

The following table sets out all amounts of compensation
  provided to our directors, other than Mr. John Smith, our President and CEO and
  Dr. Robert A. Quartermain our former President and CEO, for the year ended
  December 31, 2010.

|Name                           | Fees earned ($)(1) | Share-based awards(1)(2) ($) | Option-based awards ($) | All other compensation ($)(4) | Total ($)(1)
|------------------------------ | ------------------ | ---------------------------- | ----------------------- | ----------------------------- | ------------
|A.E. Michael
      Anglin      | 58,258             | 58,258                       | -                       | 48,548                        | 165,064     
|John R. Brodie,
      FCA      | 72,823             | 58,258                       | -                       | 48,548                        | 179,629     
|Richard C.
      Campbell, MBE | 61,365             | 58,258                       | -                       | 48,548                        | 168,201     
|R.E. Gordon
      Davis(3)     | 21,126             | 29,129                       | -                       | -                             | 50,255      
|David L. Johnston              | 53,403             | 58,258                       | -                       | -                             | 111,661     
|Richard D.
      Paterson      | 58,258             | 58,258                       | -                       | 48,548                        | 165,064     
|Peter W. Tomsett               | 121,371            | 116,516                      | -                       | 48,548                        | 286,435     

|(1) | All amounts are paid in Canadian dollars. Directors are
      remunerated in Canadian dollars and amounts contained in this table were
      converted to US dollars using the average US dollar/Canadian dollar
      exchange rate of 1.0299 for 2010.                                                                                                                                    
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Our board of directors adopted a deferred share unit plan
      effective July 1, 2008.                                                                                                                                                                                                                                                                                                     
|(3) | Mr. Davis retired from the Board on May 11,
      2010.                                                                                                                                                                                                                                                                                                                                     
|(4) | Payments with respect to the participation by the
      directors in the initial public offering (IPO) of Pretium Resources Inc.
      (Pretium), whereby for every two shares of Pretium a director purchased
      in the IPO, the Company would purchase one share on the directors behalf,
      up to a maximum number of shares purchased by the Company equal to
      C$50,000.

Our Board of Directors adopted a deferred share unit (DSU)
  plan effective July 1, 2008 to more closely align the interests of our directors
  with the interests of our shareholders. With the adoption of the DSU plan, our
  directors will no longer receive option awards, other than a one-time grant on
  appointment to the board of directors at the discretion of our Compensation
  Committee. Under our DSU plan, (a) directors are awarded annual DSU grants and
  directors may elect to receive all or a portion of their annual retainer fees in
  DSUs, (b) the number of DSUs to be received is calculated by dividing the dollar
  value of the DSUs to be received by the market price of our common shares on the
  date the DSUs are credited to a directors account, (c) DSUs are credited to a
  directors account pro rata on a quarterly basis and (d) DSUs cannot be redeemed
  until the director ceases to be a member of the board of directors. Upon
  redemption of DSUs, we will pay to a director a lump sum cash amount equal to
  the aggregate number of DSUs that have been credited to the account of that
  director multiplied by the market price of our common shares at the time of
  redemption.

The following table provides a breakdown of fees earned by our
  directors, other Mr. John Smith, our President and CEO, for the year ended
  December 31, 2010. The directors may elect to have their fees paid in cash or
  DSUs.

- 121 -

---

|Name                       | RetainerFee($)(2) | CommitteeRetainerFee($)(2)(4) | CommitteeChairRetainer Fee($)(2)(4) | LeadDirector/BoardChair Fee($)(2) | Total FeesEarned($)(2) | Fees takenin DSUs($)(1)(2) | FeesTaken inCash($)(2)
|-------------------------- | ----------------- | ----------------------------- | ----------------------------------- | --------------------------------- | ---------------------- | -------------------------- | ----------------------
|A.E.
      Michael Anglin  | 43,694            | 14,564                        | -                                   | -                                 | 58,258                 | 58,258                     | -                     
|John
      R. Brodie, FCA  | 43,694            | 14,564                        | 14,565                              | -                                 | 72,823                 | 21,847                     | 50,976                
|Richard C. Campbell, MBE   | 43,694            | 7,962                         | 9,709                               | -                                 | 61,365                 | 30,682                     | 30,683                
|R.E.
      Gordon Davis(3) | 15,845            | 1,760                         | 3,521                               | -                                 | 21,126                 | 10,563                     | 10,563                
|David L. Johnston          | 43,694            | 9,709                         | -                                   | -                                 | 53,403                 | 26,701                     | 26,702                
|Richard D. Paterson        | 43,694            | 4,855                         | 9,709                               | -                                 | 58,258                 | 58,258                     | -                     
|Peter W. Tomsett           | -                 | -                             | 14,565                              | 106,806                           | 121,371                | 121,371                    | -                     
|Robert A. Quartermain(5)   | 13,661            | -                             | -                                   | -                                 | 13,661                 | 13,661                     | -                     

|(1) | Under our deferred share unit plan, a director may elect
      to receive all or a portion of his annual retainer fees as DSUs.                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Directors are remunerated in Canadian dollars and amounts
      contained in this table were converted to US dollars using the average US
      dollar/Canadian dollar exchange rate of 1.0299 for 2010.
|(3) | Mr. Davis resigned as a director as of May 11, 2010 and
      redeemed his DSUs on September 20, 2010.                                                                                                 
|(4) | Search Committee Fees were also paid to John R. Brodie
      (C$10,000), A.E. Michael Anglin (C$10,000) and Peter W. Tomsett
      (C$15,000).                                                          
|(5) | Dr. Quartermain was granted DSUs as a non-executive
      Board Member until his resignation on May 11, 2010 and redeemed his DSUs
      on September 9, 2010.                                        

For 2010, each of our directors, save for Mr. Tomsett, received
  an annual director retainer of C$45,000; each committee member, excluding the
  committee chair, received an annual retainer of C$5,000; the Audit Committee
  chair received an annual retainer of C$15,000; and the other committee chairs
  received an annual retainer of C$10,000. Mr. Tomsett, as the chair of our board
  of directors, receives an annual board chair retainer fee of C$110,000, in place
  of the annual director retainer fee, annual committee member retainer fee and
  annual committee chair retainer fee.

The Compensation Committee reviews board compensation on an
  annual basis and recommends revisions to the annual retainers paid to the board
  of directors when warranted in the circumstances. In addition, the Board of
  Directors may award special remuneration to any director undertaking any special
  services on our behalf other than services ordinarily required of a
  director.

Outstanding Option Based Awards

The following table sets out all option-based awards
  outstanding for each of our directors, other than Mr. John Smith, our President
  and CEO (who in 2010 received no additional compensation for his service as a
  director) at December 31, 2010.

|Option-based Awards           
|------------------------------
|Name                          
|A.E. Michael
      Anglin     
|John R. Brodie, FCA           
|Richard C.
      Campbell, MBE
|R.E. Gordon Davis             

- 122 -

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|Option-based
      Awards
|-------------------------
|Name                     
|David L. Johnston        
|Richard D. Paterson      
|Peter W. Tomsett         

|(1) | Calculated based on the difference of the market price of
      our shares on the TSX on December 31, 2010 (C$27.81) and the exercise
      price of the option. Converted to US dollars using the US dollar/Canadian
      dollar exchange rate of 0.9946 at December 31, 2010.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Option expiry determined following the resignation of Mr
      Davis.                                                                                                                                                                                                           

Outstanding Share-Based Awards

The following table sets out the value of share based awards
  outstanding for each of our directors, other than Mr. John Smith our current
  President and CEO (who received no additional compensation for his services as a
  director), as at December 31, 2010.

|Name                           | Number of Deferred Share Units (DSUs)(#) | Value of DSUs ($)(1)
|------------------------------ | ------------------------------------------ | --------------------
|A.E. Michael
      Anglin      | 13,042                                     | 364,663             
|John R. Brodie,
      FCA      | 9,535                                      | 266,600             
|Richard C.
      Campbell, MBE | 10,974                                     | 306,851             
|David L. Johnston              | 11,696                                     | 327,022             
|Richard D.
      Paterson      | 14,452                                     | 404,088             
|Peter W. Tomsett               | 30,663                                     | 857,362             

|(1) | DSUs are only redeemable into cash upon a director
      ceasing to be a member of the board. Calculated based on the market price
      of our shares on the TSX on December 31, 2010 (C$27.81). Converted to US
      dollars using the US dollar/Canadian dollar exchange rate of 0.9946 at
      December 31, 2010.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Incentive Plan Awards - Value Vested or Earned During the
  Year

The following table sets out the value of incentive plan awards
  for each of our directors, other than Mr. John Smith our current President and
  CEO (who received no additional compensation for his services as a director),
  vested or earned during the year ended December 31, 2010.

|Name                           | Option-based awards  Value vested during the year ($) | Share-based awards  Value vested during the year ($)(1) | Non-equity incentive plan compensation  Value earned during the year ($)
|------------------------------ | ------------------------------------------------------ | -------------------------------------------------------- | -------------------------------------------------------------------------
|A.E. Michael
      Anglin      | -                                                      | 116,516                                                  | N/A                                                                      
|John R. Brodie,
      FCA      | -                                                      | 80,105                                                   | N/A                                                                      
|Richard C.
      Campbell, MBE | -                                                      | 88,940                                                   | N/A                                                                      
|R.E. Gordon
      Davis(2)     | -                                                      | 39,692                                                   | N/A                                                                      
|David L. Johnston              | -                                                      | 84,959                                                   | N/A                                                                      
|Richard D.
      Paterson      | -                                                      | 116,516                                                  | N/A                                                                      

- 123 -

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|Name                           | Option-based awards  Value vested during the year ($) | Share-based awards  Value vested during the year ($)(1) | Non-equity incentive plan compensation  Value earned during the year ($)
|------------------------------ | ------------------------------------------------------ | -------------------------------------------------------- | -------------------------------------------------------------------------
|Peter W. Tomsett               | -                                                      | 237,877                                                  | N/A                                                                      
|Robert A.
      Quartermain(3) | -                                                      | 25,489                                                   | N/A                                                                      

|(1) | Deferred share units vest immediately and are credited to
      each directors account pro-rata on a quarterly basis.                                                            
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | R. E. Gordon Davis redeemed his DSUs on September 2,
      2010. The market value at the date of redemption was C$18.78, for total
      proceeds of USD$156,052 (C$164,161.61). 
|(3) | Robert A. Quartermain redeemed his DSUs on September 9,
      2010. The market value at the date of redemption was C$19.06, for total
      proceeds of USD$24,678 (C$25,488.75).

Options to Purchase Securities from Company or
  Subsidiaries

Options Outstanding

Stock options to purchase our securities are granted to our
  directors (upon their appointment) and employees on terms and conditions
  acceptable to the regulatory authorities in Canada. At our annual general
  meeting held on May 14, 2008, our shareholders approved a stock option plan that
  reserves 10% of our issued and outstanding shares for issuance on exercise of
  stock options, including previously granted stock options.

Under our stock option plan, (a) the maximum number of shares
  reserved for issuance under the plan is 10% of our issued and outstanding
  shares, (b) stock options in favor of any one individual may not exceed 5% of
  the issued and outstanding shares of common shares, (c) no stock option is
  transferable by the optionee other than by will or the laws of descent and
  distribution, (d) a stock option is exercisable during the lifetime of the
  optionee only by such optionee, (e) the maximum term of each stock option is ten
  years, with the vesting period determined at the discretion of the board of
  directors and (f) the minimum exercise price for a stock option is equal to the
  greater of the (i)closing price of the Companys shares on the Toronto
  Stock Exchange on the day preceding the date of grant; and (ii)the
  volume weighted average trading price of the common shares of the Company on the
  Toronto Stock Exchange, calculated by dividing the total value by the total
  volume of common shares traded, for the five trading days immediately preceding
  the granting of the option.

The number of stock options and the number of common shares
  subject to such stock options granted to officers and senior management as a
  group, to directors who are not officers or senior management as a group and
  employees and consultants as a group are set out below as of December 31, 2010.
  The exercise price of the stock options is stated in Canadian dollars.

|Table No. 31             
|-------------------------
|Outstanding Stock Options

|                                      | Number of Options                                                                |                                                                              |                                                                                                                                       
|------------------------------------- | -------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------
|                                      | Outstanding                                                                      | Exercise Price                                                               | Expiry Date                                                                                                                           
|Officers and 
      Senior Management | 204,800 
      700,000 
      200,000 
      150,000 
      280,000 
    378,334 | $21.30 
      $35.34 
      $40.62 
      $38.88 
      $36.14 
      $11.50 | July 27, 2011 
      December
      12, 2011 
      May 3, 2012 
      July 17, 2012 
      December 18, 2012 
      December 11, 2018

- 124 -

---

|                                                                  | Number of Options                                                                                                                                                 |                                                                                                                                                                  |                                                                                                                                                                                                                                                                                             
|----------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                  | Outstanding                                                                                                                                                       | Exercise Price                                                                                                                                                   | Expiry Date                                                                                                                                                                                                                                                                                 
|                                                                  | 56,667 
      25,000 
      85,000 
      470,000 
      50,000 
    500,000                                                                                      | $23.57 
      $21.07 
      $24.61 
      $24.41 
      $18.99 
      $17.38                                                                                     | May 15, 2019 
      November 10,
      2019 
      December 14, 2019 
      December 16, 2019 
      June 4, 2020 
      August 13, 2020                                                                                                                                                    
|Directors who are not 
      Officers or 
      Senior Management | 90,000 
      90,000 
      200,000 
      56,000 
    150,000                                                                                                    | $21.30 
      $27.78 
      $35.34 
      $36.14 
      $29.02                                                                                                   | July 27, 2011 
      November 7, 2011 
      December 12, 2011 
      December 18, 2012 
      August 7, 2013                                                                                                                                                                               
|Employees and Consultants                                         | 231,500 
      232,500 
      20,000 
      95,000 
      46,000 
      30,000 
      84,069 
      50,000 
      10,000 
      164,000 
      35,000 
    20,000 | $21.30 
      $35.34 
      $40.62 
      $34.71 
      $36.14 
      $32.08 
      $11.50 
      $23.57 
      $21.07 
      $24.41 
      $17.38 
      $26.55 | July 27, 2011 
      December
      12, 2011 
      May 3, 2012 
      September 7, 2012 
      December 18, 2012 
      March 28, 2013 
      December 11, 2018 
      May 15, 2019 
      November 10,
      2019 
      December 16, 2019 
      August 13, 2020 
      November 12, 2010
|Total:                                                            | 4,703,870                                                                                                                                                         |                                                                                                                                                                  |                                                                                                                                                                                                                                                                                             

As at December 31, 2010, we did not have any share purchase
  warrants outstanding.

| | C. | Board Practices
| | -- | ---------------

Our directors are elected annually and hold office until the
  next annual general meeting of our shareholders or until their successors in
  office are duly elected or appointed. We do not have an executive committee. All
  directors are elected for a one-year term. See Table No. 30 under Item 6.A under
  the heading Directors and Senior Management for the length of time our
  directors have served on the board. All officers serve at the pleasure of the
  board. The next annual general meeting of our shareholders has been called for
  May 11, 2011.

Our Board of Directors has four committees: the Audit
  Committee, the Compensation Committee, the Corporate Governance and Nominating
  Committee and the Safety and Sustainability Committee. The members of these
  committees do not have any fixed terms for holding their positions, are
  appointed and replaced from time to time by resolution of the Board of
  Directors and receive separate remuneration for acting as members of the
  committees (other than our Chair of the Board of Directors).

- 125 -

---

The Audit Committee, comprised of John R. Brodie FCA, Chair,
  Richard D. Paterson and Peter W. Tomsett, has the responsibility of, among other
  things, recommending the Companys independent auditor to the Board; determining
  the extent of involvement of the independent auditor in reviewing unaudited
  quarterly financial results; evaluating the qualifications, performance and
  independence of the independent auditor; reviewing and recommending approval to
  the Board of our annual and quarterly financial results and management
  discussion and analysis and overseeing the establishment of whistle-blower and
  related procedures. Each member of the Audit Committee is an independent
  director. The full text of the Audit Committee Charter is available on the
  Companys website.

The Compensation Committee, comprised of Richard D. Paterson,
  Chair, John R. Brodie FCA, and Richard C. Campbell, MBE, has the responsibility
  for recommending approval of executive and management direct remuneration and
  stock options to the independent members of the Board. The President and Chief
  Executive Officers function in relation to the Compensation Committee is to
  make specific recommendations on remuneration with supporting commentary on
  individual performance and industry standards. Each member of the Compensation
  Committee is an independent director. The full text of the Compensation
  Committee Charter is available on the Companys website.

The Corporate Governance and Nominating Committee, comprised of
  Peter W. Tomsett, Chair, Richard C. Campbell, MBE and David L. Johnston, has the
  responsibility of, among other things, recommending to the Board, on an annual
  basis, nominees for election as directors for the next annual meeting of
  shareholders and nominees for appointment to committees of the Board and
  analyzing the needs of the Board when vacancies arise on the Board and
  recommending nominees who meet such needs. Each member of the Corporate
  Governance and Nominating Committee is an independent director.

The Safety and Sustainability Committee comprised of Richard C.
  Campbell, MBE, Chair, A.E. Michael Anglin and David L. Johnston, has the
  responsibility of, among other things monitoring our safety, health, security,
  environment and community relations performance on behalf of the Board and
  assessing the effectiveness of our safety, health, security, environment and
  community relations policies and practices. Each member of the Safety and
  Sustainability Committee is an independent director, other than A.E. Michael
  Anglin who was appointed Interim President and Chief Executive Officer on
  January 19, 2010.

Currently, we do not have service contracts with any of our
  directors or those of our subsidiaries providing for benefits upon termination
  of employment. (see Item 6.B  Compensation  Termination and Change of Control
  Benefits).

| | D. | Employees
| | -- | ---------

At our corporate head office in Vancouver, we had 39 full and 1
  part-time employees as at December 31, 2010, including the members of senior
  management, 2 of whom was involved in shareholder and investor communications,
  12 of whom were responsible for project exploration and development, 11 of whom
  provided financial, legal and community relations expertise, 10 who carried out
  our management and executive functions and 5 full-time and 1 part-time of whom
  provided administrative support. Including members of senior management, we had
  36 full and 2 part-time employees as of December 31, 2009 and 27 full-time and 3
  part-time employees as of December 31, 2008. We have an aggregate in excess of
  700 employees at our various projects.

- 126 -

---

| | E. | Share Ownership
| | -- | ---------------

The following table sets out, as of March 30, 2011 the number
  of our common shares beneficially owned by senior management and directors,
  whom, to our knowledge, possess sole voting and investment power with respect to
  the shares shown.

|Table No. 32                                    | 
|----------------------------------------------- | 
|Senior Management and Directors Share Ownership | 
|Name of Beneficial                              | 
|Owner                                           | 
|John Smith                                      | 
|Joe Phillips                                    | 
|Tom S.Q. Yip                                    | 
|David L. Smith                                  | 
|W. John DeCooman                                | 
|Kristen G. Riddell                              | 
|A.E. Michael Anglin                             | 
|John R. Brodie, FCA                             | 
|Richard C. Campbell, MBE                        | 
|David L. Johnston                               | 
|Richard D. Paterson                             | 
|Peter W. Tomsett                                | 

*includes options exercisable within 60 days.

As at March 30, 2011, our directors and senior management held,
  as a group, directly or indirectly, an aggregate of 2,000 common shares and
  750,331 options exercisable within 60 days.

The total number of exercisable and unexercisable stock options
  and the number of common shares subject to such stock options granted to the
  senior management and our directors are set out below as of February 28,
  2011.

- 127 -

---

|Table No. 33                                  | 
|--------------------------------------------- | 
|Senior Management and Directors Stock Options | 
|                                              | 
|                                              | 
|Name                                          | 
|John Smith                                    | 
|                                              | 
|                                              | 
|Tom S.Q. Yip                                  | 
|                                              | 
|                                              | 
|                                              | 
|                                              | 
|                                              | 
|David L. Smith                                | 
|                                              | 
|                                              | 
|W. John DeCooman                              | 
|                                              | 
|                                              | 
|                                              | 
|Kristen G. Riddell                            | 
|                                              | 
|                                              | 
|                                              | 
|A.E. Michael Anglin                           | 
|                                              | 
|John R. Brodie, FCA                           | 
|                                              | 
|                                              | 
|                                              | 
|Richard C. Campbell, MBE                      | 
|                                              | 
|David L. Johnston                             | 
|                                              | 
|                                              | 
|                                              | 
|Richard D. Paterson                           | 
|                                              | 
|Peter W. Tomsett                              | 
|                                              | 
|                                              | 

|Item 7 | Major Shareholders and Related Party
      Transactions
|------ | -------------------------------------------------------

| | A. | Major Shareholders
| | -- | ------------------

To the best of our knowledge at the date of this Annual Report,
  no shareholder directly or indirectly owns more than 5% of our issued shares,
  other than Van Eck Associates Corporation, which reported owning 5,768,729 common shares (7.23% of our issued and outstanding
  shares) as at February 14, 2011, Royce & Associates, LLC, which reported
  owning 8,831,025 of our common shares (11.07% of our issued and outstanding
  shares) as at February 3, 2011, and FMR LLC, which reported owning 5,448,283 of
  our common shares (6.83% of our issued and outstanding shares) as at February
  11, 2011. Royce & Associates, LLC reported owning 10,449,825 of our common
  shares (14.52% of our issued and outstanding shares) as at February 9, 2010,
  9,544,300 of our common shares (15.21% of our issued and outstanding shares) as
  at January 29, 2009, 8,463,500 of our common shares (13.52% of our issued and
  outstanding shares) as at February 6, 2008 and 7,875,300 of our common shares
  (12.78% of our issued and outstanding shares) as at January 25, 2007. Royce
  & Associates, LLC, Van Eck Associates Corporation and FMR LLC do not have
  voting rights that are different from the voting rights of the other holders of
  our common shares.

- 128 -

---

To the best of our knowledge at the date of this Annual Report,
  we are not directly or indirectly owned or controlled by another corporation, by
  any foreign government or by any other natural or legal person severally or
  jointly.

Our common shares are issued in registered form and the
  following information is taken from the records of Computershare Investor
  Services Inc. (located in Vancouver, British Columbia, Canada), the registrar
  and transfer agent for our common shares.

On December 31, 2010, the shareholders list for our common
  shares showed 2,166 registered shareholders and 79,665,041 shares outstanding.
  774 of these registered shareholders were US residents, owning 47,973,238 shares
  representing 60.22% of our issued and outstanding shares.

| | B. | Related Party Transactions
| | -- | --------------------------

Since January 1, 2010, we have entered or have proposed to
  enter into the following transactions that have materially affected or will
  materially affect us in which any director, executive officer, or beneficial
  holder of more than 10% of the outstanding common shares, or any of their
  respective relatives, spouses, associates or affiliates has had or will have any
  direct or material indirect interest:

We currently provide administrative and technical services
  under a transition services agreement to Pretium Resources Inc., a
  publicly-traded company with one common director (John Smith), and of which our
  Vice President, Finance and Chief Financial Officer, Tom Yip is a director.
  Under this arrangement, we are reimbursed for providing administrative and
  technical services, including the salaries and benefits of senior officers and
  staff.

| | C. | Interests of Experts and Counsel
| | -- | --------------------------------

This Form 20-F is being filed as an annual report under the
  Exchange Act, and, as such, there is no requirement to provide any information
  under this item.

|Item 8 | Financial Information
|------ | ---------------------

| | A. | Consolidated Statements and Other Financial
      Information
| | -- | -------------------------------------------------------------

Our audited consolidated financial statements are stated in
  United States dollars and are prepared in accordance with Canadian Generally
  Accepted Accounting Principles (GAAP), which differ in certain respects from
  those principles that we would have followed had our audited consolidated
  financial statements been prepared in accordance with US GAAP. The major
  measurement differences between Canadian and US GAAP, as they affect us, are disclosed in note
  19 to the audited consolidated financial statements.

- 129 -

---

Effective January 1, 2009, we changed our reporting currency
  from the Canadian dollar to the U.S. 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.

Exhibited hereto are audited consolidated financial statements
  prepared by our management, audited by an independent auditor and accompanied by
  an audit report:

|(a) | Auditors Report, dated March 1, 2011.                                                                                                     
|--- | -------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                            
|(b) | Consolidated Balance Sheets as at December 31, 2010 and
      December 31, 2009.                                                           
|    |                                                                                                                                            
|(c) | Consolidated Statements of Earnings (Loss) for the years
      ended December 31, 2010, December 31, 2009 and December 31,
      2008.     
|    |                                                                                                                                            
|(d) | Consolidated Statements of Cash Flows for the years ended
      December 31, 2010, December 31, 2009 and December 31, 2008.                
|    |                                                                                                                                            
|(e) | Consolidated Statement of Comprehensive Income (Loss) for
      the years December 31, 2010, December 31, 2009 and December 31,
      2008.
|    |                                                                                                                                            
|(f) | Consolidated Statements of Shareholders Equity for the
      years ended December 31, 2010, December 31, 2009 and December 31,
      2008.
|    |                                                                                                                                            
|(g) | Notes to Consolidated Financial Statements for the years
      ended December 31, 2010, December 31, 2009 and December 31,
      2008.     

100% of our sales are export sales, the total of which was
  $112.3 million in 2010.

The Pirquitas mine has a fiscal stability agreement with the
  government of Argentina dating from 1998. In 2002, the government of Argentina
  implemented an export duty on concentrates that did not apply to companies with
  pre-existing fiscal stability agreements. In December 2007 the National Customs
  Authority of Argentina levied an export duty of 10% on concentrates for projects
  with fiscal stability agreements predating 2002. We have been advised that the
  project is subject to this export duty despite our rights under our fiscal
  stability agreement from 1998. The legality of the export duty has been
  challenged and is currently under review by the court in Argentina. In July
  2010, we filed a claim in the Federal Court of Jujuy Province for the repayment
  of export duties paid to date and for an order to cease payment of the export
  duty until the matter is decided by the court. The court granted an order
  effective September 29, 2010 to cease payment of the export duty pending the
  courts determination of the legality of export duty. Up to December 31, 2010
  the Pirquitas mine has paid $6,646,000 in export taxes on concentrate sales and
  accrued for an additional $3,095,000 since we received the order to cease
  payment. The export tax expense has been recorded within cost of sales until a
  resolution is reached, if these duties are recovered in the future we will
  recognize a gain in the statement of earnings for the full amount.

We have not paid dividends in the past five years and do not
  expect to pay dividends in the near future. Our present policy is to retain
  future earnings for use in our operations and the expansion of our business.

- 130 -

---

| | B. | Significant Changes
| | -- | -------------------

There were no significant changes that have occurred, other
  than those disclosed in note 20 to our consolidated financial statements as at
  December 31, 2009, since the date of our most recent audited consolidated
  financial statements.

|Item 9 | The Offer and Listing
|------ | ---------------------

| | A. | Offer and Listing Details
| | -- | -------------------------

On November 4, 2004, our common shares commenced trading in
  Canada on the Toronto Stock Exchange (TSE) in Toronto, Ontario, Canada, under
  the trading symbol SSO and CUSIP #82823L-10-6. Prior to November 4, 2004, our
  shares were listed in Canada on the TSX Venture Exchange (TSX-V) (formerly
  known as the Canadian Venture Exchange Inc., the successor exchange resulting
  from the merger of the Vancouver Stock Exchange and Alberta Stock Exchange
  effective November 29, 1999) (together the TSE and TSX-V are referred to as the
  TSX). Our common shares commenced trading on the Vancouver Stock Exchange in
  1947.

On October 12, 2004, our common shares commenced trading in the
  United States on the Nasdaq Global Market (NGM, formerly known as the Nasdaq
  National Market) with the symbol SSRI. Prior to October 12, 2004, our shares
  were traded in the United States on the Nasdaq SmallCap Market (NSM) (together
  the NGM and NSM are referred to as Nasdaq). Our common shares were first
  quoted on the Nasdaq SmallCap Market on August 1, 1996.

The following tables set out the reported high and low prices
  on each of TSX and Nasdaq for (a) the five most recent fiscal years; (b) each
  quarterly period for the past two fiscal years; and (c) each month for the past
  six months.

|Table No. 34                                                                     
|---------------------------------------------------------------------------------
|High and Low Prices for the Five Most Recent Fiscal Years
      on the TSX (C$s)
|                                                                                 
|Fiscal Year
      Ended                                                          
|December 31, 2010                                                                
|December 31, 2009                                                                
|December 31, 2008                                                                
|December 31, 2007                                                                
|December 31, 2006                                                                

|Table No. 35                                                                   
|-------------------------------------------------------------------------------
|High and Low Prices for the Five Most Recent Fiscal Years
      on Nasdaq ($s)
|                                                                               
|Fiscal Year
      Ended                                                        
|December 31, 2010                                                              
|December 31, 2009                                                              
|December 31, 2008                                                              
|December 31, 2007                                                              
|December 31, 2006                                                              

- 131 -

---

|Table No. 36                                                                                
|--------------------------------------------------------------------------------------------
|High and Low Prices for
      each Quarterly Period for the Past Two Fiscal Years on the TSX
|                                                                                            
|Period
      Ended                                                                          
|December 31, 2010                                                                           
|September 30, 2010                                                                          
|June 30, 2010                                                                               
|March 31, 2010                                                                              
|December 31, 2009                                                                           
|September 30, 2009                                                                          
|June 30, 2009                                                                               
|March 31, 2009                                                                              

|Table No. 37                                                                                     
|-------------------------------------------------------------------------------------------------
|High and Low Prices for each Quarterly Period for the Past
      Two Fiscal Years on Nasdaq ($s)
|                                                                                                 
|Period
      Ended                                                                               
|December 31, 2010                                                                                
|September 30,
      2010                                                                         
|June 30, 2010                                                                                    
|March 31, 2010                                                                                   
|December 31, 2009                                                                                
|September 30,
      2009                                                                         
|June 30, 2009                                                                                    
|March 31, 2009                                                                                   

|Table No. 38                                                                      
|----------------------------------------------------------------------------------
|High and Low Prices for each Month for the Past Six Months
      on the TSX (C$s)
|Month
      Ended                                                                 
|February 28, 2011                                                                 
|January 31, 2011                                                                  
|December 31, 2010                                                                 
|November 30, 2010                                                                 
|October 31, 2010                                                                  
|September 30,
      2010                                                          

- 132 -

---

|Table No. 39                                                                    
|--------------------------------------------------------------------------------
|High and Low Prices for each Month for the Past Six Months
      on Nasdaq ($s)
|Month
      Ended                                                               
|February 28, 2011                                                               
|January 31, 2011                                                                
|December 31, 2010                                                               
|November 30, 2010                                                               
|October 31, 2010                                                                
|September 30,
      2010                                                        

| | B. | Plan of Distribution
| | -- | --------------------

This Form 20-F is being filed as an annual report under the
  Exchange Act, and, as such, there is no requirement to provide any information
  under this item.

| | C. | Markets
| | -- | -------

See Subsection A of this Item 9.

| | D. | Selling Shareholders
| | -- | --------------------

This Form 20-F is being filed as an annual report under the
  Exchange Act, and, as such, there is no requirement to provide any information
  under this item.

| | E. | Dilution
| | -- | --------

This Form 20-F is being filed as an annual report under the
  Exchange Act, and, as such, there is no requirement to provide any information
  under this item.

| | F. | Expenses of the Issue
| | -- | ---------------------

This Form 20-F is being filed as an annual report under the
  Exchange Act, and, as such, there is no requirement to provide any information
  under this item.

|Item 10 | Additional Information
|------- | ----------------------

| | A. | Share Capital
| | -- | -------------

This Form 20-F is being filed as an annual report under the
  Exchange Act, and, as such, there is no requirement to provide any information
  under this item.

| | B. | Memorandum and Articles of Association
| | -- | --------------------------------------

Incorporation

We were incorporated in British Columbia, Canada, under
  Certificate of Incorporation number 21492 on December 11, 1946. We do not have
  any stated objects or purposes as such are not required by the corporate
  laws of the Province of British Columbia. Rather, we are, by such corporate
  laws, entitled to carry on any activities whatsoever, which are not specifically
  precluded by other statutory provisions of the Province of British Columbia.

- 133 -

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Powers and Functions of the Directors

The powers and functions of the directors are set out in our
  Articles, which were adopted by our shareholders on May 12, 2005. They
  provide:

|(a) | a director is obligated to disclose his potential
      interest in a proposal, arrangement or contract being considered by us,
      and may not vote on any proposal, arrangement or contract proposed, but
      such director shall be counted in the quorum at the meeting of the
      directors at which the proposal, arrangement or contract is
      approved;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                         
|(b) | the directors may, in the absence of an independent
      quorum, vote compensation to themselves;                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                         
|(c) | there are no limitations on the exercise by the directors
      of our borrowing powers;                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                         
|(d) | there are no provisions for the retirement or
      non-retirement of directors under an age limit; and                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                         
|(e) | there is no requirement for a director to hold any of our
      shares.                                                                                                                                                                                                                                                                                                 

Rights and Restrictions Attached to the
  Shares

As all of our authorized and issued shares are of one class
  there are no special rights or restrictions of any nature or kind attached to
  any of the shares. All authorized and issued shares rank equally in respect to
  the declaration and receipt of dividends, the rights to share in any profits or
  surplus on our liquidation, dissolution or winding. Each share has attached to
  it one non-cumulative vote.

Alteration of Share Rights

To alter the rights of holders of our issued shares such
  alteration must be approved by the majority vote of two-thirds of our issued
  shares attending and voting at a meeting of our shareholders.

Annual General Meetings

Annual general meetings are called and scheduled upon decision
  by the board of directors. The directors may convene an extraordinary general
  meeting of the shareholders. The holders of not less than 5% of our issued
  shares may requisition an extraordinary meeting of the shareholders. All
  meetings of the shareholders may be attended by registered shareholders or
  persons who hold powers of attorney or proxies given to them by registered
  shareholders.

Foreign Ownership Limitations

Our Articles do not contain limitations prohibiting shares
  being held by non-residents, foreigners or any other group.

Change of Control

There are no provisions in our Articles that would have an
  effect of delaying, deferring or preventing a change in our control, or that
  would operate with respect to any proposed merger, acquisition or corporate
  restructuring.

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Share Ownership Reporting Obligations

There are no provisions in our Articles requiring share
  ownership to be disclosed. The securities laws of the Province of British
  Columbia require disclosure of shareholdings by:

|(a) | persons who are our directors or senior officers;
      and                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                              
|(b) | a person who has direct or indirect beneficial ownership
      of, control or direction over, or a combination of direct or indirect
      beneficial ownership of and control or direction over our securities
      carrying more than 10% of the voting rights attached to all of our
      outstanding voting securities.

Differences from U.S. Law

The threshold of share ownership percentage requiring
  disclosure of ownership is higher in the home jurisdiction of British Columbia
  (a 10% threshold) than the United States where U.S. securities law prescribes a
  5% threshold for ownership disclosure.

| | C. | Material Contracts
| | -- | ------------------

The following is a summary of each material contract, other
  than contracts entered into in the ordinary course of business, to which we or
  any of our subsidiaries is a party, for the two years immediately preceding
  publication of the document, including dates, parties, general nature of the
  contracts, terms and conditions, and amount of any consideration passing to or
  from us or any other member of the group.

1.          
  Convertible Note Purchase Agreement dated February 27, 2008 with UBS Securities
  LLC, Bear, Stearns & Co., Inc., Deutsche Bank Securities Inc., Blackmont
  Capital Inc., GMP Securities L.P., National Bank Financial Inc. and Salman
  Partners Inc., as initial purchasers. Under the terms of the Convertible Note
  Purchase Agreement, we issued $138 million of convertible notes (the
  Convertible Notes) due March 1, 2028 and bearing interest at a rate of 4.5%
  per year. The Convertible Notes will be convertible into our common shares at a
  fixed conversion rate, subject to certain anti-dilution adjustments, only in the
  event that (i) during specified consecutive trading periods, the market price of
  our common shares exceeds 130% of the conversion price of the Convertible Notes,
  (ii) the trading price of the Convertible Notes falls to 97% or less of the
  amount equal to the then prevailing price of our common shares, multiplied by
  the applicable conversion rate, (iii) the Convertible Notes are called for
  redemption, (iv) upon the occurrence of specified corporate transactions, or (v)
  during specified periods in early 2013 and 2028. 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). In addition, if certain fundamental changes occur to us, holders
  of the Convertible Notes may be entitled to an increased conversion rate. The
  Convertible Notes will be convertible into our common shares at an initial
  conversion rate of 23.0792 common shares per $1,000 principal amount of
  Convertible Notes converted, representing an initial conversion price of
  approximately $43.33 per common share, which is approximately 130% of the
  closing price of our common shares on the Nasdaq Global Market on February 21,
  2008. Holders of the Convertible Notes will have the right to require us to
  repurchase all or part of their Convertible 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 Convertible 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
  Convertible Notes for cash at a redemption price equal to 100% of the principal
  amount of the Convertible Notes being redeemed, plus accrued and unpaid interest
  to, but excluding, the redemption date. See Item 5.B under the heading
  Liquidity and Capital Resources.

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2.          
  Sale Agreement dated July 16, 2008 with Aurcana Corporation in respect of the
  sale of our interest in the Shafter Silver Project. See Item 4.B under the
  heading Shafter Silver Project of the Companys Form 20F for the year ended
  December 31, 2008, as amended, for a description of the sale agreement.

3.          
  An Underwriting Agreement dated February 24, 2009 with UBS Securities Canada
  Inc., Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Dahlman
  Rose & Co., LLC, Morgan Stanley & Co. Incorporated, Scotia Capital Inc.,
  Blackmont Capital Inc., GMP Securities L.P., National Bank Financial Inc. and
  Salman Partners Inc., as Underwriters and Deutsche Bank Securities Limited and
  Credit Suisse Securities (Canada), Inc. as Sub-Underwriters. Under the terms of
  the Underwriting Agreement, we issued 5,450,000 common shares with an
  over-allotment option of up to 817,500 common shares, exercisable to March 29,
  2009. Pursuant to the over-allotment option, the Underwriters purchased an
  additional 375,713 common shares. We received gross proceeds from the offering
  of of $99.0 million and paid underwriting commission to the underwriters in the amount of $5.6 million.

4.          
  An Underwriting Agreement dated August 12, 2009 with UBS Securities Canada Inc.,
  Credit Suisse Securities (USA) LLC, Dahlman Rose & Co. LLC, Deutsche Bank
  Securities Inc., Morgan Stanley & Co. Incorporated, CIBC World Markets Inc.,
  Scotia Capital Inc., Blackmont Capital Inc., GMP Securities L.P., National Bank
  Financial Inc. and Salman Partners Inc., as Underwriters and Deutsche Bank
  Securities Limited and Credit Suisse Securities (Canada), Inc. as
  Sub-Underwriters. Under the terms of the Underwriting Agreement, we issued
  2,725,288 common shares with an over-allotment option of up to 272,528 common
  shares, exercisable to September 17, 2009. Pursuant to the over-allotment
  option, the Underwriters purchased an additional 272,528 common shares. We
  received gross proceeds from the offering of $51.0 million and paid underwriting commission to the underwriters in the amount of $3.1 million.

5.          
  An Underwriting Agreement dated February 12, 2010 with UBS Securities Canada
  Inc., BMO Nesbitt Burns Inc., CIBC World Markets Inc., Credit Suisse Securities
  (USA) LLC, Dahlman Rose & Co. LLC, Deutsche Bank Securities Inc., Morgan
  Stanley & Co. Incorporated, Scotia Capital Inc., GMP Securities L.P.,
  National Bank Financial Inc. and Salman Partners Inc., as Underwriters and
  Deutsche Bank Securities Limited and Credit Suisse Securities (Canada), Inc. as
  Sub-Underwriters. Under the terms of the Underwriting Agreement, we issued
  5,882,353 common shares with an over-allotment option of up to 882,352 common
  shares, exercisable to March 20, 2010. Pursuant to the over-allotment option,
  the Underwriters purchased an additional 846,402 common shares. We received
  gross proceeds from the offering of $114.4 million and paid underwriting commission to the underwriters in the amount of $6.4 million.

6.         
   Sale Agreement dated February 19, 2010 with Silvercorp Metals Inc. in
  respect of the sale of our interest in the Silvertip Project. See Item 4.B Business Overview under
  the heading Silvertip Project for a description of the Sale Agreement.

7.          
  Acquisition Agreement dated October 28, 2010, as amended November 4, 2010, with
  Pretium Resources Inc. (Pretium) in respect of the sale of our interest in the
  Snowfield and Brucejack Projects. See Item 4.B Business Overview under the heading Snowfield
  Project and Brucejack Project.

8.          
  An Underwriting Agreement dated December 9, 2010 with Pretium, CIBC World
  Markets Inc., Citigroup Global Markets Canada Inc., UBS Securities Canada Inc.,
  BMO Nesbitt Burns Inc., Credit Suisse Securities (Canada) Inc., Dahlman Rose
  & Company, LLC, GMP Securities L.P. and Salman Partners Inc. Under the terms
  of the Underwriting Agreement, Pretium issued an aggregate of 80,323,333 common
  shares, including 36,163,333 common shares to us, as partial consideration for
  the sale of the Snowfield and Brucejack Projects. See Item 4.B Business Overview under the heading
  Snowfield Project and Brucejack Project.

- 136 -

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9.          
  A letter agreement dated February 28, 2011, with Esperanza Resources Corp.
  (Esperanza) pursuant to which we have agreed to purchase all of Esperanzas
  interest in the San Luis Project. See Item 4.B. Business Overview under the heading San Luis
  Project.

| | D. | Exchange Controls and Investment Canada
      Act
| | -- | -------------------------------------------------

Canada has no system of exchange controls. There are no
  exchange restrictions on borrowing from foreign countries or on the remittance
  of dividends, interest, royalties and similar payments, management fees, loan
  repayments, settlement of trade debts, or the repatriation of capital. Any such
  remittances to United States residents, however, may be subject to a withholding
  tax pursuant to the Canadian Income Tax Act as modified by the reciprocal tax
  treaty between Canada and the United States. See Item 10.E, Taxation.

The Investment Canada Act (the Act), enacted on June 20,
  1985, requires, depending on the circumstances and subject to certain
  exceptions, either pre-closing review by, or post-closing notification to, the
  Government of Canada on the acquisition of control of Canadian businesses by
  non-Canadians, as such terms are defined in the Act. The term acquisition of
  control is defined as any one or more non-Canadian persons acquiring all or
  substantially all of the assets used in the Canadian business, the acquisition
  of the voting shares of a Canadian corporation carrying on the Canadian business
  or the acquisition of the voting interests of an entity controlling or carrying
  on the Canadian business. The acquisition of the majority of the outstanding
  shares is deemed to be an acquisition of control of a corporation. The
  acquisition of less than a majority, but one-third or more, of the voting shares
  of a corporation is presumed to be an acquisition of control of a corporation
  unless it can be established that the purchaser will not control the
  corporation.

Investments requiring review are all direct acquisitions of
  Canadian businesses with assets of $5,000,000 or more (subject to the comments
  below on WTO investors), and all indirect acquisitions of Canadian businesses
  (subject to the comments below on WTO investors) with assets of more than
  $50,000,000 or with assets of between $5,000,000 and $50,000,000 which represent
  more than 50% of the value of the total international transaction. In addition,
  specific acquisitions or new businesses in designated types of business
  activities related to Canadas cultural heritage or national identity could
  require review following notification if the Government of Canada considers that
  it is in the public interest to do so.

Furthermore, all investments (regardless of transaction size or
  whether control has been acquired) may be reviewed either prior to or after
  closing of the transaction on national security grounds, despite the fact that
  such investments may not otherwise be reviewable. The relevant test is whether
  the investment is injurious to national security, however, the Act does not
  define national security, nor does it identify the relevant factors that may
  be taken into account for purposes of this review. The definition of Canadian
  business that applies under national security reviews is also significantly
  broader than otherwise applies under the Act, which expands the number of
  transactions that may be subject to this form of review.

The Act was amended with the implementation of the Agreement
  establishing the World Trade Organization (WTO) to provide for special review
  thresholds for WTO investors, as defined in the Act. WTO investor generally
  means (i) an individual, other than a Canadian, who is a national or a WTO
  member (such as, for example, the United States), or who has the right of
  permanent residence in relation to that WTO member, (ii) governments of WTO
  members, and (iii) entities that are not Canadian controlled, but which are WTO
  investor controlled, as determined by rules specified in the Act. If the WTO
  investor rules apply, an investment in our shares by or from a WTO investor will
  be reviewable only if (i) it is direct investment to acquire control of Silver
  Standard and (ii) the book value of our assets is equal to or greater than a
  specified amount (the WTO Review Threshold). The WTO Review Threshold is
  adjusted annually by a formula relating to increases in the nominal gross
  domestic product of Canada.

- 137 -

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The 2010 WTO Review Threshold is $299,000,000. However, both
  the special WTO Review Threshold and the exemption from review for indirect
  investments by and from WTO investors do not apply to WTO investors, and the
  general rules described in the preceding paragraph do apply, to the acquisition
  of control of certain types of businesses specified in the Act, including a
  business that is a cultural business. In addition, upon certain amendments to
  the Act made in March 2009 taking effect, the $299,000,000 threshold for direct
  acquisitions by WTO investors will be replaced with an enterprise value
  threshold initially set at $600,000,000, which will subsequently increase first
  to $800,000,000 two years after the new threshold is adopted, and later to $1
  billion, to be adjusted annually by a formula relating to increases in the
  nominal gross domestic product of Canada.

If any non-Canadian, whether or not a WTO investor, acquires
  control of Silver Standard by the acquisition of shares where the transaction is
  not reviewable as described above, the non-Canadian is required to notify the
  Canadian government and to provide certain basic information relating to the
  investment. A non-Canadian, whether or not a WTO investor, is also required to
  provide a notice to the government on the establishment of a new Canadian
  business. If our business is then a prescribed type of business activity related
  to Canadas cultural heritage or national identity, and if the Canadian
  government considers it to be in the public interest to do so, then the Canadian
  government may give notice in writing within 21 days requiring the investment to
  be reviewed.

For non-Canadians (other than WTO investors), an indirect
  acquisition of control, by the acquisition of voting interests of an entity that
  directly or indirectly controls Silver Standard, is reviewable if the book value
  of our assets is then $50,000,000 or more. If the WTO investor rules apply, then
  this requirement does not apply to a WTO investor, or to a person acquiring the
  entity from a WTO investor. Special rules specified in the Act would apply if
  the value of our assets is more than 50% of the value of the entity so acquired.
  By these special rules, if the non-Canadian (other than a WTO investor) were to
  acquire indirect control of Silver Standard, and the value of our assets and all
  other entities carrying on business in Canada, calculated in the manner provided
  in the Act and the regulations under the Act, is more than 50% of the value,
  calculated in the manner provided in the Act and the regulations under the Act,
  of the assets of all entities, the control of which is acquired, directly or
  indirectly, in the transaction of which the acquisition of control of Silver
  Standard forms a part, then the thresholds for a direct acquisition of control
  as discussed above will apply, that is, a threshold of $5,000,000 for a
  non-Canadian other than a WTO investor. If the value exceeds that level, then
  the transaction must be reviewed in the same manner as if the transaction were a
  direct acquisition of control.

If an investment is reviewable, an application for review in
  the form prescribed by the regulations is required to be filed with the Director
  appointed under the Act (the Director) prior to the investment taking place
  and the investment may not be consummated until the review has been completed.
  There are, however, certain exceptions. Applications concerning reviewable
  investments in culture-sensitive sectors are required upon receipt of a notice
  for review. In addition, the Minister (a person designated as such under the
  Act) may permit an investment to be consummated prior to completion of the
  review if he is satisfied that delay would cause undue hardship to the acquirer
  or jeopardize the operations of the Canadian business that is being acquired.
  The Director will submit the application to the Minister, together with any
  other information or written undertakings given by the acquirer and any
  representation submitted to the Director by a province that is likely to be
  significantly affected by the investment.

The Minister will then determine whether the investment is
  likely to be of net benefit to Canada, taking into account the information
  provided and having regard to certain factors of assessment where they are
  relevant. Some of the factors to be considered are (i) the effect of the
  investment on the level and nature of economic activity in Canada, including the
  effect on employment, on resource processing, and on the utilization of parts,
  components and services produced in Canada; (ii) the effect of the investment on
  exports from Canada; (iii) the degree and significance of participation by
  Canadians in the Canadian business and in any industry in Canada of which it forms a
  part; (iv) the effect of the investment on productivity, industrial efficiency,
  technological development, product innovation and product variety in Canada; (v)
  the effect of the investment on competition within any industry or industries in
  Canada; (vi) the compatibility of the investment with national industrial,
  economic and cultural policies taking into consideration industrial, economic
  and cultural objectives enunciated by the government or legislature of any
  province likely to be significantly affected by the investment; and (vii) the
  contribution of the investment to Canadas ability to compete in world
  markets.

- 138 -

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The Act sets certain time limits for the Director and the
  Minister. Within 45 days after a completed application has been received, the
  Minister must notify the acquirer that (a) he is satisfied that the investment
  is likely to be of net benefit to Canada, or (b) he is unable to complete his
  review, in which case he shall have 30 additional days to complete his review
  (unless the acquirer agrees to a longer period), or (c) he is not satisfied that
  the investment is likely to be of net benefit to Canada.

Where the Minister has advised the acquirer that he is not
  satisfied that the investment is likely to be of net benefit to Canada, the
  acquirer has the right to make representations and submit undertakings within 30
  days of the date of the notice (or any further period that is agreed upon
  between the acquirer and the Minister). On the expiration of the 30 day period
  (or the agreed extension), the Minister must quickly notify the acquirer (i)
  that he is now satisfied that the investment is likely to be of net benefit to
  Canada or (ii) that he is not satisfied that the investment is likely to be of
  net benefit to Canada. In the latter case, the acquirer may not proceed with the
  investment or, if the investment has already been consummated, must divest
  itself of control of the Canadian business.

The Act provides civil remedies for non-compliance with any
  provision. There are also criminal penalties for breach of confidentiality or
  providing false information.

| | E. | Taxation
| | -- | --------

A brief description of certain provisions of the tax treaty
  between Canada and the United States is included below, together with a brief
  outline of certain taxes, including withholding provisions, to which United
  States security holders are subject under existing laws and regulations of
  Canada. The consequences, if any, of provincial, state and local taxes are not
  considered.

The Company recommends security holders seek the advice of
  their own tax advisors, tax counsel or accountants with respect to the
  applicability or effect on their own individual circumstances of the matters
  referred to herein and of any provincial, state or local taxes.

Certain Canadian Federal Income Tax
  Consequences

The discussion under this heading summarizes the principal
  Canadian federal income tax consequences of acquiring, holding and disposing of
  shares of common shares of the Company for a shareholder of the Company who is
  not a resident of Canada but is a resident of the United States and who will
  acquire and hold shares of common shares of the Company as capital property for
  the purposes of the Income Tax Act(Canada) (the Canadian Tax Act).
  This summary does not apply to a shareholder who carries on business in Canada
  through a permanent establishment situated in Canada or performs independent
  personal services in Canada through a fixed base in Canada if the shareholders
  holding in the Company is effectively connected with such permanent
  establishment or fixed base. This summary is based on the provisions of the
  Canadian Tax Act and the regulations thereunder and on an understanding of the
  administrative practices of the Canada Revenue Agency, and takes into account
  all specific proposals to amend the Canadian Tax Act or regulations made by the
  Minister of Finance of Canada as of the date hereof. It has been assumed that
  there will be no other relevant amendment of any governing law although no assurance can be given in this respect. The Company
  recommends shareholders seek the advice of their own Canadian and U.S. tax
  advisors.

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The provisions of the Canadian Tax Act are subject to income
  tax treaties to which Canada is a party, including the Canada-United States
  Income Tax Convention (1980), as amended (the Convention).

Dividends on Common Shares and Other Income

Under the Canadian Tax Act, a non-resident of Canada is
  generally subject to Canadian withholding tax at the rate of 25% on dividends
  paid or deemed to have been paid to him or her by a corporation resident in
  Canada. The Convention limits the rate to 15% if the shareholder is a resident
  of the United States and the dividends are beneficially owned by and paid to
  such shareholder, and to 5% if the shareholder is also a corporation that
  beneficially owns at least 10% of the voting shares of the payor
  corporation.

The amount of a stock dividend (for tax purposes) would
  generally be equal to the amount by which the paid up or stated capital of the
  Company had increased by reason of the payment of such dividend. The Company
  will furnish additional tax information to shareholders in the event of such a
  dividend.

The Convention generally exempts from Canadian income tax
  dividends paid to a religious, scientific, literary, educational or charitable
  organization or to an organization constituted and operated exclusively to
  administer a pension, retirement or employee benefit fund or plan, if the
  organization is a resident of the United States and is exempt from income tax
  under the laws of the United States.

Dispositions of Common Shares

Under the Canadian Tax Act, a taxpayers capital gain or
  capital loss from a disposition of a common share of the Company is the amount,
  if any, by which his or her proceeds of disposition exceed (or are exceeded by,
  respectively) the aggregate of his or her adjusted cost base of the share and
  reasonable expenses of disposition. The capital gain or loss must be computed in
  Canadian currency using a weighted average adjusted cost base for identical
  properties. One-half of a capital gain (the taxable capital gain) is included
  in income, and one-half of a capital loss in a year (the allowable capital
  loss) is deductible from taxable capital gains realized in the same year. The
  amount by which a shareholders allowable capital loss exceeds the taxable
  capital gain in a year may be deducted from a taxable capital gain realized by
  the shareholder in the three previous years or any subsequent year, subject to
  certain restrictions in the case of a corporate shareholder and subject to
  adjustment when the capital gains inclusion rate in the year of disposition
  differs from the inclusion rate in the year the deduction is claimed.

If a common share of the Company is disposed of to the Company
  other than in the open market in the manner in which shares would normally be
  purchased by the public, the proceeds of disposition will, in general terms, be
  considered as limited to the paid-up capital of the share and the balance of the
  price paid will be deemed to be a dividend. In the case of a shareholder that is
  a corporation, the amount of any capital loss otherwise determined may be
  reduced, in certain circumstances, by the amount of dividends previously
  received in respect of the shares disposed of, unless the corporation owned the
  shares for at least 365 days prior to sustaining the loss and (together with
  corporations, persons and other entities, with whom the corporation was not
  dealing at arms length) did not own more than five percent of the shares of any
  class of the corporation from which the dividend was received. These loss
  limitation rules may also apply where a corporation is a member of a partnership
  or a beneficiary of a trust that owned the shares disposed of.

Under the Canadian Tax Act, a non-resident of Canada is subject
  to Canadian tax on taxable capital gains, and may deduct allowable capital
  losses, realized on a disposition of taxable Canadian property. Shares of common shares of the Company will constitute taxable
  Canadian property of a shareholder at a particular time if (i) the shareholder
  used the shares in carrying on business in Canada, or if at any time in the five
  years immediately preceding the disposition 25% or more of the issued shares of
  any class or series in the capital stock of the Company belonged to one or more
  persons in a group comprising the shareholder and persons with whom the
  shareholder did not deal at arms length and (ii) the value of the shares is
  derived principally from real property situated in Canada, Canadian resource
  property or timber resource property. Non-residents disposing of taxable
  Canadian property must file a Canadian tax return to report the disposition.

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The Convention relieves United States residents from liability
  for Canadian tax on capital gains derived on a disposition of shares unless:

|(a) | the value of the shares is derived principally from real
      property in Canada, including the right to explore for or exploit natural
      resources and rights to amounts computed by reference to
      production;                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                  
|(b) | the shareholder was resident in Canada for 120 months
      during any period of 20 consecutive years preceding, and at any time
      during the 10 years immediately preceding, the disposition and the shares
      were owned by him when he or she ceased to be resident in Canada;
      or
|    |                                                                                                                                                                                                                                                                                                  
|(c) | the shares formed part of the business property of a
      permanent establishment that the holder has or had in Canada within the
      12 months preceding the disposition.                                                                                                                  

Certain U.S. Federal Income Tax
  Considerations

The following is a general summary of certain material
  anticipated U.S. federal income tax consequences to a U.S. Holder, as defined
  below, of the ownership and disposition of Common Shares in the Company. This
  discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the
  Code), Treasury regulations promulgated under the Code (Treasury
  Regulations), administrative pronouncements or practices, judicial decisions,
  and the Income Tax Convention between the U.S. and Canada (the Tax
  Convention), all as of the date hereof. Future legislative, judicial, or
  administrative modifications, revocations, or interpretations, which may or may
  not be retroactive, may result in U.S. federal income tax consequences
  significantly different from those discussed herein. This discussion is not
  binding on the U.S. Internal Revenue Service (the IRS). No ruling has been or
  will be sought or obtained from the IRS with respect to any of the U.S. federal
  tax consequences discussed herein. There can be no assurance that the IRS will
  not challenge any of the conclusions described herein or that a U.S. court will
  not sustain such a challenge.

This discussion does not address the U.S. federal income tax
  consequences to U.S. Holders subject to special rules, including U.S. Holders
  that (i) are banks, financial institutions, or insurance companies, (ii) are
  regulated investment companies or real estate investment trusts, (iii) are
  brokers, dealers, or traders in securities or currencies, (iv) are tax-exempt
  organizations, (v) hold Common Shares as part of hedges, straddles, constructive
  sales, conversion transactions, or other integrated investments, (vi) acquire
  Common Shares as compensation for services or through the exercise or
  cancellation of employee stock options or warrants, (vii) have a functional
  currency other than the U.S. dollar, (viii) own or have owned directly,
  indirectly, or constructively 10% or more of the voting power of the Company, or
  (ix) are subject to the alternative minimum tax. In addition, this discussion
  does not address any U.S. federal estate, gift, or other non-income tax, or any
  state, local, or non-U.S. tax consequences of the ownership and disposition of
  Common Shares.

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As used herein, U.S. Holder means a beneficial owner of
  Common Shares that is (i) an individual that is a citizen or resident of the
  U.S. for U.S. federal income tax purposes, (ii) a corporation (or other entity
  taxable as a corporation for U.S. federal tax purposes) created or organized
  under the laws of the U.S. or any political subdivision thereof, including the
  States and the District of Columbia, (iii) an estate the income of which is
  subject to U.S. federal income tax regardless of its source, or (iv) a trust
  that (a) is subject to the primary jurisdiction of a court within the U.S. and
  for which one or more U.S. persons have authority to control all substantial
  decisions or (b) has a valid election in effect under applicable Treasury
  Regulations to be treated as a U.S. person.

If a pass-through entity, including a partnership or other
  entity taxable as a partnership for U.S. federal tax purposes, holds Common
  Shares, the U.S. federal income tax treatment of an owner or partner generally
  will depend on the status of such owner or partner and on the activities of the
  pass-through entity. A U.S. person that is an owner or partner of a pass-through
  entity holding Common Shares is urged to consult its own tax advisor.

This discussion assumes that Common Shares are held as capital
  assets (generally, property held for investment), within the meaning of the
  Code, in the hands of a U.S. Holder at all relevant times.

A U.S. HOLDER OF COMMON SHARES IS URGED TO CONSULT ITS OWN TAX
  ADVISOR REGARDING THE APPLICATION OF U.S. FEDERAL TAX LAWS TO ITS PARTICULAR
  SITUATION AND ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL,
  NON-U.S., OR OTHER TAXING JURISDICTION.

Passive Foreign Investment Company (PFIC)
  Considerations

Special and generally unfavorable U.S. federal income tax rules
  may apply to a U.S. Holder if its holding period in its Common Shares includes
  any period during a taxable year of the Company in which the Company is a
  passive foreign investment company (a PFIC). A non-U.S. corporation is a PFIC
  for each taxable year in which (i) 75% or more of its gross income is passive
  income or (ii) 50% or more of the average value (or, in certain circumstances,
  the adjusted tax basis for U.S. federal income tax purposes) of its assets are
  assets that either produce or are held for the production of passive income.
  Special rules apply where a non-U.S. corporation owns, directly or indirectly,
  at least 25% by value of the shares of another corporation (the lower-tier
  corporation). For purposes of determining whether the Company is a PFIC, it
  will be treated as if it held its proportionate share of the assets of any
  lower-tier corporation and received directly its proportionate share of the
  income of any lower-tier corporation.

For purposes of the PFIC rules, and subject to certain
  exceptions, passive income includes, in part, dividends, interest, royalties,
  rents, and net gains from certain transactions in commodities. Net gains from
  transactions in commodities will not be passive income for purposes of the PFIC
  rules if (i) they are active business gains or losses from the sale of
  commodities, and (ii) substantially all of the taxpayers commodities are (a)
  shares in trade or inventory of it, (b) property used in its trade or business,
  or (c) supplies regularly used or consumed by it in the ordinary course of its
  trade or business.

Under these PFIC rules, the Company believes that (i) it was a
  PFIC for its 2009 taxable year, (ii) based on the Companys current and
  anticipated operations, that it will not be a PFIC for its 2011 and subsequent
  taxable years. In addition, the Company believes that certain of its
  subsidiaries were PFICs for their 2009 and 2010 taxable years and will be PFICs
  for their 2011 and subsequent taxable years (PFIC Subsidiaries). However, with
  respect to any PFIC Subsidiaries, the PFIC rules generally will apply to a U.S.
  Holder only during years in which the Company itself is a PFIC. There can be no
  assurance regarding the PFIC classification of the Company or its subsidiaries
  for their 2011 and subsequent taxable years, because PFIC classification is fundamentally factual in nature,
  is determined annually, and generally cannot be determined until the close of
  the taxable year in question.

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In the absence of a timely election described below, if a U.S.
  Holders holding period in its Common Shares includes any period during a
  taxable year of the Company in which the Company is or will be a PFIC, the rules
  described below in The No Election Alternative generally apply to gain
  realized on a disposition of Common Shares and certain distributions received
  with respect to Common Shares. If certain requirements are met, a U.S. Holder
  may mitigate certain of the consequences of those rules by timely making an
  election to mark its Common Shares to market, described below in The
  Mark-to-Market Election Alternative, or to treat the Company and any PFIC
  Subsidiary each as a qualified electing fund (a QEF), described below in
  The QEF Election Alternative.

If a U.S. Holder owns Common Shares during any year in which
  the Company is a PFIC, such U.S. Holder must also file IRS Form 8621.

The QEF Election Alternative

A U.S. Holder that makes a timely and effective QEF election
  (an Electing U.S. Holder) generally would not be subject to the rules
  discussed below in The No Election Alternative. However, an Electing
  U.S. Holder will be subject to U.S. federal income tax on such Electing U.S.
  Holders pro rata share of the Companys (a) net capital gain, which will be
  taxed as long-term capital gain to such Electing U.S. Holder, and (b) ordinary
  earnings, which will be taxed as ordinary income to such Electing U.S. Holder,
  in each case regardless of whether such amounts are actually distributed to such
  Electing U.S. Holder. However, an Electing U.S. Holder may, subject to certain
  limitations, elect to defer payment of current U.S. federal income tax on such
  amounts, subject to an interest charge. If such Electing U.S. Holder is not a
  corporation, any such interest paid will be treated as personal interest,
  which is not deductible.

A QEF election applies only to the non-U.S. corporation for
  which it is made. If the Company were a PFIC, a U.S. Holder likely would remain
  subject to the excess distribution rules discussed below in The No
    Election Alternative in respect of its indirectly owned shares in each
  PFIC Subsidiary regardless of a QEF election in respect of the Company, unless
  such U.S. Holder has made a QEF election in respect of such PFIC Subsidiary.

An Electing U.S. Holder generally (a) may receive a tax-free
  distribution from the Company to the extent that such distribution represents
  earnings and profits that were previously included in income by the Electing
  U.S. Holder because of such QEF election and (b) will adjust such Electing U.S.
  Holders tax basis in the Common Shares to reflect the amount included in income
  or allowed as a tax-free distribution because of such QEF election. In addition,
  an Electing U.S. Holder generally will recognize capital gain or loss on the
  sale or other taxable disposition of Common Shares.

The procedure for making a QEF election, and the U.S. federal
  income tax consequences of making a QEF election, will depend on whether such
  QEF election is timely. A QEF election will be treated as timely if such QEF
  election is made for the first taxable year in the U.S. Holders holding period
  for the Common Shares in which the Company is a PFIC. If a U.S. Holder makes a
  QEF election after the first taxable year in the U.S. Holders holding period
  for the Common Shares in which the Company is a PFIC, then in addition to filing
  the QEF election documents, a U.S. Holder may elect to recognize gain (which
  will be taxed under the rules discussed below in The No Election
    Alternative) as if the Common Shares were sold on the qualification date.
  The qualification date is the first day of the first taxable year in which the
  Company is a QEF with respect to such U.S. Holder. The election to recognize
  such gain can only be made if such U.S. Holders holding period for the Common
  Shares includes the qualification date. By electing to recognize such gain, such
  U.S. Holder will be deemed to have made a timely QEF election. In addition, under very limited circumstances, a U.S. Holder may make a
  retroactive QEF election if such U.S. Holder failed to file the QEF election
  documents in a timely manner. If a U.S. Holder fails to make a QEF election for
  the first taxable year in the U.S. Holders holding period for the Common Shares
  in which the Company is a PFIC, and does not elect to recognize gain as if the
  Common Shares were sold on the qualification date, such holder will not be
  treated as having made a timely QEF election and will continue to be subject
  to the special taxation rules discussed below in The No Election
    Alternative.

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A QEF election will apply to the taxable year for which such
  QEF election is made and to all subsequent taxable years, unless such QEF
  election is invalidated or terminated or the IRS consents to revocation of such
  QEF election. If a U.S. Holder makes a QEF election and, in a subsequent taxable
  year, the Company ceases to be a PFIC, the QEF election will remain in effect
  (although it will not be applicable) during those taxable years in which the
  Company is not a PFIC. Accordingly, if the Company becomes a PFIC in another
  subsequent taxable year, the QEF election will be effective and the U.S. Holder
  will be subject to the QEF rules described above during any such subsequent
  taxable year in which the Company qualifies as a PFIC.

Each U.S. Holder should consult its own tax advisor regarding
  the availability of, and procedure for making, a QEF election. A U.S. Holder
  cannot make and maintain a valid QEF election unless the Company provides
  certain U.S. tax information necessary to make such an election. The Company
  expects to provide U.S. Holders with timely and accurate information as to its
  status as a PFIC and will use commercially reasonable efforts to provide to U.S.
  Holders holding Common Shares all information that a U.S. Holder making a QEF
  election with respect to the Company is required to obtain for U.S. federal
  income tax purposes. U.S. Holders should be aware that, with respect to any PFIC
  Subsidiary, there can be no assurance that the Company will satisfy record
  keeping requirements that apply to a QEF or that the Company will supply U.S.
  Holders with information that such U.S. Holders require to report under the QEF
  rules, in the event that the Company is a PFIC and a U.S. Holder wishes to make
  a QEF election with respect to such PFIC Subsidiary. Each U.S. Holder should
  consult its own tax advisor regarding the availability of, and procedure for
  making, a QEF election.

The Mark-to-Market Election Alternative

A U.S. Holder that holds marketable stock in a PFIC may avoid
  the imposition of the additional tax and interest described below by making a
  mark-to-market election in the first year of its holding period in such PFICs
  shares. The Common Shares will be marketable securities if they are regularly
  traded on a qualifying exchange that is either (i) a national securities
  exchange which is registered with the SEC or the national market system
  established pursuant to the Exchange Act, or (ii) any exchange or other market
  that the U.S. Treasury Department determines is adequate. The Company believes
  that the TSX and Nasdaq meet this test, and accordingly, provided that the
  Common Shares are regularly traded on the TSX or Nasdaq, a U.S. Holder should be
  able to make a mark-to-market election with respect to the Common Shares if the
  Company is classified as a PFIC.

If a U.S. Holder were to make a timely mark-to-market election
  with respect to Common Shares that it will own at the close of its taxable year,
  such electing U.S. Holder would include as ordinary income in that taxable year
  any excess of the fair market value of its Common Shares as of the close of such
  year over its adjusted tax basis in the Common Shares. In addition, the U.S.
  Holder may claim an ordinary loss deduction for the excess, if any, of its
  adjusted tax basis in the Common Shares over the fair market value of the Common
  Shares at the close of the taxable year, but only to the extent of any prior net
  mark-to-market gains. An electing U.S. Holders tax basis in its Common Shares
  will be adjusted to reflect any such income or loss. Any gain or loss on the
  sale of Common Shares will be ordinary income or loss, except that any loss will
  be ordinary loss only to the extent of the previously included net
  mark-to-market gain. An election to mark-to-market applies to the year for which
  the election is made and to subsequent years unless the PFIC shares cease to be marketable or the IRS
  consents to the revocation of the election. If the Company were to cease being a
  PFIC, a U.S. Holder that marked its Common Shares to market would not include
  mark-to-market gain or loss with respect to its Common Shares for any taxable
  year that the Company was not a PFIC.

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A mark-to-market election applies only to the non-U.S.
  corporation for which it is made. If the Company were a PFIC, a U.S. Holder
  would remain subject to the excess distribution rules with respect to its
  indirectly owned shares in any PFIC Subsidiary even if such U.S. Holder has made
  a mark-to-market election in respect of the Company.

The No Election Alternative

If a U.S. Holder does not make a timely mark-to-market election
  or a timely QEF election (a Non-Electing U.S. Holder) and the Company is a
  PFIC, then special taxation rules will apply to (i) gains realized on the
  disposition (or deemed to be realized by reason of a pledge) of such U.S.
  Holders Common Shares and (ii) certain excess distributions (generally,
  distributions received in the current taxable year that are in excess of 125% of
  the average distributions received during the three preceding years or, if
  shorter, such U.S. Holders holding period) by the Company.

Pursuant to these rules, a Non-Electing U.S. Holder generally
  would be required to pro rate all gains realized on the disposition of any of
  its Common Shares and all excess distributions on its Common Shares over its
  entire holding period. All gains or excess distributions allocated to prior
  years of a U.S. Holder (other than any year before the first taxable year of the
  Company during such U.S. Holders holding period for which it was a PFIC) would
  be taxed at the highest tax rate for each such prior year applicable to ordinary
  income. A Non-Electing U.S. Holder also would be liable for interest on the
  foregoing tax liability for each such prior year calculated as if such liability
  had been due with respect to each such prior year but had not been paid until
  the taxable year within which the gains or excess distributions have occurred. A
  Non-Electing U.S. Holder that is not a corporation would be required to treat
  this interest charge as personal interest which would be wholly nondeductible.
  The balance of the gain or the excess distribution would be treated as ordinary
  income in the year of the disposition or distribution, and no interest charge
  would be incurred with respect to such balance.

If the Company is a PFIC, a U.S. Holder would be deemed to own
  an interest in each of the Companys PFIC Subsidiaries for purposes of the PFIC
  rules, and therefore may be subject to the excess distribution rules on (i) a
  distribution with respect to the indirectly owned shares by a PFIC Subsidiary to
  the Company, (ii) a disposition by the Company of the indirectly owned shares in
  a PFIC Subsidiary, and (iii) a disposition by the U.S. Holder of Common Shares
  that reduces or terminates the U.S. Holders indirect ownership of shares in a
  PFIC Subsidiary.

If the Company is a PFIC for any taxable year during which a
  Non-Electing U.S. Holder holds Common Shares, then for purposes of applying the
  rules described above, the Company will continue to be treated as a PFIC with
  respect to such U.S. Holders Common Shares throughout such U.S. Holders entire
  holding period in its Common Shares, even if it is no longer a PFIC in
  subsequent years. A Non-Electing U.S. Holder may terminate this deemed PFIC
  status by electing to recognize gain (which will be taxed under the rules for a
  Non-Electing U.S. Holder) as if its Common Shares had been sold on the last day
  of the last taxable year for which the Company was a PFIC.

Each U.S. Holder is urged to consult its own tax advisor
  regarding the Companys PFIC classification, the consequences to such U.S.
  Holder of the Companys PFIC classification, and the availability and the
  consequences of making a mark-to-market or QEF election.

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Distributions on Common Shares

Subject to the discussion under Passive Foreign Investment
  Company (PFIC) Considerations above, the gross amount of any distribution
  paid by the Company will generally be subject to U.S. federal income tax as
  dividend income to the extent paid out of the Companys current or accumulated
  earnings and profits, as determined under U.S. federal income tax principles.
  Such amount will be includable in gross income by a U.S. Holder as ordinary
  income on the date such U.S. Holder actually or constructively receives the
  distribution. Dividends paid by the Company will not be eligible for the
  dividends received deduction generally allowed to corporations.

Subject to applicable exceptions with respect to short-term and
  hedged positions, certain dividends received by non-corporate U.S. Holders prior
  to January 1, 2013from a qualified foreign corporation may be eligible for
  reduced rates of taxation (qualified dividends). A qualified foreign
  corporation includes a foreign corporation that is eligible for the benefits of
  a comprehensive income tax treaty with the United States that the U.S. Treasury
  Department determines to be satisfactory for these purposes and that includes an
  exchange of information provision. The U.S. Treasury has determined that the Tax
  Convention meets these requirements, and the Company believes it is eligible for
  the benefits of the Tax Convention. Dividends received by U.S. investors from a
  foreign corporation that was a PFIC in either the taxable year of the
  distribution or the preceding taxable year will not constitute qualified
  dividends. As discussed above in Passive Foreign Investment Company (PFIC)
    Considerations, the Company believes that it was not a PFIC for its 2010
  taxable year and that it likely will not be a PFIC for its 2011 taxable year
  (and possibly subsequent taxable years). Accordingly, dividends paid on the
  Common Shares are not expected to constitute qualified dividends.

Dividends received by a U.S. Holder with respect to Common
  Shares will constitute foreign source income, which may be relevant in
  calculating the holders foreign tax credit limitation. The limitation on
  foreign taxes eligible for credit is calculated separately with respect to
  specific classes of income. For this purpose, dividends paid by the Company with
  respect to the Common Shares will, depending on a U.S. Holders circumstances,
  be passive category or general category income.

Subject to certain limitations, any Canadian tax withheld with
  respect to distributions made on the Common Shares may be treated as foreign
  taxes eligible for credit against a U.S. Holders U.S. federal income tax
  liability. Alternatively, a U.S. Holder may, subject to applicable limitations,
  elect to deduct the otherwise creditable Canadian withholding taxes for U.S.
  federal income tax purposes. The rules governing the foreign tax credit are
  complex and their application depends on each taxpayers particular
  circumstances. Accordingly, U.S. Holders are urged to consult their own tax
  advisors regarding the availability of the foreign tax credit under their
  particular circumstances.

To the extent that a distribution exceeds the amount of the
  Companys current or accumulated earnings and profits, as determined under U.S.
  federal income tax principles, it will be treated first as a tax-free return of
  capital, causing a reduction in the U.S. Holders adjusted basis in the Common
  Shares held by such U.S. Holder (thereby increasing the amount of gain, or
  decreasing the amount of loss, to be recognized by such U.S. Holder upon a
  subsequent disposition of the Common Shares), with any amount that exceeds the
  adjusted basis being taxed as a capital gain recognized on a sale or exchange
  (as discussed under Sale, Exchange or Other Taxable Disposition of Common
    Shares below). However, the Company does not intend to maintain
  calculations of earnings and profits in a manner necessary to enable U.S.
  Holders to determine the extent to which a distribution would be treated as a
  dividend. Each U.S. Holder should therefore assume that any distribution by the
  Company with respect to the Common Shares will constitute ordinary dividend
  income.

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The gross amount of distributions paid in any foreign currency
  will be included by each U.S. Holder in gross income in a U.S. dollar amount
  calculated by reference to the exchange rate in effect on the day the
  distributions are paid, regardless of whether the payment is in fact converted
  into U.S. dollars. If the foreign currency is converted into U.S. dollars on the
  date of the payment, the U.S. Holder should not be required to recognize any
  foreign currency gain or loss with respect to the receipt of the foreign
  currency distributions. If instead the foreign currency is converted at a later
  date, any currency gains or losses resulting from the conversion of the foreign
  currency will be treated as U.S. source ordinary income or loss.

Additional Tax and Passive Income

Certain U.S. holders, who are individuals, estates or trusts,
  will be required to pay a 3.5 percent tax on, among other things, dividends and
  capital gains from the sale of common shares for taxable years beginning as of
  December 31, 2012.

Sale, Exchange, or Other Taxable Disposition of Common
  Shares

Subject to the discussion above under Passive Foreign
  Investment Company (PFIC) Considerations, a U.S. Holder generally will
  recognize gain or loss on the sale, exchange or other taxable disposition of
  Common Shares in an amount equal to the difference between the amount realized
  on the disposition and the U.S. Holders adjusted tax basis in the Common
  Shares. Such gain or loss generally will be long-term capital gain or loss if
  the U.S. Holder held the Common Shares for more than one year at the time of the
  sale, exchange or other disposition. Preferential tax rates may apply to
  long-term capital gains or losses of a U.S. Holder that is an individual, trust
  or estate. The deductibility of capital losses is subject to significant
  limitations.

If a U.S. Holder receives any foreign currency on the sale of
  Common Shares, such U.S. Holder may recognize ordinary income or loss as a
  result of currency fluctuations between the date of the sale of Common Shares
  and the date the sale proceeds are converted into U.S. dollars.

U.S. Information Reporting and Backup Withholding
  Tax

Under U.S. federal income tax law and regulations, certain
  categories of U.S. Holders must file information returns with respect to their
  investment in, or involvement in, a foreign corporation. Penalties for failure
  to file certain of these information returns are substantial. U.S. Holders of
  the Common Shares should consult with their own tax advisors regarding the
  requirements of filing information returns.

Dividends and proceeds from the sale or other disposition of
  Common Shares that are paid in the United States or by a U.S.-related financial
  intermediary will be subject to U.S. information reporting rules, unless a U.S.
  Holder is a corporation or other exempt recipient. In addition, payments that
  are subject to information reporting may be subject to backup withholding
  (currently at a 28% rate) if a U.S. Holder does not provide its taxpayer
  identification number and otherwise comply with the backup withholding rules.
  Backup withholding is not an additional tax. Amounts withheld under the backup
  withholding rules are available to be credited against a U.S. Holders U.S.
  federal income tax liability and may be refunded to the extent they exceed such
  liability, provided the required information is provided to the IRS in a timely
  manner.

| | F. | Dividends and Paying Agents
| | -- | ---------------------------

This Form 20-F is being filed as an annual report under the
  Exchange Act, and, as such, there is no requirement to provide any information
  under this item.

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| | G. | Statement by Experts
| | -- | --------------------

This Form 20-F is being filed as an annual report under the
  Exchange Act, and, as such, there is no requirement to provide any information
  under this item.

| | H. | Documents on Display
| | -- | --------------------

Any of the documents referred to above can be viewed at our
  registered office, which is located at Suite 1400 - 999 West Hastings Street,
  Vancouver, British Columbia, Canada. All of these documents are in English.

| | I. | Subsidiary Information
| | -- | ----------------------

This information is not required for reports filed in the
  United States.

|Item 11 | Quantitative and Qualitative Disclosures
      About Market Risk
|------- | ----------------------------------------------------------------

Our primary market risk exposures are interest rate risk and
  foreign currency risk. We are exposed to interest rate risk on our cash and cash
  equivalents.

Our reporting currency is the United States dollar. We are
  exposed to foreign exchange risk associated with purchases of goods and
  equipment denominated in U.S. dollars, cash and cash equivalents. Gains and
  losses resulting from the effects of changes in the U.S. dollar to Canadian
  dollar exchange rate are recorded in income.

Market Risk

|i) | 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 Canadian dollar and Argentine
      peso.                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | During the year, we recognized a foreign exchange gain of
      $1,239,000 (2009 - $4,993,000, 2008 - $200,000). As at December 31, our
      exposure to foreign exchange risk in currencies other than the U.S. dollar
      is stated in the table below. Based on the net exposures at December 31,
      2009, a 10% depreciation or appreciation of the currencies against the
      U.S. dollar would result in a decrease or increase, respectively, in our
      net earnings by $23,313,000 as set out in more detail in the table
      below.

| |                             |  | December 31, 2010 |   |  | -10% Income |   |  | +10% Income |  
| | --------------------------- |  | ----------------- | - |  | ----------- | - |  | ----------- | -
| |                             |  | Amount            |   |  | (Loss)      |   |  | (Loss)      |  
| |                             |  | ($'000            | ) |  | ($'000      | ) |  | ($'000      | )
| |                             |  |                   |   |  |             |   |  |             |  
| | Cash and cash equivalents   |  |                   |   |  |             |   |  |             |  
| | Canadian dollar             |  | 164,557           |   |  | (349        | ) |  | 349         |  
| | Mexican
      peso          |  | 487               |   |  | (22         | ) |  | 21          |  
| | Argentinean peso            |  | 9,588             |   |  | (409        | ) |  | 409         |  
| | Australian dollar           |  | 151               |   |  | (13         | ) |  | 13          |  
| | Peruvian soles              |  | 278               |   |  | (4          | ) |  | 4           |  
| |                             |  | 175,061           |   |  | (797        | ) |  | 796         |  
| | Convertible debenture       |  |                   |   |  |             |   |  |             |  
| | Canadian
      dollar       |  | 7,180             |   |  | (608        | ) |  | 608         |  
| | Value added tax recoverable |  |                   |   |  |             |   |  |             |  
| | Mexican
      peso          |  | 7                 |   |  | (52         | ) |  | 52          |  

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| | Argentinean peso                               |  | 70,775  |   |  | (5,405 | ) |  | 5,405  |  
| | ---------------------------------------------- |  | ------- | - |  | ------ | - |  | ------ | -
| |                                                |  | 70,782  |   |  | (5,457 | ) |  | 5,457  |  
| | Accounts payable and accrued
      liabilities |  |         |   |  |        |   |  |        |  
| | Canadian dollar                                |  | (5,984  | ) |  | 164    |   |  | (163   | )
| | Mexican
      peso                             |  | (219    | ) |  | 16     |   |  | (17    | )
| | Argentinean peso                               |  | (13,044 | ) |  | 1,700  |   |  | (1,700 | )
| | Australian dollar                              |  | (12     | ) |  | 2      |   |  | (2     | )
| | Peruvian soles                                 |  | (638    | ) |  | 19     |   |  | (18    | )
| |                                                |  | (19,897 | ) |  | 1,901  |   |  | (1,900 | )
| |                                                |  | 233,126 |   |  | (4,961 | ) |  | 4,961  |  

|ii)  | Interest Rate Risk                                                                                                                                                                                                                                                                                                        
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                           
|     | Our interest rate risk mainly arises from the interest
      rate impact on our cash and cash equivalents. Cash and cash equivalents
      earn 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, 2010, the weighted average interest
      rate of our cash equivalents investment was 6.89% (2008  0.081%). With
      other variables unchanged, a 1% increase (decrease) in the interest rate
      would increase (decrease) our net earnings by $613,000 (2008 -
      $643,000).                 
|     |                                                                                                                                                                                                                                                                                                                           
|iii) | 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:                                              
|     |                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                           

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.

Limitations

The above discussion includes only those exposures that exist
  as of December 31, 2010 and as a result, does not consider exposures or
  positions that could arise after that date. Our ultimate realized gain or loss
  with respect to interest rate and exchange rate fluctuations would depend on the
  exposures that arise during the period and interest and foreign exchange rates.
  Reference is made to note 6(d) to the consolidated financial statements for a description of financial risk
  management. See also Item 5.B “Liquidity and Capital Resources” for a discussion of credit risk, liquidity risk
  and capital risk.

- 149 -

---

|Item 12 | Description of Securities Other than
      Equity Securities
|------- | ------------------------------------------------------------

This Form 20-F is being filed as an annual report under the
  Exchange Act, and as such, there is no requirement to provide any information
  under this item.

PART II

|Item 13 | Defaults, Dividend Arrearages and
      Delinquencies
|------- | -----------------------------------------------------

Not applicable.

|Item 14 | Material Modifications to the Rights of
      Security Holders and Use of Proceeds
|------- | ----------------------------------------------------------------------------------

Not applicable.

|Item 15 | Controls and Procedures
|------- | -----------------------

Our management, with the participation of the President and
  Chief Executive Officer (our principal executive officer) and Vice President,
  Finance and Chief Financial Officer (our principal financial officer), has
  evaluated the effectiveness of our disclosure controls and procedures (as
  defined in the rules of the Canadian Securities Administrators and the SEC) as
  at December 31, 2010, and has concluded that such disclosure controls and
  procedures are effective.

The following report is provided by management in respect of
  internal control over financial reporting (as defined in the rules of the
  Canadian Securities Administrators 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, 2010, management assessed the
      effectiveness of our internal control over financial reporting and
      concluded that such internal control over financial reporting was
      effective and that there were no material weaknesses in our internal
      control over financial reporting as of that date.                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(4) | PricewaterhouseCoopers LLP, who has audited our
      consolidated financial statements for the year ended December 31, 2010,
      has also issued a report on our financial statements and internal controls
      under the standards of the Public Company Accounting Oversight Board
      (United States). See Item 19.A - Financial
      Statements.                                                                                                                                                                                                                                                                                                                                                                

- 150 -

---

There have been no changes in our internal control over
  financial reporting during the year ended December 31, 2010, that have
  materially affected, or are reasonably likely to materially affect our internal
  control over financial reporting.

It should be noted that while our principal executive officer
  and principal financial officer believe that our disclosure controls and
  procedures and internal controls over financial reporting provide a reasonable
  level of assurance that they are effective, they do not expect that our
  disclosure controls and procedures or internal controls over financial reporting
  will prevent all errors and fraud. A control system, no matter how well
  conceived or operated, can provide only reasonable, not absolute, assurance that
  the objectives of the control system are met.

|Item 16 | Reserved
|------- | --------

| | A. | Audit Committee Financial Expert.
| | -- | ---------------------------------

Our Board of Directors has determined that we have an audit
  committee financial expert, John R. Brodie, FCA. Mr. Brodie, FCA is the Chair of
  our Audit Committee and independent as that term is defined in the listing
  standards of the Nasdaq Global Market. Our Audit Committee consists of the
  following independent and financially literate directors; John R. Brodie, FCA,
  Richard D. Paterson and Peter W. Tomsett.

For more information regarding relevant education and
  experience for Messrs. Brodie, Paterson and Tomsett, see Item 6.A  Directors
  and Senior Management.

The Companys Audit Committee Charter is attached as Exhibit
  99.1 to this Annual Report.

| | B. | Code of Ethics.
| | -- | ---------------

We have adopted a Code of Business Conduct that applies to our
  principal executive officer, principal financial officer and other senior
  financial officers performing similar functions. Our Code of Business Conduct is
  available for viewing on our website at www.silverstandard.com.

In 2010, no waivers from the Code were granted to members of
  senior management or directors of the Company.

| | C. | Principal Accountant Fees and Services.
| | -- | ---------------------------------------

The following is a summary of the aggregate fees billed for
  each of the last two fiscal years by our principal accountant.

|Principal
      Accountant | Fiscal year  |                |               
|-------------------------- | ------------ | -------------- | --------------
|Fees and Services          | ended        | Fiscal year    | Fiscal year   
|                           | December 31, | ended December | ended December
|                           | 2010(1)      | 31, 2009(1)    | 31, 2008(1)   
|                           | C$           | $              | $             
|Audit Fees(2)              | 428,482      | 218,153        | 188,785       
|Audit-Related Fees(3)      | 191,530      | 212,259        | 171,965       
|Tax-Related Fees           | -            | -              | -             
|All Other Fees             | -            | -              | -             
|Total                      | 620,012      | 430,412        | 360,750       

- 151 -

---

| | (1) | Fees that are paid in Canadian dollars and amounts in the
      above table have been translated at the average US/Cdn exchange rate of
      1.0346 for 2010 and 1.142 for 2009, and 1.066 for 2008.                                                                                                         
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Audit fees were paid for professional services rendered
      by the auditor for the integrated audit of our annual financial
      statements, including its audit of the effectiveness of our internal
      control over financial reporting, and the financial statement audits of
      our subsidiaries.
| | (3) | Audit-related fees were paid for assurance and related
      services provided in connection with statutory and regulatory filings and
      engagements related to prospectuses and other offering
  documents.                                                                                              

Pre-Approval Policies and Procedures

Our Audit Committee has established policies and procedures
that are intended to control the services provided by our auditors and to
monitor their continuing independence. Under these policies, no services may be
undertaken by our auditors unless the engagement is specifically approved by our
Audit Committee or the services are included within a category which has been
pre-approved by our Audit Committee. The maximum charge for services is
established by the Audit Committee when the specific engagement is approved or
the category of services pre-approved. Management is required to notify the
Audit Committee of the nature and value of pre-approved services undertaken.

Our Audit Committee will not approve engagements relating to,
or pre-approve categories of, non-audit services to be provided by our auditors
(i) if such services are of a type the performance of which would cause our
auditors to cease to be independent within the meaning of applicable SEC or
Nasdaq rules, and (ii) without consideration, among other things, of whether our
auditors are best situated to provide the required services and whether the
required services are consistent with their role as auditor.

All services provided by our principal accountant in 2010 were
pre-approved by our audit committee.

| | D. | Exemptions from the Listing Standards for
      Audit Committees.
| | -- | -----------------------------------------------------------------

Not applicable.

| | E. | Purchases of Equity Securities by the Issuer
      and Affiliated Purchasers.
| | -- | -----------------------------------------------------------------------------

Not applicable.

| | F. | Change in Registrants Certifying
      Accountant.
| | -- | ---------------------------------------------------

Not applicable.

| | G. | Corporate Governance.
| | -- | ---------------------

We are subject to a variety of corporate governance guidelines
and requirements enacted by the TSX, the Nasdaq and by the SEC under its rules
and those mandated by the U.S. Sarbanes Oxley Act of 2002. Today, we are in
compliance with the corporate governance legal requirements in Canada and the
United States. We are listed on the Nasdaq and, although we are not required to
comply with all of the Nasdaqs corporate governance requirements to which we
would be subject if we were a U.S. corporation, our governance practices comply
with the Nasdaqs requirements as if we were a U.S. domestic issuer.

PART III

|Item 17 | Financial Statements
|------- | --------------------

Not applicable.

- 152 -

---

|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 21 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.

| | A. | Financial Statements
| | -- | --------------------

|Document                                                                                                                                         | Page
|------------------------------------------------------------------------------------------------------------------------------------------------ | ----
|Consolidated Financial Statements as at
      December 31, 2010, 2009 and 2008                                                                   | F-1 
|Auditors Report, dated February 28, 2011                                                                                                        | F-3 
|Consolidated Balance Sheets as at December
      31, 2010 and December 31, 2009                                                                  | F-5 
|Consolidated Statements of Earnings (Loss)
      for the years ended December 31, 2010, December 31, 2009 and December 31,
      2008            | F-6 
|Consolidated Statements of Cash Flows for the
      years ended December 31, 2010, December 31, 2009 and December 31, 2008                       | F-7 
|Consolidated Statement of Comprehensive
      Income (Loss) for the years ended December 31, 2010, December 31, 2009 and
      December 31, 2008 | F-8 
|Consolidated Statements of Shareholders
      Equity for the years ended December 31, 2010, December 31, 2009 and
      December 31, 2008       | F-9 
|Notes to Consolidated Financial Statements
      for the years ended December 31, 2010, December 31, 2009 and December 31,
      2008            | F-10

- 153 -

---

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

|Exhibit Number | Description                                                                                                                                                                                                                                                                                                                                          
|-------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1            | 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.
|4.1            | Underwriting Agreement dated
          August 12, 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 August 13, 2009.                                                                                         
|4.2            | Underwriting Agreement dated
          February 12, 2010 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 12, 2010.                                                                                     
|4.3            | Acquisition Agreement dated October 28, 2010 between the Company and Pretium Resources Inc.                                                                                                                                                                                                                                                          
|4.4            | Underwriting Agreement dated December 9, 2010.                                                                                                                                                                                                                                                                                                       
|8.1            | List of Significant Subsidiaries
          (as defined in Rule 1-02(w) of Regulation S-X) included under Item 4.C,
      Organizational Structure.                                                                                                                                                                                                   
|12.1           | Certification
          of President and Chief Executive Officer Pursuant to Section 302 of
          the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                 
|12.2           | Certification
          of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
          Act of 2002.                                                                                                                                                                                                                              
|13.1           | Certification
          of President and Chief Executive Officer Pursuant to 18 U.S.C. Section
          1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
          2002.                                                                                                                                                       

- 154 -

---

|Exhibit Number | Description                                                                                                                                                       
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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.
|99.1           | Audit Committee Charter                                                                                                                                           

- 155 -

---

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 annual report on its behalf.

|                     |     | Silver Standard Resources Inc.           
|-------------------- | --- | -----------------------------------------
|                     |     | (Company)                                
|                     |     |                                          
|                     |     |                                          
|                     | By: | /s/ John Smith                           
|                     |     | John Smith, President and Chief Executive
|                     |     | Officer and Director                     
|                     |     |                                          
|Date: March 31, 2011 |     |                                          

- 156 -

---

Silver Standard Resources Inc.

Consolidated Financial StatementsDecember 31, 2010, 2009
      and 2008(expressed in thousands of United States dollars)

F-1

---

Managements Responsibility for the Financial
  Statements

The preparation and presentation of the accompanying
  consolidated financial statements, Management Discussion and Analysis
  (MD&A) and all financial information in the Annual Report are the
  responsibility of management and have been approved by the Board of
  Directors.

The consolidated financial statements have been prepared in
  accordance with Canadian generally accepted accounting principles. Financial
  statements, by nature, are not precise since they include certain amounts based
  upon estimates and judgments. When alternative methods exist, management has
  chosen those it deems to be the most appropriate in the circumstances. The
  financial information presented elsewhere in the Annual Report is consistent
  with that in the consolidated financial statements.

Management, under the supervision of and the participation of
  the President and Chief Financial Officer, have a process in place to evaluate
  disclosure controls and procedures and internal control over financial reporting
  as required by Canadian and U.S. securities regulations. We, as President and
  Chief Financial Officer, will certify our annual filings with the CSA and SEC as
  required in Canada by National Instrument 52-109 and in the United States as
  required by the Sarbanes-Oxley Act of 2002.

The Board of Directors is responsible for ensuring that
  management fulfills its responsibilities for financial reporting and is
  ultimately responsible for reviewing and approving the consolidated financial
  statements. The Board carries out this responsibility principally through its
  Audit Committee which is independent from management.

The Audit Committee is appointed by the Board of Directors and
  reviews the consolidated financial statements and MD&A; considers the report
  of the external auditors; assesses the adequacy of our internal controls,
  including managements assessment described below; examines the fees and
  expenses for audit services; and recommends to the Board the independent
  auditors for appointment by the shareholders. The independent auditors have full
  and free access to the Audit Committee and meet with it to discuss their audit
  work, our internal control over financial reporting and financial reporting
  matters. The Audit Committee reports its findings to the Board for consideration
  when approving the consolidated financial statements for issuance to the
  shareholders and managements assessment of the internal control over financial
  reporting.

Managements Report on Internal Control over Financial
  Reporting

Management is responsible for establishing and maintaining
  adequate internal control over financial reporting.

Management has assessed the effectiveness of our internal
  control over financial reporting as of December 31, 2010 using criteria
  established in Internal Control  Integrated Framework issued by the Committee
  of Sponsoring Organizations of the Treadway Commission. Based on this
  evaluation, management concluded that our internal control over financial
  reporting was effective as of December 31, 2010.

PricewaterhouseCoopers LLP, our auditor, has audited the
  effectiveness of our internal control over financial reporting as of December
  31, 2010, as stated in their report which appears herein.

|John Smith      | Tom S.Q. Yip         
|----------------- | -----------------------
|John Smith        | Tom S.Q. Yip           
|President         | Chief Financial Officer
|                  |                        
|February 28, 2011 |                        

F-2

---

Independent Auditors Report

To the Shareholders of Silver Standard Resources
  Inc.

We have completed integrated audits of Silver Standard
  Resources Inc.s ( the Company) December 31, 2010, 2009 and 2008 consolidated
  financial statements and an audit of the effectiveness of the Companys internal
  control over financial reporting as at December 31, 2010. Our opinions, based on
  our audits, are presented below.

Report on the consolidated financial statementsWe
  have audited the accompanying consolidated financial statements of Silver
  Standard Resources Inc., which comprise the consolidated balance sheets as at
  December 31, 2010 and December 31, 2009, and the consolidated statements of
  earnings (loss), comprehensive income (loss), shareholders equity and cash
  flows for each of the three years in the period ended December 31, 2010, and the
  related notes including a summary of significant accounting policies.

Managements responsibility for the consolidated financial
  statementsManagement is responsible for the preparation and fair
  presentation of these consolidated financial statements in accordance with
  Canadian generally accepted accounting principles and for effective internal
  control over financial reporting to enable the preparation of consolidated
  financial statements that are free from material misstatement, whether due to
  fraud or error.

Auditors responsibilityOur responsibility is to
  express an opinion on these consolidated financial statements based on our
  audits. We conducted our audits 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 consolidated financial
  statements are free from material misstatement. Canadian generally accepted
  auditing standards require that we comply with ethical requirements.

An audit involves performing procedures to obtain audit
  evidence, on a test basis, about the amounts and disclosures in the consolidated
  financial statements. The procedures selected depend on the auditors judgment,
  including the assessment of the risks of material misstatement of the
  consolidated financial statements, whether due to fraud or error. In making
  those risk assessments, the auditor considers internal control relevant to the
  Companys preparation and fair presentation of the consolidated financial
  statements in order to design audit procedures that are appropriate in the
  circumstances. An audit also includes evaluating the appropriateness of
  accounting principles and policies used and the reasonableness of accounting
  estimates made by management, as well as evaluating the overall presentation of
  the consolidated financial statements.

We believe that the audit evidence we have obtained in our
  audits is sufficient and appropriate to provide a basis for our audit
  opinion.

OpinionIn our opinion, the consolidated financial
  statements present fairly, in all material respects, the financial position of
  Silver Standard Resources Inc. as at December 31, 2010 and December 31, 2009 and
  the results of its operations and cash flows for each of the three years in the
  period ended December 31, 2010 in accordance with Canadian generally accepted
  accounting principles.

F-3

---

Report on internal control over financial reporting
  We have also audited Silver Standard Resources Inc.s internal
  control over financial reporting as at December 31, 2010, based on criteria
  established in Internal Control - Integrated Framework, issued by the Committee
  of Sponsoring Organizations of the Treadway Commission (COSO).

Managements responsibility for internal control over
  financial reportingThe 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 Managements Report on Internal Controls over Financial
  Reporting.

Auditors responsibilityOur responsibility is to
  express an opinion on the Companys internal control over financial reporting
  based on our audit. 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
  audit opinion on the Companys internal control over financial reporting.

Definition of internal control over financial
  reportingA 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.

Inherent limitationsBecause 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.

OpinionIn our opinion, Silver Standard Resources
  Inc. maintained, in all material respects, effective internal control over
  financial reporting as at December 31, 2010 based on criteria established in
  Internal Control  Integrated Framework issued by COSO.

Signed PricewaterhouseCoopers LLP

Chartered AccountantsFebruary 28, 2011 
  Vancouver, Canada

F-4

---

|Silver Standard Resources Inc.                   
|-------------------------------------------------
|Consolidated Balance Sheets                      
|As at December 31,
      2010 and 2009           
|(expressed in thousands of United States dollars)

|                                                            |  | Note     |  | 2010      |  |  | 2009    |  
|----------------------------------------------------------- |  | -------- |  | --------- |  |  | ------- | -
|                                                            |  |          |  | **$**     |  |  | **$**   |  
|Assets                                                      |  |          |  |           |  |  |         |  
|Current assets                                              |  |          |  |           |  |  |         |  
|Cash and cash equivalents                                   |  |          |  | 232,311   |  |  | 26,659  |  
|Accounts receivable                                         |  |          |  | 30,323    |  |  | 6,238   |  
|Marketable securities                                       |  | 6b       |  | 33,465    |  |  | 17,863  |  
|Inventories                                                 |  | 5        |  | 40,176    |  |  | 20,565  |  
|Prepaid expenses and deposits                               |  |          |  | 5,779     |  |  | 2,013   |  
|Asset held for sale                                         |  | 10b (ii) |  | -         |  |  | 1,859   |  
|                                                            |  |          |  | 342,054   |  |  | 75,197  |  
|                                                            |  |          |  |           |  |  |         |  
|Restricted cash                                             |  | 12       |  | 2,071     |  |  | 1,934   |  
|Convertible debenture receivable                            |  | 6c       |  | 7,180     |  |  | 6,081   |  
|Value added tax recoverable                                 |  | 8        |  | 70,782    |  |  | 54,095  |  
|Investment accounted for under the equity method            |  | 9        |  | 226,271   |  |  | -       |  
|Mineral properties and property, plant,
      and equipment |  | 10       |  | 613,659   |  |  | 612,618 |  
|                                                            |  |          |  |           |  |  |         |  
|                                                            |  |          |  | 1,262,017 |  |  | 749,925 |  
|Liabilities and Shareholders' Equity                        |  |          |  |           |  |  |         |  
|Current liabilities                                         |  |          |  |           |  |  |         |  
|Accounts payable and accrued liabilities                    |  |          |  | 32,132    |  |  | 48,265  |  
|Accrued interest on convertible notes                       |  | 11       |  | 2,076     |  |  | 2,076   |  
|Current portion of future income tax liability              |  | 16       |  | 3,047     |  |  | -       |  
|Current portion of asset retirement
      obligations       |  | 12       |  | 955       |  |  | 341     |  
|                                                            |  |          |  | 38,210    |  |  | 50,682  |  
|                                                            |  |          |  |           |  |  |         |  
|Asset retirement obligations                                |  | 12       |  | 12,768    |  |  | 11,150  |  
|Taxes payable                                               |  |          |  | 3,672     |  |  | 3,370   |  
|Future income tax liability                                 |  | 16       |  | 57,392    |  |  | 36,798  |  
|Long-term convertible notes                                 |  | 11       |  | 118,203   |  |  | 110,739 |  
|                                                            |  |          |  | 230,245   |  |  | 212,739 |  
|                                                            |  |          |  |           |  |  |         |  
|                                                            |  |          |  |           |  |  |         |  
|Shareholders' Equity                                        |  |          |  |           |  |  |         |  
|Share capital                                               |  | 13       |  | 671,542   |  |  | 538,700 |  
|Value assigned to stock options                             |  | 13       |  | 42,660    |  |  | 40,417  |  
|Value assigned to convertible notes                         |  | 11       |  | 37,383    |  |  | 37,383  |  
|Contributed surplus                                         |  |          |  | 510       |  |  | 510     |  
|Accumulated other comprehensive income
      (loss)         |  |          |  | 1,515     |  |  | (11,747 | )
|Retained earnings (deficit)                                 |  |          |  | 277,666   |  |  | (68,573 | )
|Equity attributable to Silver Standard
      shareholders   |  |          |  | 1,031,276 |  |  | 536,690 |  
|                                                            |  |          |  |           |  |  |         |  
|Non-controlling interest                                    |  |          |  | 496       |  |  | 496     |  
|                                                            |  |          |  |           |  |  |         |  
|Total Shareholders' Equity                                  |  |          |  | 1,031,772 |  |  | 537,186 |  
|                                                            |  |          |  |           |  |  |         |  
|                                                            |  |          |  | 1,262,017 |  |  | 749,925 |  

Subsequent events (note 10b (i) and 20) 
  Commitments (note
  6d)

Approved on behalf of the Board of Directors

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

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

F-5

---

|Silver Standard Resources Inc.                                                   
|---------------------------------------------------------------------------------
|Consolidated Statements of Earnings (Loss)                                       
|For the years
      ended December 31, 2010, 2009 and 2008                       
|(expressed in thousands of United States dollars, except
      per share amounts)

|                                                                           |  | Note |  |  | 2010    |   |  | 2009    |   |  | 2008    |  
|-------------------------------------------------------------------------- |  | ---- |  |  | ------- | - |  | ------- | - |  | ------- | -
|                                                                           |  |      |  |  | **$**   |   |  | **$**   |   |  | **$**   |  
|                                                                           |  |      |  |  |         |   |  |         |   |  |         |  
|Revenue                                                                    |  |      |  |  | 112,256 |   |  | 5,442   |   |  | -       |  
|                                                                           |  |      |  |  |         |   |  |         |   |  |         |  
|Cost of sales                                                              |  |      |  |  | 75,971  |   |  | 5,926   |   |  | -       |  
|Depletion, depreciation and amortization                                   |  |      |  |  | 26,327  |   |  | 2,039   |   |  | -       |  
|Earnings (Loss) from mine operations                                       |  |      |  |  | 9,958   |   |  | (2,523  | ) |  | -       |  
|                                                                           |  |      |  |  |         |   |  |         |   |  |         |  
|General and administration expense                                         |  |      |  |  | 20,853  |   |  | 10,287  |   |  | 9,031   |  
|Stock-based compensation expense                                           |  | 13b  |  |  | 8,868   |   |  | 6,319   |   |  | 9,601   |  
|Property examination and exploration
      expense                         |  |      |  |  | 2,400   |   |  | 459     |   |  | 340     |  
|Reclamation and accretion expense                                          |  | 12   |  |  | 1,669   |   |  | 366     |   |  | 318     |  
|                                                                           |  |      |  |  |         |   |  | -       |   |  | -       |  
|Loss from operations                                                       |  |      |  |  | (23,832 | ) |  | (19,954 | ) |  | (19,290 | )
|                                                                           |  |      |  |  |         |   |  |         |   |  |         |  
|Other income (expenses)                                                    |  |      |  |  |         |   |  |         |   |  |         |  
|Investment income                                                          |  |      |  |  | 1,400   |   |  | 1,100   |   |  | 3,039   |  
|Foreign exchange gain                                                      |  |      |  |  | 1,239   |   |  | 4,993   |   |  | 200     |  
|Gain on sale of mineral
      properties and property, plant and equipment |  | 10b  |  |  | 402,009 |   |  | 167     |   |  | 31,463  |  
|Other income (expense)                                                     |  | 18   |  |  | 2,713   |   |  | (2,712  | ) |  | 3,109   |  
|Interest expense and financing
      fees                                  |  | 11   |  |  | (13,916 | ) |  | (1,095  | ) |  | (6,499  | )
|Share of loss of equity investee                                           |  | 9    |  |  | (77     | ) |  | -       |   |  | -       |  
|                                                                           |  |      |  |  | 393,368 |   |  | 2,453   |   |  | 31,312  |  
|                                                                           |  |      |  |  |         |   |  |         |   |  |         |  
|Earnings (loss) before income taxes                                        |  |      |  |  | 369,536 |   |  | (17,501 | ) |  | 12,022  |  
|                                                                           |  |      |  |  |         |   |  |         |   |  |         |  
|Income tax recovery (expense):                                             |  |      |  |  |         |   |  |         |   |  |         |  
|Current income taxes                                                       |  | 16   |  |  | (2,600  | ) |  | 2,221   |   |  | (14,575 | )
|Future income taxes                                                        |  | 16   |  |  | (20,697 | ) |  | 2,087   |   |  | (3,393  | )
|                                                                           |  |      |  |  |         |   |  |         |   |  |         |  
|                                                                           |  |      |  |  | (23,297 | ) |  | 4,308   |   |  | (17,968 | )
|                                                                           |  |      |  |  |         |   |  |         |   |  |         |  
|Earnings (Loss) for the year                                               |  |      |  |  | 346,239 |   |  | (13,193 | ) |  | (5,946  | )
|                                                                           |  |      |  |  |         |   |  |         |   |  |         |  
|Weighted average shares outstanding
      (thousands)                      |  |      |  |  |         |   |  |         |   |  |         |  
|Basic                                                                      |  |      |  |  | 77,972  |   |  | 68,845  |   |  | 62,694  |  
|Diluted                                                                    |  |      |  |  | 78,356  |   |  | 68,845  |   |  | 62,694  |  
|                                                                           |  |      |  |  |         |   |  |         |   |  |         |  
|Earnings (Loss) per share                                                  |  | 13d  |  |  |         |   |  |         |   |  |         |  
|Basic                                                                      |  |      |  |  | 4.44    |   |  | (0.19   | ) |  | (0.09   | )
|Diluted                                                                    |  |      |  |  | 4.42    |   |  | (0.19   | ) |  | (0.09   | )

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

F-6

---

|Silver Standard Resources Inc.                            
|----------------------------------------------------------
|Consolidated Statements of Cash Flows                     
|For the years
      ended December 31, 2010, 2009 and 2008
|(expressed in thousands of United States dollars)         

|                                                                               |  | Note |  |  | 2010     |   |  | 2009     |   |  | 2008     |  
|------------------------------------------------------------------------------ |  | ---- |  |  | -------- | - |  | -------- | - |  | -------- | -
|                                                                               |  |      |  |  | **$**    |   |  | **$**    |   |  | **$**    |  
|                                                                               |  |      |  |  |          |   |  |          |   |  |          |  
|Operating activities                                                           |  |      |  |  |          |   |  |          |   |  |          |  
|Earnings (loss) for the year                                                   |  |      |  |  | 346,239  |   |  | (13,193  | ) |  | (5,946   | )
|Items not affecting cash                                                       |  |      |  |  |          |   |  |          |   |  |          |  
|Depletion, depreciation
      and amortization                                 |  |      |  |  | 26,609   |   |  | 2,268    |   |  | 288      |  
|Stock-based compensation                                                       |  |      |  |  | 8,868    |   |  | 6,319    |   |  | 9,601    |  
|Asset retirement
      obligations accretion                                   |  |      |  |  | 1,503    |   |  | 346      |   |  | 335      |  
|Gain on sale of mineral
      properties and property, plant and equipment     |  | 10   |  |  | (402,009 | ) |  | (167     | ) |  | (31,463  | )
|Loss (gain) on sale of
      investments and assets                            |  |      |  |  | (3,114   | ) |  | 1,279    |   |  | (25,789  | )
|Unrealized (gain) loss on held-for-trading financial instruments               |  |      |  |  | 102      |   |  | (412     | ) |  | (114     | )
|Accretion expense on
      convertible notes                                   |  |      |  |  | 7,464    |   |  | 571      |   |  | 1,283    |  
|Accrued
      interest on convertible debenture                                |  |      |  |  | (865     | ) |  | (703     | ) |  | (339     | )
|Write-down of mineral
      properties                                         |  |      |  |  | 238      |   |  | 377      |   |  | -        |  
|Write-down of investments and convertible debenture                            |  |      |  |  | -        |   |  | 4,115    |   |  | 22,794   |  
|Share of loss of equity
      investee                                         |  |      |  |  | 77       |   |  | -        |   |  | -        |  
|Future
      income tax (recovery) expense                                     |  |      |  |  | 17,650   |   |  | (2,087   | ) |  | 3,393    |  
|Increase in non-current
      taxes payable                                    |  |      |  |  | -        |   |  | -        |   |  | 3,180    |  
|Foreign
      exchange (gain) loss                                             |  |      |  |  | 2,325    |   |  | (3,653   | ) |  | (9,163   | )
|Increase (decrease) in non-cash working capital items                          |  | 17   |  |  | (16,197  | ) |  | (35,003  | ) |  | 12,847   |  
|Cash used in operating activities                                              |  |      |  |  | (11,110  | ) |  | (39,943  | ) |  | (19,093  | )
|                                                                               |  |      |  |  |          |   |  |          |   |  |          |  
|Financing activities                                                           |  |      |  |  |          |   |  |          |   |  |          |  
|Shares issued for cash                                                         |  |      |  |  | 130,707  |   |  | 155,578  |   |  | 2,192    |  
|Share issue cash costs                                                         |  |      |  |  | (6,631   | ) |  | (9,165   | ) |  | -        |  
|Proceeds from issuance of convertible notes                                    |  |      |  |  | -        |   |  | -        |   |  | 138,000  |  
|Financing costs related to equity portion
      of convertible notes financing |  |      |  |  | -        |   |  | -        |   |  | (1,473   | )
|Cash generated by financing activities                                         |  |      |  |  | 124,076  |   |  | 146,413  |   |  | 138,719  |  
|                                                                               |  |      |  |  |          |   |  |          |   |  |          |  
|Investing activities                                                           |  |      |  |  |          |   |  |          |   |  |          |  
|Expenditures on mineral properties                                             |  |      |  |  | (52,912  | ) |  | (25,157  | ) |  | (36,756  | )
|Settlement of payables for property, plant and equipment                       |  |      |  |  | (50,564  | ) |  | (127,037 | ) |  | (132,919 | )
|Increase in value added tax recoverable
      (net)                            |  |      |  |  | (19,344  | ) |  | (23,763  | ) |  | (24,401  | )
|Proceeds from sale of marketable securities and other
      investments        |  |      |  |  | 11,015   |   |  | 24,133   |   |  | 2,780    |  
|Proceeds from sale of silver bullion                                           |  |      |  |  | -        |   |  | -        |   |  | 39,648   |  
|Net proceeds from sale of mineral properties                                   |  |      |  |  | 204,491  |   |  | -        |   |  | 22,435   |  
|Cash generated (used in) investing
      activities                            |  |      |  |  | 92,686   |   |  | (151,824 | ) |  | (129,213 | )
|                                                                               |  |      |  |  |          |   |  |          |   |  |          |  
|Increase (decrease) in cash and cash
      equivalents                         |  |      |  |  | 205,652  |   |  | (45,354  | ) |  | (9,587   | )
|                                                                               |  |      |  |  |          |   |  |          |   |  |          |  
|Cash and cash equivalents - Beginning of
      year                            |  |      |  |  | 26,659   |   |  | 72,013   |   |  | 81,600   |  
|                                                                               |  |      |  |  |          |   |  |          |   |  |          |  
|Cash and cash equivalents - End of
      year                                  |  |      |  |  | 232,311  |   |  | 26,659   |   |  | 72,013   |  

Supplementary cash flow information (note 17)

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

F-7

---

|Silver Standard Resources Inc.                            
|----------------------------------------------------------
|Consolidated Statements of Comprehensive Income (Loss)    
|For the years
      ended December 31, 2010, 2009 and 2008
|(expressed in thousands of United States dollars)         

|                                                                                                                          |  | Note |  |  | 2010    |   |  | 2009    |   |  | 2008     |  
|------------------------------------------------------------------------------------------------------------------------- |  | ---- |  |  | ------- | - |  | ------- | - |  | -------- | -
|                                                                                                                          |  |      |  |  | **$**   |   |  | **$**   |   |  | **$**    |  
|                                                                                                                          |  |      |  |  |         |   |  |         |   |  |          |  
|Earnings (loss) for the year                                                                                              |  |      |  |  | 346,239 |   |  | (13,193 | ) |  | (5,946   | )
|Other comprehensive income (loss)                                                                                         |  |      |  |  |         |   |  |         |   |  |          |  
|Unrealized
      gain (loss) on marketable securities, net of tax                                                         |  | 6b   |  |  | 14,790  |   |  | 7,367   |   |  | (14,785  | )
|Realized gain on sale of
      marketable securities 
                 
      recycled to net earnings (loss), net of tax |  | 6b   |  |  | (2,645  | ) |  | (1,513  | ) |  | (1,734   | )
|Foreign exchange
      gain on marketable securities                                                                      |  |      |  |  | 1,117   |   |  | 1,968   |   |  | -        |  
|Translation adjustment on
      foreign operations                                                                        |  |      |  |  | -       |   |  | -       |   |  | (97,587  | )
|Other comprehensive income (loss) for the
      year                                                                      |  |      |  |  | 13,262  |   |  | 7,822   |   |  | (114,106 | )
|Comprehensive income (loss) for the year                                                                                  |  |      |  |  | 359,501 |   |  | (5,371  | ) |  | (120,052 | )

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

F-8

---

|Silver Standard Resources Inc.                            
|----------------------------------------------------------
|Consolidated Statements of Shareholders Equity           
|For the years
      ended December 31, 2010, 2009 and 2008
|(expressed in thousands of United States dollars)         

|                                          |  | Common Shares |  |  | Values  |   |  | Values   |   |  |             |  |  | Accumulated |  |  |               |   |  |           |   |  |           |   |  |                 | 
|----------------------------------------- |  | ------------- |  |  | ------- | - |  | -------- | - |  | ----------- |  |  | ----------- |  |  | ------------- | - |  | --------- | - |  | --------- | - |  | --------------- | 
|                                          |  |               |  |  |         |   |  | assigned |   |  | assigned to |  |  |             |  |  | other         |   |  | Retained  |   |  |           |   |  |                 | 
|                                          |  | Number of     |  |  |         |   |  | to stock |   |  | convertible |  |  | Contributed |  |  | comprehensive |   |  | earnings  |   |  |           |   |  | Non-controlling | 
|                                          |  | shares        |  |  | Amount  |   |  | options  |   |  | notes       |  |  | Surplus     |  |  | income (loss) |   |  | (deficit) |   |  | Total     |   |  | interest        | 
|                                          |  | (thousands)   |  |  | $       |   |  | $        |   |  | $           |  |  | $           |  |  | $             |   |  | $         |   |  | $         |   |  | $               | 
|                                          |  |               |  |  |         |   |  |          |   |  |             |  |  |             |  |  |               |   |  |           |   |  |           |   |  |                 | 
|                                          |  |               |  |  |         |   |  |          |   |  |             |  |  |             |  |  |               |   |  |           |   |  |           |   |  |                 | 
|Balance, December 31, 2007                |  | 62,569        |  |  | 386,597 |   |  | 27,706   |   |  | -           |  |  | 510         |  |  | 94,537        |   |  | (49,434   | ) |  | 459,916   |   |  | 496             | 
|                                          |  |               |  |  |         |   |  |          |   |  |             |  |  |             |  |  |               |   |  |           |   |  |           |   |  |                 | 
|Issued for cash:                          |  |               |  |  |         |   |  |          |   |  |             |  |  |             |  |  |               |   |  |           |   |  |           |   |  |                 | 
|Exercise of options                       |  | 186           |  |  | 2,192   |   |  | -        |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 2,192     |   |  | -               | 
|Stock based compensation
      expense    |  | -             |  |  | -       |   |  | 9,662    |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 9,662     |   |  | -               | 
|Value of options exercised                |  | -             |  |  | 866     |   |  | (866     | ) |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | -         |   |  | -               | 
|Value assigned to convertible
      notes |  | -             |  |  | -       |   |  | -        |   |  | 37,383      |  |  | -           |  |  | -             |   |  | -         |   |  | 37,383    |   |  | -               | 
|Other comprehensive loss                  |  | -             |  |  | -       |   |  | -        |   |  | -           |  |  | -           |  |  | (114,106      | ) |  | -         |   |  | (114,106  | ) |  | -               | 
|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   |   |  | 496             | 
|                                          |  |               |  |  |         |   |  |          |   |  |             |  |  |             |  |  |               |   |  |           |   |  |           |   |  |                 | 
|Issued for cash:                          |  |               |  |  |         |   |  |          |   |  |             |  |  |             |  |  |               |   |  |           |   |  |           |   |  |                 | 
|Public offering                           |  | 8,824         |  |  | 150,000 |   |  | -        |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 150,000   |   |  | -               | 
|Share issue costs                         |  | -             |  |  | (9,165  | ) |  | -        |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | (9,165    | ) |  | -               | 
|Exercise of options                       |  | 386           |  |  | 5,578   |   |  | -        |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 5,578     |   |  | -               | 
|Stock based compensation
      expense    |  | -             |  |  | -       |   |  | 6,547    |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 6,547     |   |  | -               | 
|Value of options exercised                |  | -             |  |  | 2,632   |   |  | (2,632   | ) |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | -         |   |  | -               | 
|Other comprehensive income                |  | -             |  |  | -       |   |  | -        |   |  | -           |  |  | -           |  |  | 7,822         |   |  | -         |   |  | 7,822     |   |  | -               | 
|Loss for the year                         |  | -             |  |  | -       |   |  | -        |   |  | -           |  |  | -           |  |  | -             |   |  | (13,193   | ) |  | (13,193   | ) |  | -               | 
|                                          |  |               |  |  |         |   |  |          |   |  |             |  |  |             |  |  |               |   |  |           |   |  |           |   |  |                 | 
|Balance, December 31, 2009                |  | 71,965        |  |  | 538,700 |   |  | 40,417   |   |  | 37,383      |  |  | 510         |  |  | (11,747       | ) |  | (68,573   | ) |  | 536,690   |   |  | 496             | 
|                                          |  |               |  |  |         |   |  |          |   |  |             |  |  |             |  |  |               |   |  |           |   |  |           |   |  |                 | 
|Issued for cash:                          |  |               |  |  |         |   |  |          |   |  |             |  |  |             |  |  |               |   |  |           |   |  |           |   |  |                 | 
|Public offering                           |  | 6,729         |  |  | 114,389 |   |  | -        |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 114,389   |   |  | -               | 
|Share issue costs                         |  | -             |  |  | (4,821  | ) |  | -        |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | (4,821    | ) |  | -               | 
|Exercise of options                       |  | 971           |  |  | 16,318  |   |  | -        |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 16,318    |   |  | -               | 
|Stock based compensation expense          |  | -             |  |  | -       |   |  | 9,199    |   |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | 9,199     |   |  | -               | 
|Value of options exercised                |  | -             |  |  | 6,956   |   |  | (6,956   | ) |  | -           |  |  | -           |  |  | -             |   |  | -         |   |  | -         |   |  | -               | 
|Other comprehensive income                |  | -             |  |  | -       |   |  | -        |   |  | -           |  |  | -           |  |  | 13,262        |   |  | -         |   |  | 13,262    |   |  | -               | 
|Earnings for the year                     |  | -             |  |  | -       |   |  | -        |   |  | -           |  |  | -           |  |  | -             |   |  | 346,239   |   |  | 346,239   |   |  | -               | 
|Balance, December 31, 2010                |  | 79,665        |  |  | 671,542 |   |  | 42,660   |   |  | 37,383      |  |  | 510         |  |  | 1,515         |   |  | 277,666   |   |  | 1,031,276 |   |  | 496             | 

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

F-9

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|1 | NATURE OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  | We are a mining company that has assembled a portfolio of
      silver-dominant projects since 1994. These projects are located
      predominantly in the Americas. Prior to December 1, 2009, we were a
      development stage company. With the Pirquitas Project entering production
      December 2009, we are now focused on operating and producing silver from
      our Pirquitas Mine, and on advancing our other principal projects and
      project pipeline. These include the San Luis, Pitarrilla, San Agustin and
      Diablillos projects. In addition to our principal projects, we hold a
      geologically-diverse portfolio of other predominantly silver projects in
      various stages of exploration. Certain of our projects also contain
      significant gold resources.
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  | 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 of those properties, our ability to
      dispose of them on an advantageous basis, and upon future profitable
      production. The amounts shown as mineral properties 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 21.                                                                                                                                                                                                                                                                                                                   
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  | 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
      70%
      San Luis(1)Minera Silver Standard Chile S.A.
      Chile
      100%
      ChallacolloPacific Rim Mining
        Corporation Argentina, S.A.
      Argentina
      100%
      DiablillosSilver Standard Australia Pty Limited
      Australia
      100%
      BowdensSilver Standard Durango S.A.
        de C.V.
      Mexico
      100%
      PitarrillaSilver Standard Mexico S.A de C.V
      Mexico
      100%
      San Marcial, Nazas andothersSilver Standard Exploraciones S.A. de C.V.
      Mexico
      100%
      Veta Colorada and others


(1)See also note 20
  subsequent events

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

F-10

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(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 Canadian 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 accounts receivable,
      inventories, convertible debenture receivable, accrued liabilities,
      convertible notes, depreciation, the assessment of 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  | Effective January 1, 2009, we determined that our
      functional currency had changed from the Canadian dollar to the U.S.
      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 have been translated to
      U.S. 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).
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  | Our financial instruments are comprised of cash and cash
      equivalents, marketable securities, accounts receivable, restricted cash,
      convertible debenture receivable, accounts payable, accrued liabilities,
      and convertible notes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  | Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  | Cash and cash equivalents include cash, bank balances and
      short-term investments with original maturities of 90 days or less. Cash
      equivalents are composed of short-term investments held with provinces of
      Canada, and federally with Canada or the United States of America or their
      respective agencies. Cash and cash equivalents are designated as loans and
      receivables.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  | Accounts receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  | Accounts receivable are designated as loans and
      receivables and are stated at carrying values, which approximate fair
      values due to their short-term maturity or capacity of prompt
      liquidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

F-11

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|2 | SIGNIFICANT ACCOUNTING POLICIES (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  | Marketable securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  | Marketable securities are reported at their fair market
      value based on quoted market prices. Marketable securities are designated
      as available-for-sale financial instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  | Restricted cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  | Restricted cash is designated as
      available-for-sale.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  | Convertible debenture receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  | Convertible debenture receivable consists of a note
      receivable component and a conversion feature component. The note
      receivable component is designated within 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.                                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  | Accounts payable and accrued liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  | Accounts payable and accrued liabilities are designated
      as other liabilities and are stated at carrying values, which approximate
      fair value due to their short-term maturity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  | Convertible notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  | The fair value of the convertible notes was initially
      allocated between debt and equity (note 11). The debt component of the
      convertible notes is designated as an other liability and related
      transaction costs on the debt component were expensed as incurred.
      Interest expense related to development expenditures incurred on the
      Pirquitas Project was capitalized to construction in progress until the
      commencement of production in December 2009.                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  | Inventories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  | Stockpiled ore and finished goods inventories are valued
      at the lower of cost and estimated net realizable value (NRV). Cost
      includes all direct costs incurred in production including direct labour
      and materials, freight, depreciation and amortization and directly
      attributable overhead costs. Production stripping costs are included in
      inventories as incurred. NRV is calculated as the estimated price at the
      time of sale based on prevailing and future metal prices less estimated
      future production costs to convert the inventories into saleable form and
      the estimated costs to sell.
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  | Any write-downs of inventory to NRV are recorded as cost
      of sales in the Statement of Earnings (Loss). If there is a subsequent
      increase in the value of inventories, the previous write-downs to NRV are
      reversed to the extent that the related inventory has not been
      sold.                                                                                                                                                                                                                                                                                                                                                    
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  | Stockpiled ore inventory represents ore that has been
      extracted from the mine and is available for further processing and
      includes fine ore stockpile, after crushing. Costs added to stockpiled ore
      inventory are valued based on current mining cost per tonne incurred up to
      the point of stockpiling the ore and are removed at the average cost per
      tonne. Stockpiled ore tonnages are verified by periodic
      surveys.                                                                                                                                                                                             

F-12

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|2 | SIGNIFICANT ACCOUNTING POLICIES (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  | Finished goods inventory includes concentrates at our
      Pirquitas mine and in transit inventory.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  | Materials and supplies inventories are valued at the
      lower of average cost and NRV. Costs include acquisition, freight and
      other directly attributable costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  | Mineral property costs and property, plant and
      equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  | Mineral property costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  | We record our interests in mineral properties at cost.
      Where applicable, cost includes acquisition costs, exploration and
      development expenditures, interest expense and finance costs allocable to
      the cost of mine development and construction, and holding costs to
      maintain a property. 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. Development costs
      incurred after the commencement of commercial production are capitalised
      to the extent they are expected to give rise to future economic benefits.
      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. Option 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.                                                                                                                                                                                                                                                                                                                                                                                                               

F-13

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|2 | SIGNIFICANT ACCOUNTING POLICIES (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  | 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, ranging from two to fourteen
      years, once the asset is put in service. Construction in progress is
      recorded at cost and transferred to building, mining equipment and
      machinery when the related asset 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.                                                                                                                                                                                                                                                   
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  | Where an item of property, plant and equipment comprises
      major components with different useful lives, the components are accounted
      for as separate items of property, plant and equipment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  | 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 the long-lived assets
      carrying value exceeds its fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  | Revenue recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  | Revenue is recognized upon delivery when title and risk
      of ownership of metal bearing concentrate passes to the buyer and when
      collection is reasonably assured. This occurs when title and insurance
      risk have passed to the customer and the goods have been delivered to a
      contractually agreed location.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  | Concentrate sales are provisionally priced, such that the
      price is not settled until a predetermined future date, typically one
      month after delivery to the customer, based on the market price at that
      time. The contract provides for a provisional payment based upon
      provisional assays and quoted metal prices. Revenues are initially
      recorded under these contracts at the time title passes to the buyer based
      on the prevailing market price at the date of the provisional invoice,
      with final settlement generally from one to three months after delivery.
      As a result, the value of our concentrate receivables changes as the
      underlying commodity market prices vary. This component of the contract is
      an embedded derivative, which is recorded at fair value with changes in
      fair value recorded in revenues. Adjustments to revenue for metal prices
      are recorded at each reporting date and other adjustments related to the
      final settlement of weights and assays are recorded on final settlement.
      Revenue from the sale of metal concentrate is recorded net of charges for
      treatment, refining and smelting.
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  | Revenues from the sale of material by-products are
      included within revenue. Where a by-product is not regarded as
      significant, sales proceeds may be credited against cost of
      sales.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  | Stripping costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  | Stripping costs comprise the removal of overburden and
      other waste material from the mine. Stripping costs incurred during the
      development of a mine are capitalized and depleted on a unit-of production
      basis, using estimated total proven and probable reserves as the depletion
      base.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-14

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|2 | SIGNIFICANT ACCOUNTING POLICIES (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  | Stripping costs incurred during the production phase are
      variable production costs that are included in the costs of production
      during the period that the stripping costs are incurred. Stripping costs
      resulting in a future benefit to the mineral property by providing access
      to additional ore reserves are capitalized and amortized over the relevant
      mineral reserves.                                                                                                                                                                                                                                                                                                                                                                         
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  | 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. 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 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.                                              
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  | Units issued under the Deferred Share Unit plan (DSU
      plan) are initially recorded at fair value and classified as accrued
      liabilities and subsequently remeasured at each reporting date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

Income taxes

The liability method of income tax allocation is used and
  is based on differences between the accounting 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 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.

Borrowing costs

Borrowing costs directly attributable
  to the acquisition or construction of qualifying assets are capitalized as part
  of the cost of the asset until the asset is substantially ready for its intended
  use. Other borrowing costs are recognized as an expense in the period
  incurred.

F-15

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|2 | SIGNIFICANT ACCOUNTING POLICIES (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  | Earnings (loss) per 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 assuming the proceeds are used to repurchase common
      shares at the average market price during the period, if
      dilutive.                                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|3 | CHANGES IN ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  | Business combinations and related
      sections                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  | Effective January 1, 2010, we elected to adopt Chartered
      Accountants Handbook (CICA) Handbook Sections 1582, Business
      Combinations, 1601, Consolidated Financial Statements, and 1602 Non-
      Controlling Interests on a prospective basis. The adoption of these
      standards required us to record our investment in Pretium initially at
      fair value, and present non-controlling interest within shareholders
      equity on the balance sheet.                                                                                                                                                                                                             
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  | Amendments to Canadian Institute of Chartered Accountants
      Handbook (CICA) Handbook Section 3855, Financial Instruments 
      Recognition and Measurement, related to clarification on the recognition
      of prepayment options embedded in a debt instrument and on the calculation
      of interest on a financial asset after recognition of an impairment loss
      are effective January 1, 2011 on a prospective basis, with early adoption
      permitted. We have elected to adopt this standard on a prospective basis
      effective January 1, 2010. The adoption of these amendments did not have a
      material impact on our consolidated financial statements.
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|4 | SILVER BULLION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  | In March 2008, we sold our silver bullion for cash
      proceeds of $39,648,000, which resulted in a gain of $23,699,000 during
      the year ended December 31, 2008. No tax expense was recorded as we had
      sufficient tax pools to offset the taxable gain on the
      sale.                                                                                                                                                                                                                                                                                                                                                                                                          

F-16

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|5 | INVENTORIES
|- | -----------

2010
      
      
      2009**$**
      
      
      **$**Finished goods
      
      6,919
      
      
      6,141Stockpiled ore
      
      26,327
      
      
      9,310Materials and supplies
      
      6,930
      
      
      5,11440,176
      
      
      20,565


During the year ended December 31,
  2010, we recorded net inventory write-downs totalling $6,700,000 (2009 -
  $1,022,000; 2008 - $nil) resulting from inventory cost exceeding NRV of
  inventory.

|6 | FINANCIAL INSTRUMENTS
|- | ---------------------

As at December 31, 2010, the carrying
  and fair values of our financial instruments by category are as follows:

| |                                                    |  | 2010     | 
| | -------------------------------------------------- |  | -------- | 
| |                                                    |  | Held for | 
| |                                                    |  | trading  | 
| | Financial assets                                   |  | **$**    | 
| | Cash and cash equivalents                          |  | -        | 
| | Marketable securities (note 6b)                    |  | -        | 
| | Accounts receivable                                |  | 15,409   | 
| | Restricted cash (note 12)                          |  | -        | 
| | Convertible debenture (note 6c) (1)                |  | 386      | 
| |                                                    |  | 15,795   | 
| | Financial liabilities                              |  |          | 
| | Accounts payable and and accrued
      liabilities |  | -        | 
| | Convertible notes (note 11) (2)                    |  | -        | 
| |                                                    |  | -        | 

| | (1) | The fair value of our convertible debenture receivable is
      estimated using the discounted cash flow method at market rates on the
      balance sheet date. The fair value of the conversion feature is estimated
      using an option pricing model.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | The fair value of our convertible notes is estimated
      using average market quoted prices provided by market makers in the
      over-the-countermarket on the balance sheet date.                                                                     

F-17

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|6 | FINANCIAL INSTRUMENTS (Contd)
|- | ------------------------------
|  |                               
|  | (a)                           
|  |                               
|  |                               

| |                                                   |  |        |  |  | Fair Value at December 31, 2010 | 
| | ------------------------------------------------- |  | ------ |  |  | ------------------------------- | 
| |                                                   |  | Total  |  |  | Level 1                         | 
| |                                                   |  | **$**  |  |  | **$**                           | 
| | Assets:                                           |  |        |  |  |                                 | 
| | Marketable securities                             |  | 33,465 |  |  | 33,465                          | 
| | Trade receivables from
      provisional invoices |  | 15,409 |  |  | -                               | 
| | Restricted cash                                   |  | 2,071  |  |  | 2,071                           | 
| | Embedded conversion option                        |  | 386    |  |  | -                               | 
| |                                                   |  | 51,331 |  |  | 35,536                          | 

The three levels of the fair value
  hierarchy established by Section 3862 are as follows:

| | Level 1: | Unadjusted quoted prices in active markets that are
      accessible at the measurement date for identical assets or liabilities.                                                                                                                                                                                                                                                                                                                                             
| | -------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |          | Restricted cash is valued using quoted market prices.
      Marketable securities, consisting of available-forsale investments with
      no trading restrictions, are valued using a market approach based upon
      unadjusted quoted prices for identical assets in an active market obtained
      from securities exchanges. As a result, these financial assets have been
      included in Level 1 of the fair value hierarchy.                                      
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Level 2: | Inputs other than quoted prices included in Level 1 that
      are observable for the asset or liability, either directly or indirectly,
      for substantially the full contractual term.                                                                                                                                                                                                                                                                                   
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |          | Trade receivables from provisional invoices for
      concentrate sales are included within Level 2, as they are valued using
      commodity quoted market prices as a basis for the valuation.                                                                                                                                                                                                                                                                              
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |          | The embedded conversion option within the convertible
      debenture is included in Level 2 of the fair value hierarchy as it is
      valued using an option pricing model. This model requires a variety of
      inputs, including, but not limited to, contractual terms, market prices,
      forward price curves, yield curves and credit spreads.                                                                                                                    
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | Level 3: | Inputs for the asset or liability are not based on
      observable market data. We include our investments in asset-backed
      commercial paper as Level 3 in the fair value hierarchy because they trade
      infrequently. We review these instruments periodically and estimate an
      impairment charge based on managements best estimates, which are
      unobservable inputs. As at December 31, 2010 and 2009, the fair value was
      considered to be $nil.

F-18

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|6 | FINANCIAL INSTRUMENTS (Contd)
|- | ------------------------------
|  |                               
|  | (b)                           
|  |                               
|  |                               

| | Available for sale                                                                                                                                      |  | Mark-to-market gain (loss) in OCI |  
| | ------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------- | -
| |                                                                                                                                                         |  | 2010                              |  
| |                                                                                                                                                         |  | **$**                             |  
| | Unrealized gain (loss) on marketable
      securities                                                                                                   |  | 17,142                            |  
| | Future tax expense (recovery) in OCI                                                                                                                    |  | (2,352                            | )
| |                                                                                                                                                         |  | 14,790                            |  
| | Realized gains recycled to net loss, net of tax 
           $469 (2009 - $311; 2008 - $356)                                                             |  | (2,645                            | )
| | Reclassification adjustment for unrealized
      impairment losses included 
           in net loss, net
      of tax - $nil (2009 - $nil; 2008 - $466) |  | -                                 |  
| |                                                                                                                                                         |  | 12,145                            |  

| | Held for trading      |  |       |  |  | Mark-to-market loss in net loss | 
| | --------------------- |  | ----- |  |  | ------------------------------- | 
| |                       |  | 2010  |  |  | 2009                            | 
| |                       |  | **$** |  |  | **$**                           | 
| | Loss on warrants held |  | -     |  |  | -                               | 

| |     | Our warrants designated as held-for-trading expired in
      February 2009. At December 31, 2008, the warrants had a fair value of
      $nil, resulting in a mark-to-market loss of $27,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (c) | Convertible debenture receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | In July 2008, we received a C$10 million convertible
      debenture from Aurcana Corporation (Aurcana) as part of the
      consideration we received for the sale of the Shafter Silver Project. In
      July 2009, Aurcana negotiated a revision to the coupon rate on the
      debenture from 3% per year to 1.5% in the first year and 4% per year
      thereafter. We received our first coupon payment of $134,000 on July 15,
      2009. As a result of this restructuring, we recorded a write-down of
      $2,002,000 during the year ended December 31, 2009, including $118,000 of
      accrued interest and $1,884,000 on our convertible debenture
      receivable.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | At December 31, 2010, the carrying value of the debenture
      was $7,180,000 (2009 - $6,081,000). Of this amount, $6,794,000 (2009 -
      $5,606,000) represents the carrying value of the note receivable component
      estimated using a discounted cash flow model method and $386,000 (2009 -
      $475,000) represents the fair value of the conversion feature.                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | For the year ended December 31, 2010, interest and
      accretion income of $1,253,000 (2009 - $999,000; 2008 - $493,000) was
      recorded in earnings in relation to the note receivable component and an
      unrealized loss of $102,000 (2009 - unrealized gain of $412,000; 2008 
      unrealized loss of $1,389,000) was recorded in relation to adjusting the
      fair value of the conversion feature (note 18).                                                                                                                                                                                                                                                          

F-19

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|6 | FINANCIAL INSTRUMENTS (Contd)
|- | ------------------------------
|  |                               
|  | (d)                           
|  |                               
|  |                               
|  |                               
|  |                               
|  |                               
|  |                               
|  |                               
|  |                               
|  |                               
|  |                               
|  |                               
|  |                               
|  |                               
|  |                               
|  |                               
|  |                               

F-20

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|6 | FINANCIAL INSTRUMENTS (Contd)
|- | ------------------------------

Our maximum exposure to credit risk at
  December 31, 2010 is as follows:

| |                                  |  | 2010    |  |  | 2009   | 
| | -------------------------------- |  | ------- |  |  | ------ | 
| |                                  |  | **$**   |  |  | **$**  | 
| | Cash and cash equivalents        |  | 232,311 |  |  | 26,659 | 
| | Accounts receivable              |  | 30,323  |  |  | 6,238  | 
| | Convertible debenture receivable |  | 6,794   |  |  | 5,606  | 
| | Value added tax recoverable      |  | 70,782  |  |  | 54,095 | 
| |                                  |  | 340,210 |  |  | 92,598 | 

Liquidity Risk

Liquidity risk is the risk that we
  will encounter difficulty in meeting obligations associated with financial
  liabilities. We have in place a planning and budgeting process to assist in
  determining the funds required to support our normal operating requirements on
  an ongoing basis as well as our expansion plans. We manage liquidity risk by
  ensuring sufficient resources are available to meet short-term business
  requirements, taking into account our anticipated cash flows from operations and
  our cash and cash equivalent balances.

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. If necessary, we
  may raise funds through the issuance of debt, equity, or monetization of
  non-core assets. We believe our sources will be sufficient to cover our
  short-term and long-term cash requirements.

We enter into contracts that give rise
  to commitments for future minimum payments in the normal course of business. The
  following table summarizes the remaining undiscounted contractual maturities of
  our financial liabilities and operating and capital commitments at December 31,
  2010:

| |                                          |  | Less than |  |  | 1 to 3  |  |  | 4 to 5 |  |  | Over 5 |  |  |         | 
| | ---------------------------------------- |  | --------- |  |  | ------- |  |  | ------ |  |  | ------ |  |  | ------- | 
| |                                          |  | 1 year    |  |  | years   |  |  | years  |  |  | years  |  |  | Total   | 
| |                                          |  | $         |  |  | $       |  |  | $      |  |  | $      |  |  | $       | 
| |                                          |  |           |  |  |         |  |  |        |  |  |        |  |  |         | 
| | Accounts payable and accrued liabilities |  | 32,132    |  |  | -       |  |  | -      |  |  | -      |  |  | 32,132  | 
| | Asset retirement obligations             |  | 952       |  |  | 2,595   |  |  | 1,674  |  |  | 21,421 |  |  | 26,642  | 
| | Long-term convertible note repayments i) |  | -         |  |  | 138,000 |  |  | -      |  |  | -      |  |  | 138,000 | 
| | Interest on convertible notes i)         |  | 6,210     |  |  | 15,525  |  |  | -      |  |  | -      |  |  | 21,735  | 
| | Capital expenditure commitments ii)      |  | 874       |  |  | 210     |  |  | -      |  |  | -      |  |  | 1,084   | 
| | Operating expenditure commitments        |  | 8,332     |  |  | 8,854   |  |  | -      |  |  | -      |  |  | 17,186  | 
| | Minimum rental and lease payments        |  | 520       |  |  | 678     |  |  | -      |  |  | -      |  |  | 1,198   | 
| |                                          |  | 49,020    |  |  | 165,862 |  |  | 1,674  |  |  | 21,421 |  |  | 237,977 | 

| | i)  | Convertible notes are due in 2028 but are 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.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ii) | Subsequent to year end we have entered into a capital
      expenditure commitment for $11.4 million which is expected to be paid
      during 2011.                                                                                 

F-21

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|6 | FINANCIAL INSTRUMENTS (Contd)
|- | ------------------------------

Market Risk

| | i) | Foreign Exchange Risk
| | -- | ---------------------

We operate projects in seven different
  countries and therefore, foreign exchange risk exposures arise from transactions
  denominated in currencies other than our functional currency. Our foreign
  exchange risk arises primarily with respect to the Canadian dollar and Argentine
  peso.

As at December 31, our exposure to
  foreign exchange risk in currencies other than the U.S. dollar is as
  follows:

| |                   |  | December 31, 2010 | 
| | ----------------- |  | ----------------- | 
| |                   |  | Cash and cash     | 
| |                   |  | equivalents and   | 
| |                   |  | restricted cash   | 
| |                   |  | **$**             | 
| | Argentinean peso  |  | 9,588             | 
| | Australian dollar |  | 151               | 
| | Canadian dollar   |  | 164,557           | 
| | Mexican peso      |  | 487               | 
| | Peruvian soles    |  | 278               | 
| |                   |  | 175,061           | 

During the year, we recognized a
  foreign exchange gain of $1,239,000 (2009  $4,993,000; 2008 $200,000). Based
  on the above net exposures at December 31, 2010, a 10% depreciation or
  appreciation in all of the above currencies against the U.S. dollar would result
  in a decrease or increase, respectively, in our net earnings by $23,313,000.

| | ii) | Interest Rate Risk
| | --- | ------------------

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

As at December 31, 2010, the weighted
  average interest rate of our cash equivalents investment was 0.89% (2009 -
  0.08%) . With other variables unchanged, a 1% increase (decrease) in the
  interest rate would increase (decrease) our net earnings by $613,000 (2009 -
  $643,000).

F-22

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|6 | FINANCIAL INSTRUMENTS (Contd)
|- | ------------------------------

| | iii) | Commodity Price Risk
| | ---- | --------------------

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

|7 | OTHER INVESTMENTS
|- | -----------------

As at December 31, 2008, we had a total
  of $46,629,000 (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, the highest credit rating for
  commercial paper. In August 2007, the ABCP market experienced liquidity problems
  and was subsequently frozen.

At December 31, 2008 we estimated the
  fair values of our ABCP investments using a valuation technique which
  incorporated a probability weighted approach applied to discounted future cash
  flows, which resulted in a write-down to fair value of $21,803,000. We recorded
  an impairment of $17,903,000 in 2008.

On January 28, 2009, we received
  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. During the year ended December 31, 2009, we received additional
  retroactive interest payments totalling $624,000 covering the period from
  September 2008 to January 2009 and $393,000 in interest payments on the
  restructured notes.

In November 2009, we sold our Class A-1
  and A-2 ABCP notes for net proceeds of $20,107,000 (C$21,215,000) resulting in a
  loss on sale of $3,103,000. The carrying value of our remaining ABCP investment
  of $2,113,000 was written off during that year.

F-23

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|8 | 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. We commenced production at our Pirquitas
      property on December 1, 2009 and as a result, we have applied to the
      Argentinean government to begin to recover the VAT. The amount recoverable
      at December 31, 2010 is estimated to be $71,442,000 (2009 - $54,095,000)
      of which $667,000 is expected to be recovered within one year (2009 -
      $nil).
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  | 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.                                                                                                                                                                                                                                            
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|9 | INVESTMENT ACCOUNTED FOR UNDER THE EQUITY
      METHOD                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

| | Pretium Resources Inc. |  |                   | 
| | ---------------------- |  | ----------------- | 
| |                        |  |                   | 
| |                        |  | December 31, 2010 | 
| |                        |  | **$**             | 
| | Common shares          |  | 187,202           | 
| | Promissory note        |  | 39,069            | 
| |                        |  | 226,271           | 

On December 21, 2010 we completed the
  sale of our Snowfield and Brucejack projects to Pretium Resources Inc.
  (Pretium), in exchange for cash and common shares of Pretium, which
  represented a 41.27% ownership interest in Pretium as at December 31, 2010 (note
  10b (i)). The Companys interest in Pretium has been accounted for using the
  equity method.

As part of the sale proceeds we also
  received a promissory note. As at December 31, 2010 this promissory note has
  been included in the carrying value of the investment in Pretium as this most
  accurately reflects the substance of the instrument. The note is convertible
  into common shares of Pretium to the extent unpaid 40 days after closing and
  bears no interest (note 10b (i)).

These exploration stage properties have
  no current operations. The carrying amount represents the fair value of our
  investment in Pretium at initial recognition, adjusted for subsequent earnings
  or losses of Pretium from the date of ownership.

Share of loss of equity investee for
  the period from December 21, 2010 to December 31, 2010 was $4,669,000; of which
  $4,592,000 represents our share of stock based compensation charged by Pretium
  following the conversion of a preferred share with a carrying value of
  $1,500,000 into 2.5% of the issued and outstanding common shares of Pretium on a
  fully diluted basis at the date of the transaction. This expense was contingent
  upon the closing of the acquisition and has therefore been included as a
  transaction cost and reduces the gain on disposal of mineral properties in the
  consolidated statement of earnings (loss). The balance of $77,000 is presented
  as share of loss of equity investee.

F-24

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|10 | MINERAL PROPERTIES AND PROPERTY, PLANT AND
      EQUIPMENT
|-- | ----------------------------------------------------------

| |                                                |  |         |  |  | December 31, 2010 |   |  |         |  |  | December 31, 2009 | 
| | ---------------------------------------------- |  | ------- |  |  | ----------------- | - |  | ------- |  |  | ----------------- | 
| |                                                |  |         |  |  | Accum. Net Book   |   |  |         |  |  | Accum. Net Book   | 
| |                                                |  | Cost    |  |  | Amort.            |   |  | Value   |  |  | Cost              | 
| |                                                |  | **$**   |  |  | **$**             |   |  | **$**   |  |  | **$**             | 
| |                                                |  |         |  |  |                   |   |  |         |  |  |                   | 
| | Mineral properties                             |  |         |  |  |                   |   |  |         |  |  |                   | 
| | Depletable producing properties                |  | 179,774 |  |  | (8,212            | ) |  | 171,562 |  |  | 180,636           | 
| | Non-depletable exploration
      properties    |  | 205,557 |  |  | -                 |   |  | 205,557 |  |  | 191,047           | 
| |                                                |  | 385,331 |  |  | (8,212            | ) |  | 377,119 |  |  | 371,683           | 
| | Construction in progress                       |  |         |  |  |                   |   |  |         |  |  |                   | 
| | Pirquitas, Argentina                           |  | 8,695   |  |  | -                 |   |  | 8,695   |  |  | 8,015             | 
| |                                                |  |         |  |  |                   |   |  |         |  |  |                   | 
| | Property, plant and equipment                  |  |         |  |  |                   |   |  |         |  |  |                   | 
| | Building, mining equipment and
      machinery |  | 259,890 |  |  | (33,427           | ) |  | 226,463 |  |  | 247,214           | 
| | Other                                          |  | 3,405   |  |  | (2,023            | ) |  | 1,382   |  |  | 3,268             | 
| |                                                |  | 263,295 |  |  | (35,450           | ) |  | 227,845 |  |  | 250,482           | 
| |                                                |  |         |  |  |                   |   |  |         |  |  |                   | 
| |                                                |  | 657,321 |  |  | (43,662           | ) |  | 613,659 |  |  | 630,180           | 

The allocation of depreciation expense
  on property, plant and equipment was as follows:

| |                                                        |  | 2010   |  |  | 2009   |  |  | 2008  | 
| | ------------------------------------------------------ |  | ------ |  |  | ------ |  |  | ----- | 
| |                                                        |  | **$**  |  |  | **$**  |  |  | **$** | 
| | Consolidated Balance Sheets                            |  |        |  |  |        |  |  |       | 
| | Inventory                                              |  | 18,100 |  |  | 1,515  |  |  | -     | 
| | Mineral
      properties                               |  | 124    |  |  | 13,224 |  |  | 735   | 
| |                                                        |  | 18,224 |  |  | 14,739 |  |  | 735   | 
| |                                                        |  |        |  |  |        |  |  |       | 
| | Consolidated Statements of Earnings (Loss)             |  |        |  |  |        |  |  |       | 
| | General and
      administration                       |  | 282    |  |  | 229    |  |  | 288   | 
| |                                                        |  |        |  |  |        |  |  |       | 
| | Total property, plant and equipment
      depreciation |  | 18,506 |  |  | 14,968 |  |  | 1,023 | 

In addition, during the year we
  recorded $7,594,000 (2009 - $618,000; 2008 - $nil) of depletion on producing
  properties which was allocated to inventory.

F-25

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|10 | MINERAL PROPERTIES AND PROPERTY, PLANT AND
      EQUIPMENT (Contd)
|-- | -------------------------------------------------------------------

At December 31, mineral property costs
  are as follows:

| |                                   |  | December 31, 2010 |  |  | December 31, 2009 | 
| | --------------------------------- |  | ----------------- |  |  | ----------------- | 
| |                                   |  | Acquisition       |  |  | **Exploration**   | 
| |                                   |  | costs             |  |  | costs             | 
| | Exploration projects              |  | **$**             |  |  | **$**             | 
| |                                   |  |                   |  |  |                   | 
| | Diablillos, Argentina             |  | 4,516             |  |  | 14,250            | 
| | Bowdens, Australia                |  | 8,902             |  |  | 7,726             | 
| | Snowfield, Canada b(i)            |  | -                 |  |  | -                 | 
| | BruceJack, Canada b(i)            |  | -                 |  |  | -                 | 
| | Sunrise, Canada                   |  | 1,008             |  |  | 66                | 
| | Challacollo, Chile                |  | 2,659             |  |  | 5,101             | 
| | Pitarrilla, Mexico                |  | 17,745            |  |  | 60,090            | 
| | San Marcial, Mexico               |  | 633               |  |  | 464               | 
| | Veta Colorada, Mexico             |  | 3,688             |  |  | 1,155             | 
| | Nazas, Mexico                     |  | 504               |  |  | 919               | 
| | San Agustin, Mexico               |  | 10                |  |  | 1,644             | 
| | Berenguela, Peru                  |  | 10,618            |  |  | 5,862             | 
| | San Luis, Peru a                  |  | 559               |  |  | 26,121            | 
| | Candelaria, United States         |  | 2,434             |  |  | 3,588             | 
| | Maverick Springs, United States   |  | 565               |  |  | 2,063             | 
| | Other exploration projects        |  | 1,012             |  |  | 2,505             | 
| |                                   |  |                   |  |  |                   | 
| |                                   |  | 54,853            |  |  | 131,554           | 
| |                                   |  |                   |  |  |                   | 
| | Exploration project held for sale |  |                   |  |  |                   | 
| |                                   |  |                   |  |  |                   | 
| | Silvertip, Canada b(ii)           |  | -                 |  |  | -                 | 

| | a) | The non-controlling interest results from the
      consolidation of the Reliant Ventures S.A.C in 2007 for the San Luis
      property in Peru, after we took control of the project.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                       
| | b) | Disposition of mineral
      properties                                                                                                                                               

| | i) | On December 21, 2010 we completed the sale of our 100%
      interest in the Snowfield and Brucejack properties located in British
      Columbia, Canada, to Pretium. Pretium became a publically traded company
      on the Toronto Stock Exchange (TSX) following the closing of its initial
      public offering (IPO) on December 21, 2010. Under the terms of the
      transaction, we received a total of 32,537,833 common shares of Pretium,
      representing 41.27% of its issued and outstanding common shares with a
      fair value of $191,869,000 (C$195,227,000) based on the IPO price of
      C$6.00 per share. We also received cash proceeds of $211,322,000
      (C$215,020,000) before underwriters fees of $12,427,000 (C$12,645,000)
      and a non-interest bearing promissory note in the principal amount of
      $39,069,000 (C$39,753,000) which was to be automatically converted into
      common shares of Pretium at C$6.00 per share 40 days after closing to the
      extent not repaid by Pretium. Total consideration was $442,260,000
      (C$450,000,000).
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-26

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|10 | MINERAL PROPERTIES AND PROPERTY, PLANT AND
      EQUIPMENT (Contd)
|-- | -------------------------------------------------------------------

| |      | On January 6, 2011 the underwriters exercised in part the
      over-allotment option to them in connection with the IPO. Pursuant to the
      terms of the promissory note, we received $16,673,000 (C$16,965,000),
      after underwriters fees, from partial repayment of it. On January 31,
      2011 the balance of the promissory note was automatically converted into
      3,625,500 common shares of Pretium in accordance with its terms. Following
      this conversion our ownership interest in Pretium was 42.31%.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |      | In the year ended December 31, 2010 we recognised a gain
      on disposal of the mineral properties from this transaction of
      $388,761,000 net of selling costs of $5,922,000 (after tax gain
      $360,612,000). We are entitled to appoint two of Pretiums five board
      members and have the right to maintain our ownership interest. Our
      interest in Pretium has been accounted for using the equity method (note
      9).                                                                                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ii)  | In February 2010 we completed the sale of our 100%
      interest in the Silvertip property located in British Columbia, Canada to
      Silvercorp Metals Inc. (Silvercorp). Under the terms of the agreement,
      Silvercorp paid total consideration of $14,957,000, comprising cash of
      $7,125,000 and 1,200,000 common shares of Silvercorp with a fair value of
      $7,832,000, for an after tax gain of $13,073,000. This asset was
      classified as held for sale at December 31, 2009.                         
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | iii) | In June 2009, we sold our remaining 25% interest in the
      San Juan property located in Durango State, Mexico to Orko Silver Corp.
      (Orko). Under the terms of the agreement, Orko paid us total
      consideration of $202,000, consisting of 306,000 shares of Orko. The sale
      resulted in a gain of $167,000.                                                                                                                                                                                                      

| | c) | Write-down of mineral properties                                                                                                                                                                                                                                                               
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                
| |    | During the year ended December 31, 2009, we allowed our
      mineral rights for the La Bandera project ($58,000) in Mexico and Veca
      project ($319,000) in Peru to lapse. As a result, a $377,000 write-down of
      mineral property was recorded to loss for the year (note
      18).

|11 | LONG-TERM CONVERTIBLE NOTES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | In February 2008, we sold $138,000,000 in senior
      unsecured 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. A portion of 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. | during specified consecutive trading periods, if the
      market price of our common shares exceeds 130% of the conversion price of
      the Notes,                               
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | the trading price of the Notes falls to 97% or less of
      the amount equal to the then prevailing price of our common shares,
      multiplied by the applicable conversion rate,
| | c. | the Notes are called for redemption,                                                                                                                                                
| | d. | upon the occurrence of specified corporate transactions,
      or                                                                                                                   
| | e. | during specified periods in early 2013 and
      2028.                                                                                                                              

F-27

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|11 | LONG-TERM CONVERTIBLE NOTES (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | 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 principal amount will
      be repaid in cash and any excess value will be settled at the Companys
      election in either cash or shares or a combination of the two. Any portion
      of the Notes not settled in cash will be convertible into the Companys
      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 are denominated in U.S. Dollars. The face value of the
      Notes was allocated between debt and equity components at initial
      recognition for accounting purposes. The fair value of the debt portion of
      $99,144,000 was estimated using a discounted cash flow model method. The
      fair value of the equity component of $38,856,000 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 loss for the year ended December 31, 2008 and
      $1,473,000 was charged to equity.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | At December 31, 2010, the carrying value of accrued
      interest related to the Notes was $2,076,000 (2009 - $2,076,000) and the
      long-term portion was $118,203,000 (2009 - $110,739,000).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | During 2010, accretion expense and interest expense
      related to the convertible notes was $7,464,000 (2009 - $6,693,000) and
      $6,210,000 (2009 - $6,210,000) respectively. In aggregate, interest and
      accretion expense of $nil (2009  $11,808,000) was capitalized to
      construction in progress and $13,674,000 (2009 - $1,095,000) was
      recognized as expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|12 | ASSET RETIREMENT OBLIGATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | 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, Pitarrilla and Veta Colorada properties
      located in Mexico, San Luis in Peru and the Pirquitas property located in
      Argentina.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | During the year ended December 31, 2010, we expensed
      $1,669,000 (2009 - $366,000; 2008 - $318,000) in on-going, non-legally
      required environmental and reclamation costs, accretion of asset
      retirement obligations and changes in the provision for asset retirement
      obligations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

F-28

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|12 | ASSET RETIREMENT OBLIGATIONS (Contd)                                                                 
|-- | ------------------------------------------------------------------------------------------------------
|   |                                                                                                       
|   | A reconciliation of the provision for asset retirement
      obligations at December 31 is as follows:

| |                                        |  | 2010   |   |  | 2009   |  
| | -------------------------------------- |  | ------ | - |  | ------ | -
| |                                        |  | **$**  |   |  | **$**  |  
| |                                        |  |        |   |  |        |  
| | Balance, beginning of year             |  | 11,491 |   |  | 3,463  |  
| |                                        |  |        |   |  |        |  
| | Liabilities settled during the year    |  | (223   | ) |  | (23    | )
| | Accretion expense                      |  | 1,646  |   |  | 300    |  
| | Foreign exchange (loss) gain           |  | (84    | ) |  | 426    |  
| | Revisions and new estimated cash flows |  | 893    |   |  | 7,325  |  
| |                                        |  |        |   |  |        |  
| | Balance, end of year                   |  | 13,723 |   |  | 11,491 |  
| |                                        |  |        |   |  |        |  
| | Balance sheet presentation             |  |        |   |  |        |  
| | Current portion                        |  | 955    |   |  | 341    |  
| | Long-term portion                      |  | 12,768 |   |  | 11,150 |  
| |                                        |  |        |   |  |        |  
| | Balance, end of year                   |  | 13,723 |   |  | 11,491 |  

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

| |  | Present value of total asset retirement obligations
      is $13,723,000 (2009 - $11,491,000), reflecting expenditures over
      approximately the next 13 years
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Total undiscounted value of these payments is
      $26,642,000 (2009 - $24,366,000)                                                                             
| |  | Present value was determined using a credit
      adjusted risk-free rate of 9% - 12%                                                                            



|13 | SHAREHOLDERS EQUITY
|-- | --------------------

| | (a) | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | At December 31, 2010, we had unlimited authorized common
      shares and 79,665,041 common shares issued and outstanding (2009 
      71,964,708). During the year, we closed public share offerings of
      6,728,755 common shares at a price of $17.00 per share, for aggregate
      gross proceeds of $114,389,000. After deducting underwriting fees and
      offering expenses net of tax credits of $4,821,000, net proceeds were
      $109,568,000.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | During the year ended December 31, 2009, we closed public
      share offerings of 8,823,529 common shares at a price of $17.00 per share,
      for aggregate gross proceeds of $150,000,000. After deducting underwriting
      fees and offering expenses of $9,165,000, net proceeds were
      $140,835,000.                                                                                                                                                

F-29

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|13 | SHAREHOLDERS EQUITY (Contd)
|-- | -----------------------------

| | (b) | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | We have a stock option plan for our employees, officers
      and self-employed consultants. The plan provides for the issuance of
      incentive options to acquire up to a total of 10% of the issued and
      outstanding common shares of the company. The exercise price of each
      option shall not be less than the closing market price of the companys
      stock on the award date. The options can be granted for a maximum term of
      10 years with vesting provisions determined by the company. Currently, the
      vesting periods range up to three years. New shares from treasury are
      issued on the exercise of stock options.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | The changes in stock options issued are as
      follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

| |                                |  |            |   |  | 2010         |  |  |            |   |  | 2009        |  |  |           |   |  | 2008        | 
| | ------------------------------ |  | ---------- | - |  | ------------ |  |  | ---------- | - |  | ----------- |  |  | --------- | - |  | ----------- | 
| |                                |  | Number     |   |  | **Weighted** |  |  | Number     |   |  | Weighted    |  |  | Number    |   |  | Weighted    | 
| |                                |  | of options |   |  | average      |  |  | of options |   |  | average     |  |  | of shares |   |  | average     | 
| |                                |  |            |   |  | exercise     |  |  |            |   |  | exercise    |  |  |           |   |  | exercise    | 
| |                                |  |            |   |  | price        |  |  |            |   |  | price       |  |  |           |   |  | price       | 
| |                                |  |            |   |  | (C$/option)  |  |  |            |   |  | (C$/option) |  |  |           |   |  | (C$/option) | 
| |                                |  |            |   |  |              |  |  |            |   |  |             |  |  |           |   |  |             | 
| | Outstanding, beginning of year |  | 5,271,118  |   |  | 26.40        |  |  | 5,016,250  |   |  | 26.37       |  |  | 4,419,350 |   |  | 27.77       | 
| | Granted                        |  | 605,000    |   |  | 17.82        |  |  | 889,500    |   |  | 24.18       |  |  | 810,000   |   |  | 15.47       | 
| | Exercised                      |  | (971,578   | ) |  | 17.00        |  |  | (385,632   | ) |  | 15.63       |  |  | (186,100  | ) |  | 12.46       | 
| | Forfeited                      |  | (200,670   | ) |  | 27.72        |  |  | (249,000   | ) |  | 34.65       |  |  | (27,000   | ) |  | 24.31       | 
| | Outstanding, end of year       |  | 4,703,870  |   |  | 27.18        |  |  | 5,271,118  |   |  | 26.40       |  |  | 5,016,250 |   |  | 26.37       | 
| | Exercisable, end of year       |  | 3,324,175  |   |  | 30.31        |  |  | 3,881,933  |   |  | 28.41       |  |  | 2,962,250 |   |  | 29.03       | 

As of December 31, 2010, incentive
  stock options represent 5.9% (2009  7.3%) of issued and outstanding common
  capital. The aggregate intrinsic values of vested share options (the market
  value less the exercise value) at December 31, 2010 and 2009 were $20,242,000
  (C$20,104,000) and $11,859,000 (C$12,412,000), respectively.

The following table summarizes
  information about stock options outstanding and exercisable at December 31,
  2010:

Options outstanding
      
      
      Options exercisableWeighted
      
      
      Weighted average
      
      
      
      
      
      Weightedaverage
      
      
      remaining
      
      
      
      
      
      averageExercise prices
      
      Options
      
      
      **exercise
        price**
      
      
      contractual life
      
      
      Options
      
      
      **exercise
        price**(C$)
      
      outstanding
      
      
      (C$/option)
      
      
      (years)
      
      
      exercisable
      
      
      (C$/option)11.50  17.38
      
      997,403
      
      
      14.65
      
      
      8.8
      
      
      270,393
      
      
      11.5018.99  24.61
      
      1,436,967
      
      
      22.95
      
      
      6.4
      
      
      804,282
      
      
      22.3126.55  32.08
      
      290,000
      
      
      28.78
      
      
      2.5
      
      
      270,000
      
      
      28.9534.71  40.62
      
      1,979,500
      
      
      36.32
      
      
      1.3
      
      
      1,979,500
      
      
      36.324,703,870
      
      
      27.18
      
      
      4.4
      
      
      3,324,175
      
      
      30.31


F-30

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|13 | SHAREHOLDERS EQUITY (Contd)
|-- | -----------------------------

During the year ended December 31,
  2010, 605,000 (2009 - 889,500) options were granted to employees and consultants
  at a weighted average strike price of C$17.82 (2009 - C$24.18) . The average
  fair value of the options granted in 2010 and 2009 were $9.40 (C$9.35) and
  $12.04 (C$12.60), respectively, 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, 2010, the
  non-vested stock option expense not yet recognized was $8,939,000 (2009 -
  $12,374,000) and this expense is expected to be recognized over the next 3
  years.

The allocation of fair value of
  options was as follow:

| |                                                  |  | 2010  |  |  | 2009  |  |  | 2008  | 
| | ------------------------------------------------ |  | ----- |  |  | ----- |  |  | ----- | 
| |                                                  |  | **$** |  |  | **$** |  |  | **$** | 
| | Consolidated Balance Sheets                      |  |       |  |  |       |  |  |       | 
| | Mineral property costs                           |  | 331   |  |  | 228   |  |  | 61    | 
| | Consolidated Statements of Earnings
      (Loss) |  |       |  |  |       |  |  |       | 
| | Stock based compensation                         |  | 8,868 |  |  | 6,319 |  |  | 9,601 | 
| |                                                  |  |       |  |  |       |  |  |       | 
| | Total stock
      based compensation             |  | 9,199 |  |  | 6,547 |  |  | 9,662 | 

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

| |                                     |  | 2010 |  |  | 2009 |  |  | 2008 | 
| | ----------------------------------- |  | ---- |  |  | ---- |  |  | ---- | 
| |                                     |  |      |  |  |      |  |  |      | 
| | Expected dividend yield (%)         |  | Nil  |  |  | Nil  |  |  | Nil  | 
| | Average risk-free interest rate (%) |  | 2.9  |  |  | 2.7  |  |  | 3.1  | 
| | Expected life (years)               |  | 6.5  |  |  | 6.1  |  |  | 5.8  | 
| | Expected volatility (%)             |  | 53   |  |  | 57   |  |  | 56   | 

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) | Deferred Share Units                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | The Company has 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,
      2010, a total of 39,398 (2009  38,000) DSUs were granted with a grant
      date fair value of $772,000 (2009 - $681,000). During the year ended
      December 31, 2010, 8,741 (2009 - 1,000) DSUs, with a weighted average fair
      value of $18.18 were exercised after the resignation of one of our
      directors.

F-31

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|13 | SHAREHOLDERS EQUITY (Contd)
|-- | -----------------------------

As a result of the increase in our
  share price during the year, a fair value increase of $518,000 (2009 $140,000)
  was recorded to general and administration expense. As at December 31, 2010,
  90,361 (2009  59,704,) DSUs were outstanding with a fair value of $2,560,000
  (2009  $1,312,000) recorded in accrued liabilities.

| | (d) | Diluted Earnings (Loss) Per Share                                             
| | --- | ------------------------------------------------------------------------------
| |     |                                                                               
| |     | The following table reconciles our basic and diluted
      earnings per share:

| | (expressed in thousands of US$, except per share amounts) |  | 2010    |  |  | 2009    |   |  | 2008   |  
| | --------------------------------------------------------- |  | ------- |  |  | ------- | - |  | ------ | -
| |                                                           |  |         |  |  |         |   |  |        |  
| | Basic earnings (losses)                                   |  | 346,239 |  |  | (13,193 | ) |  | (5,946 | )
| | Diluted earnings (losses)                                 |  | 346,239 |  |  | (13,193 | ) |  | (5,946 | )
| |                                                           |  |         |  |  |         |   |  |        |  
| | Weighted average shares outstanding (000s)                |  | 77,972  |  |  | 68,845  |   |  | 62,694 |  
| | Effect of dilutive securities                             |  |         |  |  |         |   |  |        |  
| | Incremental shares from share options                     |  | 384     |  |  | -       |   |  | -      |  
| | Weighted average diluted shares outstanding               |  | 78,356  |  |  | 68,845  |   |  | 62,694 |  
| |                                                           |  |         |  |  |         |   |  |        |  
| | Basic earnings (loss) per share                           |  | 4.44    |  |  | (0.19   | ) |  | (0.09  | )
| | Diluted earnings
      (loss) per share                   |  | 4.42    |  |  | (0.19   | ) |  | (0.09  | )

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.

For the years ended December 31, 2009
  and 2008 the effect of potential issuances of shares under options and warrants
  would have been anti-dilutive as a loss was reported and therefore basic and
  diluted loss per share were the same.

|14 | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | During the year ended December 31, 2010, we recorded
      administrative, technical services and expense reimbursements of $31,000
      (2009 - $453,000; 2008 - $1,276,000) from companies related by common
      directors or officers including our equity accounted investee. At December
      31, 2010, accounts receivable include $22,000 (2009 - $35,000) 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.

F-32

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|15 | 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 and monitored 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 out our strategic plans and support operations through the current
      operating period.
|   |                                                                                                                                                                                                                                                                                                                          
|16 | INCOME TAXES                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                          
|   | The income taxes shown on the Consolidated Statements of
      Earnings (Loss) differ from the amounts obtained by applying statutory
      rates due to the following:                                                                                                                                                  

| |                                                           |  | 2010    |   |  | 2009    |   |  | 2008   |  
| | --------------------------------------------------------- |  | ------- | - |  | ------- | - |  | ------ | -
| | Statutory tax rate                                        |  | 28.50%  |   |  | 30.00%  |   |  | 31.00% |  
| |                                                           |  | **$**   |   |  | **$**   |   |  | **$**  |  
| | Earnings (loss) for the year before income
      taxes    |  | 369,536 |   |  | (17,501 | ) |  | 12,022 |  
| |                                                           |  |         |   |  |         |   |  |        |  
| | Provision for income taxes based on
      statutory rates |  | 105,318 |   |  | (5,250  | ) |  | 3,727  |  
| | Differences in foreign tax rates                          |  | (2,893  | ) |  | (88     | ) |  | 2,432  |  
| | Foreign exchange                                          |  | (2,157  | ) |  | 868     |   |  | (1,033 | )
| | Capital gain on disposal of mineral properties            |  | (60,324 | ) |  | -       |   |  | -      |  
| | Tax benefits not recognized (recognized)
      and other  |  | (16,647 | ) |  | 162     |   |  | 12,842 |  
| |                                                           |  | 23,297  |   |  | (4,308  | ) |  | 17,968 |  

F-33

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|16 | INCOME TAXES (Contd)
|-- | ---------------------
|   |                      
|   | ii)                  

| |                                                             |  | 2010    |   |  | 2009    |  
| | ----------------------------------------------------------- |  | ------- | - |  | ------- | -
| |                                                             |  | **$**   |   |  | **$**   |  
| | Future tax assets                                           |  |         |   |  |         |  
| |                                                             |  |         |   |  |         |  
| | Property, plant and equipment and resource
      properties |  | -       |   |  | 95      |  
| |                                                             |  |         |   |  |         |  
| | Capital and non-capital loss carry-forwards                 |  | 3,119   |   |  | 16,492  |  
| | Foreign resource pools                                      |  | 618     |   |  | 586     |  
| | Share issuance costs                                        |  | 3,734   |   |  | 3,353   |  
| | Other investments                                           |  | 10,849  |   |  | 10,602  |  
| | Total future tax assets                                     |  | 18,320  |   |  | 31,128  |  
| |                                                             |  |         |   |  |         |  
| | Future tax liabilities                                      |  |         |   |  |         |  
| | Resource properties                                         |  | (40,710 | ) |  | (44,534 | )
| | Marketable securities                                       |  | (32,083 | ) |  | (1,263  | )
| | Total future tax liabilities                                |  | (72,793 | ) |  | (45,797 | )
| |                                                             |  |         |   |  |         |  
| | Valuation allowance for future tax assets                   |  | (5,966  | ) |  | (22,129 | )
| | Future income tax liability                                 |  | (60,439 | ) |  | (36,798 | )
| |                                                             |  |         |   |  |         |  
| | Current                                                     |  | 3,047   |   |  | -       |  
| | Non-current                                                 |  | 57,392  |   |  | 36,798  |  
| | Total                                                       |  | 60,439  |   |  | 36,798  |  

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,
  2010.

At December 31, the company has the
  following estimated tax operating losses:

| |           |  | 2010   |  |  | 2009   | 
| | --------- |  | ------ |  |  | ------ | 
| |           |  | **$**  |  |  | **$**  | 
| |           |  |        |  |  |        | 
| | Argentina |  | 8,635  |  |  | 23,546 | 
| | Australia |  | 12,091 |  |  | 10,225 | 
| | Canada    |  | 354    |  |  | 28,110 | 
| | Chile     |  | 144    |  |  | 131    | 
| | Mexico    |  | 53,962 |  |  | 45,043 | 
| | Peru      |  | 1,222  |  |  | 439    | 
| | U.S.A.    |  | 4,680  |  |  | 4,370  | 

The operating losses expire between
  2011 and 2029, with the exception of those for Chile and Australia which are
  available indefinitely to reduce future taxable income.

F-34

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|17 | SUPPLEMENTARY CASH FLOW INFORMATION                                                                                                                                                                                
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                    
|   | The following table summarizes the changes in operating
      working capital items, non-cash investing activities and interest and
      taxes paid during the years ended December 31, 2010, 2009 and
      2008:

Decrease (increase) in non-cash working
      
      2010
      
      
      2009
      
      
      2008capital activities
      
      **$**
      
      
      **$**
      
      
      **$**Accounts receivable
      
      (16,478
      )
      
      (3,584
      )
      
      (373
      )Prepaid expenses and deposits
      
      (3,767
      )
      
      (907
      )
      
      (1,692
      )Inventory
      
      (20,245
      )
      
      (22,501
      )
      
      -Restricted cash
      
      (201
      )
      
      -
      
      
      -Accounts payable, accrued liabilities and
        current portion of asset retirement obligation
      
      21,447
      
      
      3,985
      
      
      1,345Accrued interest on convertible debt
      
      -
      
      
      10
      
      
      2,229Current portion of future income tax
        liability
      
      3,047
      
      
      (12,006
      )
      
      11,338(16,197
      )
      
      (35,003
      )
      
      12,847Non-cash investing activitiesPromissory note
        received for sale of Snowfield and Brucejack properties
      
      39,069
      
      
      -
      
      
      -Shares received for sale of mineral
        properties
      
      187,202
      
      
      388
      
      
      -226,271
      
      
      388
      
      
      -Interest and taxes paidInterest paid
      
      6,210
      
      
      6,210
      
      
      3,117Taxes paid
      
      -
      
      
      9,100
      
      
      -6,210
      
      
      15,310
      
      
      3,117


|18 | OTHER INCOME (EXPENSE)
|-- | ----------------------

Note
      
      
      2010
      
      
      2009
      
      
      2008**$**
      
      
      **$**
      
      
      **$**Gain (loss) on sale of marketable
        securities and other investments
      
      6b, 7
      
      
      3,114
      
      
      (1,279
      )
      
      2,090Unrealized gain (loss) on financial instruments
        held-for-trading
      
      6c
      
      
      (102
      )
      
      412
      
      
      114Write-down of marketable securities and
        other investments, net of interest received
      
      6b, 7
      
      
      -
      
      
      534
      
      
      (22,794
      )Write-down of convertible debenture receivable
      
      6c
      
      
      -
      
      
      (2,002
      )
      
      -Write down of mineral property and
        property, plant and equipment
      
      10
      
      
      (238
      )
      
      (377
      )
      
      -Gain on sale of silver bullion
      
      4
      
      
      -
      
      
      -
      
      
      23,699Other expenses
      
      
      
      
      (61
      )
      
      -
      
      
      -2,713
      
      
      (2,712
      )
      
      3,109


F-35

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|19 | SEGMENTED FINANCIAL INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | All of our operations are within the mining industry and
      our major product is silver concentrate. Our activities include the
      exploration and development of silver-dominant mineral properties located
      in seven countries and the production of silver concentrate at the
      Pirquitas mine in Argentina. The reported segments are those operations
      whose operating results are reviewed by the Chief Executive Officer on a
      regular basis. Our exploration activities have been aggregated and
      reported as a non-operating segment because total exploration assets
      exceeded 10% of our total consolidated assets.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Our reportable segments for the year ended December 31,
      2010 are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

| |                                                                               |  |     |  |  | December 31, 2010 |  
| | ----------------------------------------------------------------------------- |  | --- |  |  | ----------------- | -
| |                                                                               |  |     |  |  |                   |  
| |                                                                               |  |     |  |  | Pirquitas         |  
| |                                                                               |  |     |  |  | Mine              |  
| |                                                                               |  |     |  |  | **$**             |  
| |                                                                               |  |     |  |  |                   |  
| | Revenue from external customers                                               |  | (a) |  |  | 112,256           |  
| | Cost of sales                                                                 |  |     |  |  | (75,971           | )
| | Depletion, depreciation and amortization                                      |  |     |  |  | (26,327           | )
| | General and administration                                                    |  |     |  |  | -                 |  
| | Interest expense and financing fees                                           |  |     |  |  | (242              | )
| | Gain on sale of mineral properties, and properties, plant
      and equipment |  |     |  |  | -                 |  
| | Other                                                                         |  | (b) |  |  | (6,240            | )
| | Loss before income taxes                                                      |  |     |  |  | 3,476             |  
| | Income tax expense                                                            |  |     |  |  | (1,271            | )
| |                                                                               |  |     |  |  |                   |  
| | Net earnings (loss)                                                           |  |     |  |  | 2,205             |  
| |                                                                               |  |     |  |  |                   |  
| | Mineral properties, and property, plant and
      equipment                   |  |     |  |  | 407,196           |  

| | (a) | All revenues are attributed to sales in
      Argentina.                                                                                                                                                                                  
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | Other includes stock-based compensation, property
      examination and exploration, reclamation and accretion, investment income,
      foreign exchange gain (loss), other income (expenses) and share of loss of
      equity investee.

F-36

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|19 | SEGMENTED FINANCIAL INFORMATION (Contd)
|-- | ----------------------------------------

| |                                                                               |  |     |  |  | December 31, 2009 |  
| | ----------------------------------------------------------------------------- |  | --- |  |  | ----------------- | -
| |                                                                               |  |     |  |  |                   |  
| |                                                                               |  |     |  |  | Pirquitas         |  
| |                                                                               |  |     |  |  | Mine              |  
| |                                                                               |  |     |  |  | **$**             |  
| |                                                                               |  |     |  |  |                   |  
| | Revenue from external customers                                               |  | (a) |  |  | 5,442             |  
| | Cost of sales                                                                 |  |     |  |  | (5,926            | )
| | Depletion, depreciation and amortization                                      |  |     |  |  | (2,039            | )
| | General and administration                                                    |  |     |  |  | (2                | )
| | Interest expense and financing fees                                           |  |     |  |  | -                 |  
| | Gain on sale of mineral properties, and properties, plant
      and equipment |  |     |  |  | -                 |  
| | Other                                                                         |  | (b) |  |  | 110               |  
| | Loss before income taxes                                                      |  |     |  |  | (2,415            | )
| | Income tax recovery (expense)                                                 |  |     |  |  | (685              | )
| | Net loss                                                                      |  |     |  |  | (3,100            | )
| |                                                                               |  |     |  |  |                   |  
| | Mineral properties, and property, plant and equipment                         |  |     |  |  | 420,257           |  

| | (a) | All revenues are attributed to sales in
      Argentina.                                                                                                                                                 
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | Other includes stock-based compensation, property
      examination and exploration, reclamation and accretion, investment income,
      foreign exchange gain (loss), and other income
      (expenses).

During the year ended December 31,
  2010, 100% of our silver concentrate production was sold to one customer (note
  6(d)).

Segmented assets by geographic location
  are as follows:

| |               |  | December 31, 2010 |  |  | December 31, 2009 | 
| | ------------- |  | ----------------- |  |  | ----------------- | 
| |               |  | Mineral property  |  |  |                   | 
| |               |  | costs and         |  |  |                   | 
| |               |  | property, plant   |  |  |                   | 
| |               |  | and equipment     |  |  | Total assets      | 
| |               |  | **$**             |  |  | **$**             | 
| |               |  |                   |  |  |                   | 
| | Argentina     |  | 425,962           |  |  | 570,752           | 
| | Australia     |  | 20,841            |  |  | 20,992            | 
| | Canada        |  | 1,773             |  |  | 502,038           | 
| | Chile         |  | 8,116             |  |  | 8,131             | 
| | Mexico        |  | 95,330            |  |  | 96,964            | 
| | Peru          |  | 52,572            |  |  | 53,812            | 
| | United States |  | 9,065             |  |  | 9,328             | 
| |               |  | 613,659           |  |  | 1,262,017         | 

F-37

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|20 | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On February 28, 2011 we reached an agreement to acquire
      the remaining 30% interest in the San Luis project from our joint venture
      partner, Esperanza Resources Corp. (Esperanza). Upon completion of the
      acquisition we will own 100% of the project. Under the terms of the
      agreement we will pay C$17 million in cash, transfer to Esperanza the
      6.459 million shares of Esperanza that we own, and a 1% net smelter return
      royalty on future revenues. The full financial impact of this transaction
      has yet to be fully determined.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|21 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED
      STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
      (GAAP)                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Consolidated summarized balance
  sheets:

| |                                                     |  |           |  |  |                 |   |  | 2010    |  |  |          |   |  |                 |   |  | 2009     |  
| | --------------------------------------------------- |  | --------- |  |  | --------------- | - |  | ------- |  |  | -------- | - |  | --------------- | - |  | -------- | -
| |                                                     |  |           |  |  |                 |   |  |         |  |  |          |   |  |                 |   |  |          |  
| |                                                     |  | Canadian  |  |  | **Adjustments** |   |  | U.S.    |  |  | Canadian |   |  | **Adjustments** |   |  | U.S.     |  
| |                                                     |  | GAAP      |  |  |                 |   |  | GAAP    |  |  | GAAP     |   |  |                 |   |  | GAAP     |  
| |                                                     |  | **$**     |  |  | **$**           |   |  | **$**   |  |  | **$**    |   |  | **$**           |   |  | **$**    |  
| |                                                     |  |           |  |  |                 |   |  |         |  |  |          |   |  |                 |   |  |          |  
| | Assets                                              |  |           |  |  |                 |   |  |         |  |  |          |   |  |                 |   |  |          |  
| | Current assets (a)i)                                |  | 342,054   |  |  | -               |   |  | 342,054 |  |  | 75,197   |   |  | (1,859          | ) |  | 73,338   |  
| | Convertible debenture                               |  | 7,180     |  |  | -               |   |  | 7,180   |  |  | 6,081    |   |  | -               |   |  | 6,081    |  
| | Value added tax recoverable                         |  | 70,782    |  |  | -               |   |  | 70,782  |  |  | 54,095   |   |  | -               |   |  | 54,095   |  
| | Mineral property costs (a)i)                        |  | 377,119   |  |  | (273,467        | ) |  | 103,652 |  |  | 371,065  |   |  | (269,111        | ) |  | 101,954  |  
| | Other property, plant and equipment (a)vi)          |  | 236,540   |  |  | 2,720           |   |  | 239,260 |  |  | 241,553  |   |  | 3,474           |   |  | 245,027  |  
| | Other assets                                        |  | 2,071     |  |  | -               |   |  | 2,071   |  |  | 1,934    |   |  | -               |   |  | 1,934    |  
| | Investment accounted for under the equity method    |  | 226,271   |  |  | -               |   |  | 226,271 |  |  | -        |   |  | -               |   |  | -        |  
| |                                                     |  |           |  |  |                 |   |  |         |  |  |          |   |  |                 |   |  |          |  
| |                                                     |  | 1,262,017 |  |  | (270,747        | ) |  | 991,270 |  |  | 749,925  |   |  | (267,496        | ) |  | 482,429  |  
| |                                                     |  |           |  |  |                 |   |  |         |  |  |          |   |  |                 |   |  |          |  
| | Liabilities                                         |  |           |  |  |                 |   |  |         |  |  |          |   |  |                 |   |  |          |  
| | Current liabilities                                 |  | 38,210    |  |  | -               |   |  | 38,210  |  |  | 50,682   |   |  | -               |   |  | 50,682   |  
| | Long-term convertibles notes (a)vi)                 |  | 118,203   |  |  | -               |   |  | 118,203 |  |  | 110,739  |   |  | -               |   |  | 110,739  |  
| | Other liabilities (a)i)                             |  | 73,832    |  |  | (40,511         | ) |  | 33,321  |  |  | 51,318   |   |  | (36,798         | ) |  | 14,520   |  
| |                                                     |  |           |  |  |                 |   |  |         |  |  |          |   |  |                 |   |  |          |  
| |                                                     |  | 230,245   |  |  | (40,511         | ) |  | 189,734 |  |  | 212,739  |   |  | (36,798         | ) |  | 175,941  |  
| |                                                     |  |           |  |  |                 |   |  |         |  |  |          |   |  |                 |   |  |          |  
| | Shareholders Equity                                |  |           |  |  |                 |   |  |         |  |  |          |   |  |                 |   |  |          |  
| | Share capital (a)iii)                               |  | 671,542   |  |  | (950            | ) |  | 670,592 |  |  | 538,700  |   |  | (950            | ) |  | 537,750  |  
| | Value assigned to:                                  |  |           |  |  |                 |   |  |         |  |  |          |   |  |                 |   |  |          |  
| | Long-term convertible notes (a)vi)                  |  | 37,383    |  |  | -               |   |  | 37,383  |  |  | 37,383   |   |  | -               |   |  | 37,383   |  
| | Stock options (a)v)                                 |  | 42,660    |  |  | (4,186          | ) |  | 38,474  |  |  | 40,417   |   |  | (4,186          | ) |  | 36,231   |  
| | Contributed surplus                                 |  | 510       |  |  | -               |   |  | 510     |  |  | 510      |   |  | -               |   |  | 510      |  
| | Accumulated other comprehensive income
      (a)ii) |  | 1,515     |  |  | 8,147           |   |  | 9,662   |  |  | (11,747  | ) |  | 6,264           |   |  | (5,483   | )
| | Deficit (a)i), (a)ii), (a)iii), (a)vi)              |  | 277,666   |  |  | (233,247        | ) |  | 44,419  |  |  | (68,573  | ) |  | (231,826        | ) |  | (300,399 | )
| |                                                     |  |           |  |  |                 |   |  |         |  |  |          |   |  |                 |   |  |          |  
| |                                                     |  | 1,031,276 |  |  | (230,236        | ) |  | 801,040 |  |  | 536,690  |   |  | (230,698        | ) |  | 305,992  |  
| |                                                     |  |           |  |  |                 |   |  |         |  |  |          |   |  |                 |   |  |          |  
| | Non-controlling interest                            |  | 496       |  |  | -               |   |  | 496     |  |  | 496      |   |  | -               |   |  | 496      |  
| |                                                     |  |           |  |  |                 |   |  |         |  |  |          |   |  |                 |   |  |          |  
| |                                                     |  | 1,262,017 |  |  | (270,747        | ) |  | 991,270 |  |  | 749,925  |   |  | (267,496        | ) |  | 482,429  |  

F-38

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|21 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND
      UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
        (GAAP) (Contd)
|-- | ------------------------------------------------------------------------------------------------------------------------------

Consolidated summarized statements
  of loss and other comprehensive income (loss):

| |                                                                                       |  | 2010    |   |  | 2009    |   |  | 2008     |  
| | ------------------------------------------------------------------------------------- |  | ------- | - |  | ------- | - |  | -------- | -
| |                                                                                       |  | **$**   |   |  | **$**   |   |  | **$**    |  
| |                                                                                       |  |         |   |  |         |   |  |          |  
| | Earnings (loss) in accordance with
      Canadian GAAP                                |  | 346,239 |   |  | (13,193 | ) |  | (5,946   | )
| | Mineral property costs for the year (a)i)                                             |  | (47,695 | ) |  | (27,997 | ) |  | (37,763  | )
| | Operating costs (a)i)                                                                 |  | -       |   |  | (5,142  | ) |  | -        |  
| | Adjustment for depletion, depreciation and amortization
      (a)i)                   |  | 3,370   |   |  | (30     | ) |  | -        |  
| | Future income tax expense (recovery) on
      marketable securities (a)ii)            |  | (1,883  | ) |  | (1,034  | ) |  | 3,393    |  
| | Reversal of future income tax expense (recovery), net of
      foreign exchange (a)i) |  | 1,101   |   |  | (985    | ) |  | -        |  
| | Financing fees on convertible notes (a)vi)                                            |  | (754    | ) |  | (126    | ) |  | 3,600    |  
| | Gain on sale of mineral property (a)i)                                                |  | 44,440  |   |  | 221     |   |  | 6,948    |  
| | Mineral costs written-off during the year
      (a)i)                                 |  | -       |   |  | 377     |   |  | -        |  
| |                                                                                       |  |         |   |  |         |   |  |          |  
| | Earnings (loss) in accordance with U.S.
      GAAP                                    |  | 344,818 |   |  | (47,909 | ) |  | (29,768  | )
| |                                                                                       |  |         |   |  |         |   |  |          |  
| | Other comprehensive income (loss) in accordance with Canadian GAAP                    |  | 13,262  |   |  | 7,822   |   |  | (114,106 | )
| | Translation adjustment                                                                |  | -       |   |  | -       |   |  | 48,948   |  
| | Future income tax recovery (expense) on
      marketable securities (a)ii)            |  | 1,883   |   |  | 1,034   |   |  | (3,393   | )
| |                                                                                       |  |         |   |  |         |   |  |          |  
| | Other comprehensive income (loss) in
      accordance with U.S. GAAP                  |  | 15,145  |   |  | 8,856   |   |  | (68,551  | )
| |                                                                                       |  |         |   |  |         |   |  |          |  
| | Total comprehensive income (loss) in
      accordance with U.S. GAAP                  |  | 359,963 |   |  | (39,053 | ) |  | (98,319  | )
| |                                                                                       |  |         |   |  |         |   |  |          |  
| | Weighted-average common shares (000s)                                                |  |         |   |  |         |   |  |          |  
| | Basic                                                                                 |  | 77,972  |   |  | 68,845  |   |  | 62,694   |  
| | Diluted                                                                               |  | 78,356  |   |  | 68,845  |   |  | 62,694   |  
| |                                                                                       |  |         |   |  |         |   |  |          |  
| | Earnings (loss) per share, expressed in
      U.S. dollars                            |  |         |   |  |         |   |  |          |  
| | Basic                                                                                 |  | 4.42    |   |  | (0.70   | ) |  | (0.47    | )
| | Diluted                                                                               |  | 4.40    |   |  | (0.70   | ) |  | (0.47    | )

F-39

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|21 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND
      UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
        (GAAP) (Contd)
|-- | ------------------------------------------------------------------------------------------------------------------------------

Consolidated summarized statements
  of cash flows:

| |                                            |  | 2010    |   |  | 2009     |   |  | 2008     |  
| | ------------------------------------------ |  | ------- | - |  | -------- | - |  | -------- | -
| |                                            |  | **$**   |   |  | **$**    |   |  | **$**    |  
| | Cash flows from operating activities       |  |         |   |  |          |   |  |          |  
| | Pursuant to Canadian GAAP                  |  | (11,110 | ) |  | (39,943  | ) |  | (19,093  | )
| | Mineral property costs (a)i)               |  | (52,912 | ) |  | (25,157  | ) |  | (37,763  | )
| | Financing fees on convertible notes (a)vi) |  | -       |   |  | -        |   |  | 3,600    |  
| | Pursuant to U.S. GAAP                      |  | (64,022 | ) |  | (65,100  | ) |  | (53,256  | )
| |                                            |  |         |   |  |          |   |  |          |  
| | Cash flows from financing activities       |  |         |   |  |          |   |  |          |  
| | Pursuant to Canadian GAAP                  |  | 124,076 |   |  | 146,413  |   |  | 138,719  |  
| | Financing fees on convertible notes (a)vi) |  | -       |   |  | -        |   |  | (3,600   | )
| | Pursuant to U.S. GAAP                      |  | 124,076 |   |  | 146,413  |   |  | 135,119  |  
| |                                            |  |         |   |  |          |   |  |          |  
| | Cash flows from investing activities       |  |         |   |  |          |   |  |          |  
| | Pursuant to Canadian GAAP                  |  | 92,686  |   |  | (151,824 | ) |  | (129,213 | )
| | Mineral property costs (a)i)               |  | 52,912  |   |  | 25,157   |   |  | 37,763   |  
| | Pursuant to U.S. GAAP                      |  | 145,598 |   |  | (126,667 | ) |  | (91,450  | )

| | 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-40

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|21 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND
      UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
        (GAAP) (Contd)
|-- | ------------------------------------------------------------------------------------------------------------------------------

| |     | In early April 2006, a Feasibility Study Update for the
      Pirquitas property was completed. This study defined proven and probable
      reserves and, as a consequence, subsequent development costs have been
      deferred under U.S. GAAP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | The commencement of production under Canadian GAAP is
      based on criteria pre-determined by management in regards to when the
      asset is considered to be available for use. The U.S. GAAP definition is
      not as broad, with production considered to be achieved with the
      extraction/production of saleable minerals from an ore body, regardless of
      the level of production. As a result of applying the U.S. GAAP definition,
      we have determined that production commenced for purposes of U.S. GAAP on
      November 1, 2009. Due to the timing of title transfer on shipments, there
      was no resulting GAAP difference related to revenues; however, additional
      operating costs of $5,142,000 have been recorded related to the month of
      November 2009.                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | On July 17, 2008, we closed the sale of the Shafter
      project (note 10). For Canadian GAAP, the sale resulted in a gain of
      $31,463,000 after deducting the carrying value of disposed assets and
      liabilities and transaction costs. For U.S. GAAP, the gain on sale of
      mineral property was increased by $6,948,000, reflecting the lower
      carrying value of mineral property costs under U.S. GAAP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | In February 2010 the Company completed the sale of the
      Silvertip property (note 10). For Canadian GAAP, the sale resulted in a
      gain of $13,073,000 after deducting the carrying value of disposed assets
      and liabilities and transaction costs. For U.S. GAAP, the gain on sale of
      mineral property was increased by $1,859,000, reflecting the lower
      carrying value of mineral property costs under U.S. GAAP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | During December 2010 we sold the Brucejack and Snowfield
      properties to Pretium resources Inc. We recognised a gain on disposal
      under Canadian GAAP for $388,761,000 ($360,612,000 after tax), net of
      selling costs of $5,922,000. For U.S. GAAP, the gain on sale of mineral
      properties was increased by $42,581,000, reflecting the lower carrying
      value of mineral property costs under U.S. GAAP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | For Canadian GAAP, cash flows relating to mineral
      property exploration and land use costs are reported as investing
      activities. For U.S. GAAP, these costs are characterized as operating
      activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ii) | Under Canadian GAAP, effective September 30, 2008, the
      Company adopted the provisions of EIC- 172, Income Statement Presentation
      of a Tax Loss Carryforward Recognized Following an Unrealized Gain in
      Other Comprehensive Income, 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
      (loss). For U.S. GAAP purposes, other comprehensive income would increase
      and income tax recovery would decrease by $1,883,000 for the year ended
      December 31, 2010 and $1,034,000 for the year ended December 31, 2009 as
      compared to an increase of other comprehensive loss and a decrease of
      income tax expense of $3,393,000 for the year ended December 31,
      2008.

F-41

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|21 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND
      UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
        (GAAP) (Contd)
|-- | ------------------------------------------------------------------------------------------------------------------------------

| | iii) | Under Canadian GAAP, before the introduction of CICA 1581
      and 1582,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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | 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,
      (SFAS 123R, Codified within ASC 718) 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 between Canadian and U.S.
      GAAP.                                                  

F-42

---

|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|21 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND
      UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
        (GAAP) (Contd)
|-- | ------------------------------------------------------------------------------------------------------------------------------

| | vi) | The adoption of FASB Staff Position Accounting Principles
      Board 14-1 (FSP APB 14-1, Codified within ASC 470 and ASC 825) 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 loss would decrease by
      $3,600,000 for the year ended December 31, 2008 and amortization of
      financing fees would increase by $126,000 for the year ended December 31,
      2009, and $754,000 for the year ended December 31, 2010, representing
      amortization recorded to the income statement since the commencement of
      production on November 1, 2009.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | The results of adopting this standard have been
      retrospectively applied in these consolidated financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| | 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                                                                                                                     

2010
      
      
      2009**$**
      
      
      **$**Value added tax recoverable
      
      901
      
      
      19Other receivables
      
      29,422
      
      
      6,21930,323
      
      
      6,238


| | ii) | Income Tax Uncertainty                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     | The Company and its subsidiaries file federal income tax
      returns in Canada, the US, and several other foreign jurisdictions; the
      Companys U.S. subsidiaries also file U.S. state tax returns where
      required by law. With few exceptions, the Company and its U.S.
      subsidiaries are no longer subject to Canadian federal, U.S. federal,
      state and local examinations by the tax authorities for years prior to
      2005. The Companys subsidiaries in other foreign jurisdictions, with few
      exceptions, are no longer subject to examination by the respective
      authorities for years prior to 2003.

F-43

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|Silver Standard Resources Inc.                                                                 
|-----------------------------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                                     
|December 31, 2010,
      2009 and 2008                                                         
|(tabular amounts expressed in thousands of United States
      dollars unless otherwise stated)

|21 | MATERIAL DIFFERENCES BETWEEN CANADIAN AND
      UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
        (GAAP) (Contd)
|-- | ------------------------------------------------------------------------------------------------------------------------------

A reconciliation of the beginning and
  ending amount of unrecognized tax benefits is as follows:

| |                                                                    |  | 2010  |   |  | 2009  | 
| | ------------------------------------------------------------------ |  | ----- | - |  | ----- | 
| |                                                                    |  | **$** |   |  | **$** | 
| |                                                                    |  |       |   |  |       | 
| | Opening balance                                                    |  | 3,150 |   |  | 347   | 
| | Increases based on tax positions related to the current
      year |  | (177  | ) |  | 2,803 | 
| |                                                                    |  | 2,973 |   |  | 3,150 | 

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.

F-44

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