|                                       |
|--------------------------------------------|
|                                       |
| AMERICAS SILVER CORPORATION                |
| MANAGEMENT’S DISCUSSION AND ANALYSIS |
| FOR THE YEAR ENDED DECEMBER 31, 2016       |
| DATED MARCH 30, 2017                       |
|                                       |

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| Forward-Looking Statements                                                     | 1  |
|--------------------------------------------------------------------------------|----|
| Cautionary Note to Investors in United States Regarding Resources and Reserves | 1  |
| Management’s Discussion and Analysis                                     | 2  |
| Overview                                                                       | 3  |
| Recent Developments and Operational Discussion                                 | 4  |
| Results of Operations                                                          | 10 |
| Selected Annual Financial Information                                          | 13 |
| Summary of Quarterly Results                                                   | 14 |
| Liquidity                                                                      | 14 |
| Capital Resources                                                              | 17 |
| Off-Balance Sheet Arrangements                                                 | 17 |
| Transactions with Related Parties                                              | 17 |
| Risk Factors                                                                   | 17 |
| Significant Accounting Policies and Estimates                                  | 29 |
| Financial Instruments                                                          | 31 |
| Capital Structure                                                              | 32 |
| Controls and Procedures                                                        | 32 |
| Non-IFRS Measures: Cash Cost per Ounce and All-In Sustaining Cost per Ounce    | 32 |

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| · | Production of 4.7 million consolidated silver equivalent ounces and 2.4 million silver ounces at cost of sales of $9.86/oz. equivalent silver, by-product cash cost of $10.00/oz. silver, and all-in sustaining cost of $12.71/oz. silver during fiscal 2016. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Substantial increase of operating cash flow generated at $5.4 million in fiscal 2016 compared to ($5.6 million) of operating cash flow used in fiscal 2015. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The Company’s next generation low-cost mine, San Rafael, was approved for construction by the Board in Q3 2016 after the release of the Pre-feasibility Study in Q1 2016 and is proceeding on budget for commercial production by the end of Q3 2017. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Completion of the private placement for gross proceeds of C$31.6 million in Q2/Q3 2016 materially improving the Company’s liquidity position. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Debt repayment of $2 million to lenders in second half of 2016 reducing the Company’s leverage. |
|--------|-------------------------------------------------------------------------------------------------------|

| · | Approved an exploration budget of $2 million for 2017 aimed at testing the Company’s highly-prospective land package at the Cosalá Operations. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Progressed the Company’s listing on the New York Stock Exchange MKT to completion in January 2017 increasing the Company’s share liquidity and future access to capital. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                          |   |        Fiscal Year Ended December 31, |       |
|-----------------------------------------------|--------|---------------------------------------------------------------------|------------|
|                                          |   | 2016                                                                |       |   | 2015 |   |
| Revenues ($ M)                                |   | $                                                                   | 58.9       |   |   | $ | 53.5 |   |
| Silver Produced (oz)                          |   |                                                                | 2,389,808  |   |   |   | 2,652,026 |   |
| Zinc Produced (lbs)                           |   |                                                                | 10,488,773 |   |   |   | 11,647,962 |   |
| Lead Produced (lbs)                           |   |                                                                | 29,067,673 |   |   |   | 22,905,826 |   |
| Copper Produced (lbs)                         |   |                                                                | 1,058,250  |   |   |   | 2,054,896 |   |
| Total Silver Equivalent Produced (oz)1        |   |                                                                | 4,682,030  |   |   |   | 4,866,145 |   |
| Cost of Sales/Ag Eq Oz Produced ($/oz)        |   | $                                                                   | 9.86       |   |   | $ | 10.80 |   |
| Cash Cost/Ag Oz Produced ($/oz)2              |   | $                                                                   | 10.00      |   |   | $ | 12.75 |   |
| All-In Sustaining Cost/Ag Oz Produced ($/oz)2 |   | $                                                                   | 12.71      |   |   | $ | 17.16 |   |
| Net Income (Loss) ($ M)                       |   | $                                                                   | (5.2       | ) |   | $ | (19.4 | ) |
| Comprehensive Income (Loss) ($ M)             |   | $                                                                   | (4.7       | ) |   | $ | (23.7 | ) |

|  | 1 | Throughout this MD&A, references to silver equivalent ounces produced are based on prices of $14.50 per ounce silver, $0.75 per pound zinc, $0.80 per pound lead, and $2.00 per pound copper for fiscal 2016, and $17 per ounce silver, $0.95 per pound zinc, $0.90 per pound lead, and $2.90 per pound copper for fiscal 2015. |
|--|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2 | Refer to “Non-IFRS Measures: Cash Cost per Ounce and All-In Sustaining Cost per Ounce” section in this MD&A. |
|--|---|------------------------------------------------------------------------------------------------------------------------------|

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|                                          |   | Fiscal Year Ended December 31, |       |
|-----------------------------------------------|--------|--------------------------------|------------|
|                                          |   | 2016                           |       |   | 2015 |   |
| Tonnes Milled                                 |   |                           | 500,509    |   |   |   | 506,148 |   |
| Silver Grade (g/t)                            |   |                           | 78         |   |   |   | 86 |   |
| Zinc Grade (%)                                |   |                           | 1.35       |   |   |   | 1.36 |   |
| Lead Grade (%)                                |   |                           | 0.57       |   |   |   | 0.61 |   |
| Copper Grade (%)                              |   |                           | 0.20       |   |   |   | 0.26 |   |
| Silver Recovery (%)                           |   |                           | 79.9       |   |   |   | 83.4 |   |
| Zinc Recovery (%)                             |   |                           | 70.9       |   |   |   | 79.6 |   |
| Lead Recovery (%)                             |   |                           | 66.4       |   |   |   | 80.7 |   |
| Copper Recovery (%)                           |   |                           | 47.2       |   |   |   | 60.6 |   |
| Silver Produced (oz)                          |   |                           | 1,006,119  |   |   |   | 1,162,290 |   |
| Zinc Produced (lbs)                           |   |                           | 10,488,773 |   |   |   | 11,647,962 |   |
| Lead Produced (lbs)                           |   |                           | 4,188,539  |   |   |   | 5,469,155 |   |
| Copper Produced (lbs)                         |   |                           | 1,058,250  |   |   |   | 1,750,143 |   |
| Total Silver Equivalent Produced (oz)         |   |                           | 1,925,699  |   |   |   | 2,401,303 |   |
| Silver Sold (oz)                              |   |                           | 956,939    |   |   |   | 1,159,112 |   |
| Zinc Sold (lbs)                               |   |                           | 10,258,081 |   |   |   | 11,267,595 |   |
| Lead Sold (lbs)                               |   |                           | 4,251,898  |   |   |   | 5,602,810 |   |
| Copper Sold (lbs)                             |   |                           | 1,017,940  |   |   |   | 1,731,286 |   |
| Realized Silver Price ($/oz)                  |   | $                              | 17.07      |   |   | $ | 15.61 |   |
| Realized Zinc Price ($/lb)                    |   | $                              | 0.96       |   |   | $ | 0.87 |   |
| Realized Lead Price ($/lb)                    |   | $                              | 0.86       |   |   | $ | 0.80 |   |
| Realized Copper Price ($/lb)                  |   | $                              | 2.22       |   |   | $ | 2.54 |   |
| Cost of Sales/Ag Eq Oz Produced ($/oz)        |   | $                              | 9.18       |   |   | $ | 9.25 |   |
| Cash Cost/Ag Oz Produced ($/oz)1              |   | $                              | 7.79       |   |   | $ | 10.80 |   |
| All-In Sustaining Cost/Ag Oz Produced ($/oz)1 |   | $                              | 9.31       |   |   | $ | 14.89 |   |

|  | 1 | Refer to “Non-IFRS Measures: Cash Cost per Ounce and All-In Sustaining Cost per Ounce” section in this MD&A. |
|--|---|------------------------------------------------------------------------------------------------------------------------------|

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|                                          |   | Fiscal Year Ended December 31, |       |
|-----------------------------------------------|--------|--------------------------------|------------|
|                                          |   | 2016                           |       |   | 2015 |   |
| Tonnes Milled                                 |   |                           | 171,107    |   |   |   | 151,469 |   |
| Silver Grade (g/t)                            |   |                           | 266        |   |   |   | 324 |   |
| Lead Grade (%)1                               |   |                           | 7.29       |   |   |   | 6.89 |   |
| Copper Grade (%)1                             |   |                           | -          |   |   |   | 0.58 |   |
| Silver Recovery (%)                           |   |                           | 94.4       |   |   |   | 94.5 |   |
| Lead Recovery (%)                             |   |                           | 90.5       |   |   |   | 90.5 |   |
| Copper Recovery (%)                           |   |                           | -          |   |   |   | 96.7 |   |
| Silver Produced (oz)                          |   |                           | 1,383,689  |   |   |   | 1,489,736 |   |
| Lead Produced (lbs)                           |   |                           | 24,879,134 |   |   |   | 17,436,671 |   |
| Copper Produced (lbs)                         |   |                           | -          |   |   |   | 304,753 |   |
| Total Silver Equivalent Produced (oz)         |   |                           | 2,756,331  |   |   |   | 2,464,841 |   |
| Silver Sold (oz)                              |   |                           | 1,384,380  |   |   |   | 1,523,287 |   |
| Lead Sold (lbs)                               |   |                           | 24,976,822 |   |   |   | 17,250,666 |   |
| Copper Sold (lbs)                             |   |                           | -          |   |   |   | 323,722 |   |
| Realized Silver Price ($/oz)                  |   | $                              | 17.21      |   |   | $ | 15.60 |   |
| Realized Lead Price ($/lb)                    |   | $                              | 0.86       |   |   | $ | 0.80 |   |
| Realized Copper Price ($/lb)                  |   |                           | -          |   |   | $ | 2.57 |   |
| Cost of Sales/Ag Eq Oz Produced ($/oz)        |   | $                              | 10.33      |   |   | $ | 12.32 |   |
| Cash Cost/Ag Oz Produced ($/oz)2              |   | $                              | 11.60      |   |   | $ | 14.27 |   |
| All-In Sustaining Cost/Ag Oz Produced ($/oz)2 |   | $                              | 15.18      |   |   | $ | 18.92 |   |

|  | 1 | Lead and copper grades only refer to grades in silver-lead and silver-copper ores, respectively. |
|--|---|--------------------------------------------------------------------------------------------------|

|  | 2 | Refer to “Non-IFRS Measures: Cash Cost per Ounce and All-In Sustaining Cost per Ounce” section in this MD&A. |
|--|---|------------------------------------------------------------------------------------------------------------------------------|

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| Fiscal Year Ended December 31                 | 2016   |       |   | 2015   |   |       |   | 2014 1 |   |
|-----------------------------------------------|--------|------------|--------|--------|--------|------------|--------|--------|--------|
| Revenues ($ M)                                | $      | 58.9       |   |   | $      | 53.5       |   |   | $      | 31.5 |   |
| Net Loss ($ M)                                |   | (5.2       | )      |   |   | (19.4      | )      |   |   | (78.7 | ) |
| Comprehensive Loss ($ M)                      |   | (4.7       | )      |   |   | (23.7      | )      |   |   | (79.1 | ) |
|                                          |   |       |   |   |   |       |   |   |   |   |   |
| Net Loss per Common Share - Basic and Diluted | $      | (0.15      | )      |   | $      | (0.68      | )      |   | $      | (4.68 | ) |
|                                          |   |       |   |   |   |       |   |   |   |   |   |
| Silver Produced (oz)                          |   | 2,389,808  |   |   |   | 2,652,026  |   |   |   | 1,206,603 |   |
| Zinc Produced (lbs)                           |   | 10,488,773 |   |   |   | 11,647,962 |   |   |   | 12,625,526 |   |
| Lead Produced (lbs)                           |   | 29,067,673 |   |   |   | 22,905,826 |   |   |   | 6,489,087 |   |
| Copper Produced (lbs)                         |   | 1,058,250  |   |   |   | 2,054,896  |   |   |   | 1,197,934 |   |
| Cost of Sales/Ag Eq Oz Produced ($/oz)        | $      | 9.86       |   |   | $      | 10.80      |   |   | $      | 11.55 |   |
| Cash Cost/Ag Oz Produced ($/oz)2              | $      | 10.00      |   |   | $      | 12.75      |   |   | $      | 11.31 |   |
| All-In Sustaining Cost/Ag Oz Produced ($/oz)2 | $      | 12.71      |   |   | $      | 17.16      |   |   | $      | 22.68 |   |
|                                          |   |       |   |   |   |       |   |   |   |   |   |
| Cash ($ M)                                    | $      | 24.1       |   |   | $      | 1.3        |   |   | $      | 15.2 |   |
| Receivables ($ M)                             |   | 4.0        |   |   |   | 4.5        |   |   |   | 6.8 |   |
| Inventories ($ M)                             |   | 6.6        |   |   |   | 8.8        |   |   |   | 12.4 |   |
|                                          |   |       |   |   |   |       |   |   |   |   |   |
| Property, Plant and Equipment ($ M)           | $      | 80.5       |   |   | $      | 80.9       |   |   | $      | 81.3 |   |
|                                          |   |       |   |   |   |       |   |   |   |   |   |
| Current Assets ($ M)                          | $      | 36.6       |   |   | $      | 15.8       |   |   | $      | 36.9 |   |
| Current Liabilities ($ M)                     |   | 16.5       |   |   |   | 10.3       |   |   |   | 15.8 |   |
| Working Capital ($ M)                         |   | 20.1       |   |   |   | 5.5        |   |   |   | 21.1 |   |
|                                          |   |       |   |   |   |       |   |   |   |   |   |
| Total Assets ($ M)                            | $      | 117.3      |   |   | $      | 96.9       |   |   | $      | 118.6 |   |
| Total Liabilities ($ M)                       |   | 30.1       |   |   |   | 32.0       |   |   |   | 33.2 |   |
| Total Equity ($ M)                            |   | 87.2       |   |   |   | 64.9       |   |   |   | 85.4 |   |

|  | 1 | Production from Galena Complex operations included since December 23, 2014. |
|--|---|-----------------------------------------------------------------------------|

|  | 2 | Refer to “Non-IFRS Measures: Cash Cost per Ounce and All-In Sustaining Cost per Ounce” section in this MD&A. |
|--|---|------------------------------------------------------------------------------------------------------------------------------|

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|                                               |   | Q4        |   |   | Q3        |   |   | Q2        |   |   | Q1        |   |   | Q4        |   |   | Q3        |   |   | Q2        |   |   | Q1        |   |
|-----------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
|                                          |   | 2016      |   |   | 2016      |   |   | 2016      |   |   | 2016      |   |   | 2015      |   |   | 2015      |   |   | 2015      |   |   | 2015      |   |
| Revenues ($ M)                                | $      | 14.4      |   | $      | 16.8      |   | $      | 12.8      |   | $      | 14.9      |   | $      | 11.5      |   | $      | 12.8      |   | $      | 15.3      |   | $      | 13.9      |   |
| Net Income (Loss) ($ M)                       |   | (2.4      | )      |   | 1.0       |   |   | (2.1      | )      |   | (1.7      | )      |   | (7.2      | )      |   | (4.8      | )      |   | (1.5      | )      |   | (5.9      | )      |
| Comprehensive Income (Loss) ($ M)             |   | (1.0      | )      |   | 0.8       |   |   | (2.5      | )      |   | (2.0      | )      |   | (11.5     | )      |   | (4.5      | )      |   | (1.6      | )      |   | (6.1      | )      |
|                                          |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |
| Silver Produced (oz)                          |   | 564,475   |   |   | 596,855   |   |   | 556,404   |   |   | 672,074   |   |   | 599,677   |   |   | 682,715   |   |   | 661,393   |   |   | 708,241   |   |
| Zinc Produced (lbs)                           |   | 2,671,391 |   |   | 2,183,814 |   |   | 2,081,046 |   |   | 3,552,522 |   |   | 3,075,468 |   |   | 2,626,541 |   |   | 2,692,214 |   |   | 3,253,739 |   |
| Lead Produced (lbs)                           |   | 7,277,346 |   |   | 7,991,507 |   |   | 6,677,247 |   |   | 7,121,573 |   |   | 7,067,802 |   |   | 6,572,325 |   |   | 4,618,754 |   |   | 4,646,945 |   |
| Copper Produced (lbs)                         |   | 260,018   |   |   | 326,639   |   |   | 225,785   |   |   | 245,808   |   |   | 321,616   |   |   | 546,666   |   |   | 541,691   |   |   | 644,923   |   |
| Cost of Sales/Ag Eq Oz Produced ($/oz)        | $      | 10.47     |   | $      | 9.49      |   | $      | 10.13     |   | $      | 9.43      |   | $      | 11.11     |   | $      | 10.76     |   | $      | 10.93     |   | $      | 10.44     |   |
| Cash Cost/Ag Oz Produced ($/oz)1              | $      | 8.91      |   | $      | 10.00     |   | $      | 11.33     |   | $      | 9.80      |   | $      | 14.38     |   | $      | 12.01     |   | $      | 12.35     |   | $      | 12.46     |   |
| All-In Sustaining Cost/Ag Oz Produced ($/oz)1 | $      | 11.57     |   | $      | 12.86     |   | $      | 14.57     |   | $      | 12.00     |   | $      | 18.45     |   | $      | 16.47     |   | $      | 16.70     |   | $      | 17.15     |   |
|                                          |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |
| Current Assets (qtr. end) ($ M)               | $      | 36.6      |   | $      | 41.1      |   | $      | 38.9      |   | $      | 17.9      |   | $      | 15.8      |   | $      | 19.3      |   | $      | 23.5      |   | $      | 26.9      |   |
| Current Liabilities (qtr. end) ($ M)          |   | 16.5      |   |   | 13.1      |   |   | 20.8      |   |   | 12.5      |   |   | 10.3      |   |   | 8.3       |   |   | 8.2       |   |   | 12.6      |   |
| Working Capital (qtr. end) ($ M)              |   | 20.1      |   |   | 28.0      |   |   | 18.1      |   |   | 5.4       |   |   | 5.5       |   |   | 11.0      |   |   | 15.3      |   |   | 14.3      |   |
|                                          |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |   |      |   |
| Total Assets (qtr. end) ($ M)                 | $      | 117.3     |   | $      | 120.4     |   | $      | 119.3     |   | $      | 98.3      |   | $      | 96.9      |   | $      | 102.0     |   | $      | 105.6     |   | $      | 108.2     |   |
| Total Liabilities (qtr. end) ($ M)            |   | 30.1      |   |   | 32.4      |   |   | 41.4      |   |   | 33.6      |   |   | 32.0      |   |   | 25.8      |   |   | 26.4      |   |   | 28.7      |   |
| Total Equity (qtr. end) ($ M)                 |   | 87.2      |   |   | 88.0      |   |   | 77.9      |   |   | 64.7      |   |   | 64.9      |   |   | 76.2      |   |   | 79.2      |   |   | 79.5      |   |

|  | 1 | Refer to “Non-IFRS Measures: Cash Cost per Ounce and All-In Sustaining Cost per Ounce” section in this MD&A. |
|--|---|------------------------------------------------------------------------------------------------------------------------------|

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| Opening cash as at December 31, 2015               |   | $      | 1.3  |   |
|----------------------------------------------------|--------|--------|------|--------|
| Cash generated from operations                     |   |   | 5.4  |   |
| Capital expenditures                               |   |   | (8.0 | )      |
| Care and maintenance costs                         |   |   | (0.4 | )      |
| Restructuring costs                                |   |   | (0.5 | )      |
| Proceeds from private placements                   |   |   | 23.8 |   |
| Proceeds from credit facilities                    |   |   | 2.9  |   |
| Proceeds from sale of investments                  |   |   | 0.1  |   |
| Proceeds from exercise of options and warrants     |   |   | 2.0  |   |
| Payments on credit facilities                      |   |   | (2.3 | )      |
| Decrease in receivables due to timing of shipments |   |   | 0.5  |   |
| Change in inventories during the year              |   |   | 2.2  |   |
| Increase in prepaid expenses during the year       |   |   | (0.6 | )      |
| Decrease in payables during the year          |   |   | (2.3 | )      |
| Closing cash as at December 31, 2016               |   | $      | 24.1 |   |

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|                          |   |      |   |   | Less than |   |   |      |   |   |      |   |   | Over 5 |   |
|-------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|--------|--------|--------|
|                          |   | **Total** |   |   | 1 year    |   |   | 2-3 years |   |   | 4-5 years |   |   | years  |   |
| Trade and other payables      |   | $         | 8,727  |   |      | $      | 8,727  |      |   | $      | -         |   |   | $      | -      |   |   | $ | - |   |
| Credit facilities             |   |      | 7,931  |   |      |   | 7,931  |      |   |   | -         |   |   |   | -      |   |   |   | - |   |
| Interest on credit facilities |   |      | 545    |   |      |   | 545    |      |   |   | -         |   |   |   | -      |   |   |   | - |   |
| Leases                        |   |      | 1,763  |   |      |   | 352    |      |   |   | 621       |   |   |   | 499    |   |   |   | 291 |   |
| Other long-term liabilities   |   |      | 882    |   |      |   | -      |      |   |   | 108       |   |   |   | -      |   |   |   | 774 |   |
| Total                         |   | $         | 19,848 |   |      | $      | 17,555 |      |   | $      | 729       |   |   | $      | 499    |   |   | $ | 1,065 |   |

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| · | New 7.5% mining royalty. This royalty is deductible for tax purposes and is calculated as 7.5% of a royalty base which is computed as taxable revenues (except interest and inflationary adjustments), less allowable deductions for income tax purposes (except interest, inflationary adjustment, depreciation and mining fees), less prospecting and exploration expenses for the year; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | New environmental duty of 0.5% of gross income arising from the sale of gold and silver; |
|--------|------------------------------------------------------------------------------------------|

| · | Corporate income tax rate to remain at 30%, eliminating the scheduled reduction to 29% in 2014 and to 28% in 2015; |
|--------|--------------------------------------------------------------------------------------------------------------------|

| · | Elimination of the IETU; |
|--------|--------------------------|

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| · | Elimination of the option for depreciation of capital assets on an accelerated basis; |
|--------|---------------------------------------------------------------------------------------|

| · | Elimination of 100% deduction on exploration expenses for locating and quantifying new deposits in pre-operating periods. These exploration costs will be amortized on a straight-line basis over 10 years; and |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Reduction of deductibility for various employee fringe benefits; and imposes a 10% withholding tax on dividends distributed to resident individuals or foreign residents (including foreign corporations). According to the Mexico-Canada tax treaty, this dividend withholding tax rate may be reduced to 5%. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| • | a significant deterioration in expected future commodity prices; |
|---------|------------------------------------------------------------------|

| • | a significant adverse movement in foreign exchange rates; |
|---------|-----------------------------------------------------------|

| • | a significant increase in production costs; |
|---------|---------------------------------------------|

| • | a large cost overrun during the development and construction of a new mine; |
|---------|-----------------------------------------------------------------------------|

| • | a significant increase in the expected cost of dismantling assets and restoring the site; |
|---------|-------------------------------------------------------------------------------------------|

| • | a significant reduction in the mineral content of ore reserves/resources; |
|---------|---------------------------------------------------------------------------|

| • | serious mine accidents; |
|---------|-------------------------|

| • | a significant increase in market interest rates; and |
|---------|------------------------------------------------------|

| • | adverse changes in government regulations and environmental law, including a significant increase in the taxes payable by the mine. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------|

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|                                           |   | 2016   |      |   | 2015   |   |
|------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Cost of sales ('000)                           |   | $      | 46,167    |   |   | $      | 52,574 |   |
| Less non-cash costs ('000)1                    |   |   | (1,707    | )      |   |   | (3,017 | ) |
| Direct mining costs ('000)                     |   | $      | 44,460    |   |   | $      | 49,557 |   |
| Smelting, refining and royalty expenses ('000) |   |   | 13,472    |   |   |   | 14,779 |   |
| Less by-product credits ('000)                 |   |   | (34,045   | )      |   |   | (30,522 | ) |
| Total cash costs ('000)                        |   | $      | 23,887    |   |   | $      | 33,814 |   |
| Divided by silver produced (oz)                |   |   | 2,389,808 |   |   |   | 2,652,026 |   |
| Silver cash costs ($/oz)                       |   | $      | 10.00     |   |   | $      | 12.75 |   |
|                                           |   | 2016   |      |   | 2015   |   |
|------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Cost of sales ('000)                           |   | $      | 17,701    |   |   | $      | 22,212 |   |
| Less non-cash costs ('000)1                    |   |   | (1,649    | )      |   |   | (2,031 | ) |
| Direct mining costs ('000)                     |   | $      | 16,052    |   |   | $      | 20,181 |   |
| Smelting, refining and royalty expenses ('000) |   |   | 5,502     |   |   |   | 8,817 |   |
| Less by-product credits ('000)                 |   |   | (13,712   | )      |   |   | (16,442 | ) |
| Total cash costs ('000)                        |   | $      | 7,842     |   |   | $      | 12,556 |   |
| Divided by silver produced (oz)                |   |   | 1,006,119 |   |   |   | 1,162,290 |   |
| Silver cash costs ($/oz)                       |   | $      | 7.79      |   |   | $      | 10.80 |   |
|                                           |   | 2016   |      |   | 2015   |   |
|------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Cost of sales ('000)                           |   | $      | 28,466    |   |   | $      | 30,362 |   |
| Less non-cash costs ('000)1                    |   |   | (58       | )      |   |   | (986 | ) |
| Direct mining costs ('000)                     |   | $      | 28,408    |   |   | $      | 29,376 |   |
| Smelting, refining and royalty expenses ('000) |   |   | 7,970     |   |   |   | 5,962 |   |
| Less by-product credits ('000)                 |   |   | (20,333   | )      |   |   | (14,080 | ) |
| Total cash costs ('000)                        |   | $      | 16,045    |   |   | $      | 21,258 |   |
| Divided by silver produced (oz)                |   |   | 1,383,689 |   |   |   | 1,489,736 |   |
| Silver cash costs ($/oz)                       |   | $      | 11.60     |   |   | $      | 14.27 |   |

----

----

|                                  |   | 2016   |      |   | 2015   |   |
|---------------------------------------|--------|--------|-----------|--------|--------|--------|
| Total cash costs ('000)               |   | $      | 23,887    |   |   | $      | 33,814 |   |
| Capital expenditures ('000)           |   |   | 4,870     |   |   |   | 10,350 |   |
| Exploration costs ('000)              |   |   | 1,616     |   |   |   | 1,335 |   |
| Total all-in sustaining costs ('000)  |   | $      | 30,373    |   |   | $      | 45,499 |   |
| Divided by silver produced (oz)       |   |   | 2,389,808 |   |   |   | 2,652,026 |   |
| Silver all-in sustaining costs ($/oz) |   | $      | 12.71     |   |   | $      | 17.16 |   |
|                                  |   | 2016   |      |   | 2015   |   |
|---------------------------------------|--------|--------|-----------|--------|--------|--------|
| Total cash costs ('000)               |   | $      | 7,842     |   |   | $      | 12,556 |   |
| Capital expenditures ('000)           |   |   | 831       |   |   |   | 4,170 |   |
| Exploration costs ('000)              |   |   | 690       |   |   |   | 581 |   |
| Total all-in sustaining costs ('000)  |   | $      | 9,363     |   |   | $      | 17,307 |   |
| Divided by silver produced (oz)       |   |   | 1,006,119 |   |   |   | 1,162,290 |   |
| Silver all-in sustaining costs ($/oz) |   | $      | 9.31      |   |   | $      | 14.89 |   |
|                                  |   | 2016   |      |   | 2015   |   |
|---------------------------------------|--------|--------|-----------|--------|--------|--------|
| Total cash costs ('000)               |   | $      | 16,045    |   |   | $      | 21,258 |   |
| Capital expenditures ('000)           |   |   | 4,039     |   |   |   | 6,180 |   |
| Exploration costs ('000)              |   |   | 926       |   |   |   | 754 |   |
| Total all-in sustaining costs ('000)  |   | $      | 21,010    |   |   | $      | 28,192 |   |
| Divided by silver produced (oz)       |   |   | 1,383,689 |   |   |   | 1,489,736 |   |
| Silver all-in sustaining costs ($/oz) |   | $      | 15.18     |   |   | $      | 18.92 |   |