SSR MINING INC. [SSRM] Filings

UNITED STATES
SECURITIES 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 ended December 31, 2011

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)

Kristen Riddell, 604-689-3846, kriddell@silverstandard.com
604-689-3847, 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.

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.

80,693,432

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):

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

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     [   ] Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[   ] Yes     [X] No

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

Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

[   ] Yes     [   ] No

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TABLE OF CONTENTS

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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 Act of 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 and when 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 and development properties including without limitation, Pitarrilla and San Luis;

• 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;

• risks related to operating in foreign jurisdictions, including government policy and legislation changes affecting our operations, and mining generally in such jurisdictions;

• commodity price fluctuations;

• the ability to monetize the full value of our interest in Pretium Resources Inc. (“Pretium”), including the performance of Pretium’s share price;

• our history of losses;

• recent market events and conditions;

• risks related to general economic conditions;

• risks related to our covenants given with respect to, and the other terms of, our 4.5% convertible senior notes due 2028;

• differences in U.S. and Canadian practices for reporting mineral resources and reserves;

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• 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;

• risks related to the delay in obtaining or failure to obtain or economically obtain required land access agreements and permits, or non-compliance with land access agreements and permits we have obtained;

• risks related to operating in remote regions, including issues with our relationships with local communities;

• 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 the ability to obtain 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; and

• our potential classification as a “passive foreign investment company” under the U.S. Internal Revenue Code.

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.

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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

The non-GAAP financial performance measures presented do not have any standardized meaning prescribed by International Financial Reporting Standards “IFRS” as issued by the International Accounting Standards Board (“IASB”) and are therefore unlikely to be directly comparable to similar measures presented by other issuers.

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Non-GAAP financial performance measures –Cash costs per ounce of silver

The Company uses the non-GAAP measures of direct mining cost, total cash cost and total production cost per ounce of silver to manage and evaluate operating performance. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Company’s performance and ability to generate cash flows. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

This classification is based upon The Silver Institute’s production cost standard as endorsed on June 16, 2011. Previous to this date there was no standardized presentation guidance and the Company reported cash production cost, cash operating cost and total production cost. The Company moved to The Silver Institute’s production cost standard in its disclosures in 2011 in order to facilitate more uniform disclosures within the industry. All comparatives have been updated to reflect the current presentation standard.

For additional information related to these non-GAAP performance measures, please refer to Item 5.A. “Operating Results” – “Non-GAAP Financial Performance Measures”.

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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.

Ag – silver.

Au – gold.

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

claim or concession - 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.

Cu – copper.

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.

diamond drilling - diamond drilling utilizes a type of rotary drill in which the cutting is done by abrasion using diamonds embedded in the drill-bit, with the drill cutting and then recovering cylindrical pieces of bedrock as the drill-bit is forced to depth. Diamond drilling provides a greater degree of information than reverse circulation drilling about the geology of a potential mineral deposit.

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 - is a comprehensive technical and economic study of the selected development option for a mineral project that includes appropriately detailed assessments of realistically assumed mining, processing, metallurgical, economic, marketing, legal, environmental, social and governmental considerations together with any other relevant operational factors and detailed financial analysis, that are necessary to demonstrate at the time of reporting that extraction is reasonably justified (economically mineable). The results of the study may reasonably serve as the basis for a final decision by a proponent or financial institution to proceed with, or finance, the development of the project. The confidence level of the study will be higher than that of a Preliminary Feasibility Study. This definition is from the Canadian Institute of Mining, Metallurgy and Petroleum Standards on Mineral Resources and Mineral Reserves adopted on November 27, 2010.

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.

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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.

ha/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 November 27, 2010.

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 November 27, 2010.

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 November 27, 2010.

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 November 27, 2010.

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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 November 27, 2010.

mineralization - usually implies minerals of value occurring in rocks.

Mn – Manganese.

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.

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.

oz/ton – troy ounces per ton.

Pb – lead.

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

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 a range of options for the technical and economic viability of a mineral project that has advanced to a stage where a preferred mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, is established and an effective method of mineral processing is determined. It includes a financial analysis based on reasonable assumptions of mining, processing, metallurgical, economic, marketing, legal, environmental, social, and governmental considerations 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 November 27, 2010.

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 November 27, 2010.

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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 November 27, 2010.

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. This definition is from the Canadian Institute of Mining, Metallurgy and Petroleum Standards on Mineral Resources and Mineral Reserves adopted on November 27, 2010.

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.

reverse circulation drilling - reverse circulation drilling utilizes a rotary percussion drill in which the drilling mud and rock cuttings return to the surface through the drill pipe.

SEDAR – the System for Electronic Document Analysis and Retrieval which can be accessed at www.sedar.com.

sedimentary - a rock formed from cemented or compacted sediments.

sediment - a composition of 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.

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.

short ton – two thousand pounds.

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.

tonne – metric tonne.

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

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ton – A unit of measure, principally as a unit of weight. A ton in the United Kingdom (‘long ton’) is defined as 2,240 pounds (1,016 kg). A ton in Canada and the USA (‘short ton’) is defined as being 2,000 pounds (907 kg). A ton is different to a metric tonne (see glossary).

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.

Zn – zinc.

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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.

The selected financial data for the years ended December 31, 2011 and 2010 is presented in Table No. 1 and in the financial statements in accordance with IFRS. The Company’s transition date to IFRS was January 1, 2010. The financial data for dates and periods prior to January 1, 2010 have not been restated and have been prepared under Canadian generally accepted accounting principles (“GAAP”). Reference is made to note 26 to the Company’s consolidated financial statements for a description of the transition from Canadian GAAP to IFRS.

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Table No. 1
Selected Financial Data
(expressed in thousands of U.S. dollars, except per share and number of shares data)

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.

Table No. 2 below sets out the rate of exchange for the Canadian dollar at December 31, 2011, December 31, 2010, December 31, 2009, December 31, 2008 and December 31, 2007, the average rates for each period, and the range of high and low rates for each period. Table No. 3 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. 2 means the average of the exchange rates on the last day of each month during the period.

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On March 28, 2012, 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$0.9979.

          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 (including change to the taxation regime) or regulations (including import restriction for equipment and material required for operations at the mine) 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.

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The Pirquitas Mine is currently our only mineral property in production and we may be exposed to future development risk

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;
• securing long-term access agreements required to develop and operate a mine;
• 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 any of our mineral properties.

We have limited revenue from operations.

We transitioned recently from exploration and development to production, generating initial revenue from operations in 2010. Other than the Pirquitas Mine, which achieved commercial production on December 1, 2009, all of our properties are in the exploration or development 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 become 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 acquire additional properties.

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;

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• the geological structures and formations of the deposit and host rock;

• 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 fully develop our mineral properties or to complete further exploration and development programs.

The Company has a strengthened balance sheet following the sale of the Snowfield and Brucejack properties in 2010. However current operating cash flows are not sufficient to finance all our exploration programs, development of our mineral properties and corporate costs. In the future, our ability to continue our production, development and exploration activities, if any, will depend on our ability to generate sufficient operating cash flows from the Pirquitas Mine and obtain additional external financing where necessary. Any unexpected costs, problems or delays at the Pirquitas Mine could severely impact our ability to generate sufficient cash flows and require greater reliance on alternative sources of financing.

In addition, under the terms of the indenture governing our 4.5% Convertible Senior Notes due 2028, the holders of such notes may at their option require us to repurchase the outstanding principal thereunder on March 1, 2013. If the noteholders make such request, our liquidity may be negatively impacted.

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 depends, 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.

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.

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We have a history of losses.

Although we had income from mine operations of $51.9 million and $14.1 million for the years ended December 31, 2011 and 2010, respectively, we still incurred underlying net losses after adjustments for non-operating items. As the Pirquitas Mine has been in commercial production since December 2009, we anticipate continuing to generate income from mine operations for the foreseeable future.

We expect the Pirquitas Mine to generate sufficient cash flows to fund continuing operations, however we may continue incurring losses or generating insufficient cash flows, such that the exploration and development of our other mineral properties will require 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 of operating losses, the execution of any strategic agreements with third parties and our acquisition of additional property interests, many of which are beyond our control. We cannot provide assurance that we will ever achieve profitability.

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, have been and continue to be 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 confidence and liquidity. A continued or worsened slowdown in the financial markets or other economic conditions, including but not limited to, sovereign debt and government solvency conditions, 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, and conversely, inflationary pressures would impact our production costs;

• 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.

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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, this would place additional strain on our cash resources, which could inhibit our ability to further our exploration and development activities.

Recoverability of the investment in Pretium

Following the sale of the Snowfield and Brucejack properties to Pretium, we retained a significant continuing ownership interest, currently approximately 27% as at the date of this Annual Report. We will significantly rely on the performance of Pretium, the market performance of Pretium’s common shares and the liquidity of the market for those shares, in realizing the full value. 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 mineral resources which allow for more disclosure than is permitted for U.S. reporting companies.

Our resource estimates are not directly comparable to those made by U.S. domestic companies 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 by U.S. domestic companies 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 Mineral 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. Accordingly, information concerning descriptions of mineralization and resources contained in this Annual Report, 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 mineral reserve and mineral 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 mineral reserve and mineral 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.

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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;

• community relations problems;

• 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.

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 and development 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;

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• the management of natural resources;

• the exploration of mineral properties;

• exports;

• insurance restrictions;

• import restrictions;

• exchange controls;

• price controls;

• taxation and mining royalties;

• labor standards and occupational health and safety, including mine safety;

• anti-corruption and anti-bribery statutes; 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.

The Company is subject to anti-corruption laws.

The Company is subject to Canadian anti-corruption laws and the U.S. Foreign Corrupt Practices Act, which generally prohibit companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices may occur from time-to-time in Argentina, Peru and Mexico, and there can be no assurance that our employees or other agents will not engage in such prohibited conduct for which we might be held responsible. If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results of operations.

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.

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

The Company’s activities are subject to extensive laws and regulations governing environmental protection which are complex and have tended to become more stringent over time. The Company is required to obtain governmental permits and in some instances provide bonding requirements under federal, state, or provincial air, water quality, and mine reclamation rules and permits. Although the Company makes provisions for reclamation costs, it cannot be assured that these provisions will be adequate to discharge its future obligations for these costs. Failure to comply with applicable environmental laws may result in injunctions, damages, suspension or revocation of permits and imposition of penalties. While responsible environmental stewardship is one of the Company’s top priorities, there can be no assurance that the Company has been or will be at all times in complete compliance with such laws, regulations and permits, or that the costs of complying with current and future environmental laws and permits will not materially and adversely affect the Company’s business, results of operations or financial condition. 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 Pitarrilla and San Luis Project. 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.

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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 or economically 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 us not being compensated for our prior expenditures relating to the property.

In addition, certain of our properties are located in areas that were and are inhabited by indigenous people. If historical artifacts or archaeological sites are discovered on or near our properties, we may be prohibited or restricted from developing or mining our mineral properties or be required to relocate or preserve such findings.

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 and zinc concentrates being 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.

The Company currently conducts operations in Argentina, and has exploration projects in Mexico, Peru, Argentina, Chile, Canada and the United States, and as such the Company is exposed to various levels of economic, political and other risks and uncertainties. These risks and uncertainties vary from country to country and include, but are not limited to, royalties and tax increases or claims by governmental bodies, expropriation or nationalization, foreign exchange controls, import and export regulations, cancellation or renegotiation of contracts, changing fiscal regimes and uncertain regulatory environments, fluctuations in currency exchange rates, high rates of inflation, changes in royalty and tax regimes, including the elimination of tax exemptions, underdeveloped industrial and economic infrastructure, unenforceability of contractual rights and judgements and environmental permitting regulations. The occurrence of these various factors and uncertainties cannot be accurately predicted and could have a material adverse effect on the Company’s operations or profitability.

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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 mineral reserves, mineral 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 mineral 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 mineral 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. dollars, Canadian dollars and Argentine Pesos. Our revenues are all in U.S. dollars, while certain of our costs will be incurred in other currencies. In particular, any appreciation in the currencies of Argentina, 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 Argentine Pesos have increased over past levels, and we therefore have greater exposure to Argentine 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. Expatriate employees are currently required in the early stages of the Pitarrilla Project. 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 serves as a director of Pretium, and, as of the date of this Annual Report, we own approximately 27% 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 six 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 monitor 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.

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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”.

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

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.

          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 Act and 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.

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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 Kristen Riddell, Vice President, Corporate Secretary and General Counsel. The telephone number is (604) 689-3846; the facsimile number is (604) 689-3847.

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

On June 30, 2011, we entered into a share and asset purchase agreement with Esperanza Resources Corp. (“Esperanza”) pursuant to which we purchased all of Esperanza’s remaining interest in the San Luis Project. We now own 100% of the San Luis Project, subject to a 1% net smelter returns royalty payable to Esperanza. See Item 4.B – “Business Overview – Mineral Projects – San Luis Project”.

On April 8, 2011, the Company completed a secondary offering of 11.5 million units at a price of C$10.00 per unit for gross proceeds of C$115 million of Pretium. Each unit consisted of one common share of Pretium owned by Silver Standard and one-half of one common share purchase warrant of Pretium, with each whole warrant exercisable to purchase one common share of Pretium owned by the Company at a price of C$12.50 per share for a period of 12 months following the closing.

On August 1, 2011 we entered into a share purchase agreement with Kingsgate Consolidated Limited (“Kingsgate”) and Silver Standard Australia (BVI) Inc., pursuant to which we sold to Kingsgate all of our interest in the Bowdens Property, located in Australia, in consideration of Kingsgate paying to us A$35,000,000 in cash, issuing to us 3,440,367 common shares of Kingsgate with an aggregate value of A$30,000,000, and making two deferred cash payments of A$5,000,000 each, the first due on December 31, 2011 (received) and the second due on June 30, 2012. See Item 4.B. “Business Overview - Mineral Properties – Bowdens Project”.

On November 9, 2011 the Company announced a lowered mineral reserve and resources estimate for its Pirquitas Mine. See Item 4.D – “Property, Plant and Equipment – Operating Mine – Pirquitas Project”

The information contained in this Annual Report is current as at December 31, 2011, other than where a different date is specified.

          B.        Business Overview

We are a silver resource and producing company that has one producing mine and a portfolio of silver dominant projects. Certain of our projects also contain significant gold resources. Our properties are located in Argentina, Canada, Chile, Mexico, Peru and the United States. We continue to explore for, and acquire, if warranted, silver properties throughout the world. We are also focused on operating and producing silver from our Pirquitas Mine, and on advancing our other mineral projects and project pipeline. 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”.

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In addition to the Pirquitas Mine located in the Province of Jujuy, Argentina, we have 100% interests in several mineral projects, including the more advanced San Luis Project in Ancash Department, Peru; the Pitarrilla and San Agustin Projects in Durango State, Mexico; and the Diablillos Project in Salta Province, Argentina. We also control a large portfolio of mineral properties, with a number of these properties having silver mineral resources identified on them, including the Berenguela Project in Peru; the Nazas Project in Durango State, Mexico; the Challacollo Project in Chile; the San Agustin and Veta Colorada Projects in Mexico; the Candelaria and Maverick Springs Projects in Nevada, U.S.A.; and the Sunrise Lake Project in the Northwest Territories of Canada. Another one of our mineral properties, the San Marcial Property in Mexico, is currently optioned to a third party (as set out in this Item 4.B - “Business Overview - Mineral Properties”). Besides the projects and properties noted above, we have a number of other mineral property holdings at various stages of exploration in Argentina, Canada, Chile, Mexico and the United States. 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 December, 2010, we sold all of our interest in the Snowfield Project and the adjoining Brucejack Project located in northern British Columbia, Canada to Pretium. In addition to receiving C$228 million in gross cash proceeds, we retained a 42.3% equity interest in Pretium. On April 8, 2011 we sold 11.5 million units of Pretium for gross cash proceeds of C$115 million, thus reducing our equity interest in Pretium to approximately 27% of the company as at the date of this Annual Report. See Item 4.B –“Business Overview – Mineral Projects – Snowfield and Brucejack Projects”.

On June 30, 2011, we entered into a Share and Asset Purchase Agreement with Esperanza, Esperanza Silver Peru S.A.C. and Reliant Ventures S.A.C. (“Reliant Ventures”), as amended July 28, 2011, pursuant to which we purchased all of Esperanza’s interest in the San Luis Project for the following consideration:

• C$17 million cash;

• transferring to Esperanza the 6,459,600 common shares in Esperanza that we owned; and

• a royalty equal to 1% of net smelter returns on future production from the project.

The transaction closed on July 28, 2011, and accordingly, we now own 100% of the San Luis Project subject to the 1% net smelter returns royalty granted to Esperanza on the project. See Item 4.B –“Business Overview – Mineral Projects – San Luis Project”.

On August 1, 2011, we entered into a Share Purchase Agreement with Kingsgate Consolidated Limited (“Kingsgate”) and Silver Standard Australia (BVI) Inc., our wholly owned subsidiary, pursuant to which we agreed to sell to Kingsgate all of the shares of Silver Standard Australia Pty Limited (which holds the Bowdens Project) in consideration of the following:

• A$35,000,000 in cash;

• 3,440,367 of Kingsgate’s common shares, with an aggregate value of A$30,000,000 as of the closing date; and

• two deferred cash payments of A$5,000,000 each, the first due on December 31, 2011 and the second due on June 30, 2012.

The transaction closed on September 23, 2011, and accordingly, we no longer hold any interest in the Bowdens Project. See Item 4.B – “Business Overview – Mineral Properties – Bowdens Project”.

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Marketing

From initial production until the middle of 2011, the Company sold its silver and zinc concentrates to a single trading counterparty. Sales of concentrate to this company amounted to 100% of total metal sales in 2011. 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.

In the second half of 2011, the Company commenced marketing discussions with several third party smelters, refiners, and traders for the sale of its silver and zinc concentrates. The Company has completed various sales contracts in 2012 with various counterparties to diversify its revenue base. 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 are substantially dependent upon the world market price of silver. The Company has no control over the silver price, which can fluctuate widely. Silver traded between US$48.68 and US$26.19 per ounce during 2011 as reported on the London Metal Bulletin.

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, and 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. the remaining 56.6% interest in Sunshine Argentina, Inc. 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, and in 2011 produced 7.1 million ounces of silver.

Fiscal stability agreement and regulatory environment

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 approximately 10% from concentrates for projects with fiscal stability agreements pre-dating 2002. The Company has been advised that the Pirquitas Mine is subject to this export duty despite contrary rights detailed under the 1998 fiscal stability agreement. The legality of the export duty applied to silver concentrates has been challenged and is currently under review by the court in Argentina. In July 2010, the Company filed a claim in the provincial court for repayment of export duties paid on silver concentrates, and for an order to cease payment of the export duty until the matter has been decided by the court. An order was granted effective September 29, 2010 to cease payment of the export duty on silver concentrates pending the decision of the courts, and in April 2011 a government appeal against this order was denied.

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As of December 31, 2011 the Pirquitas Mine has paid $6.6 million in export duties against which it has filed for recovery. In accordance with the order to cease payment the Company has not been paying export duties on silver concentrate but continues to accrue duties in full until the outcome of the claim is known with certainty. At December 31, 2011, the Company had accrued a liability totaling $13.1 million, with a corresponding impact on cost of sales in the relevant period. If this export duty is successfully overturned the full amount of paid and unpaid duty will be recognized in the Consolidated Statement of Income in the period recovery becomes virtually certain.

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,

• 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%.

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On June 30, 2011, we entered into a Share and Asset Purchase Agreement with Esperanza, Esperanza Silver Peru S.A.C. and Reliant Ventures S.A.C. (“Reliant Ventures”), as amended July 28, 2011, pursuant to which we purchased all of Esperanza’s interest in the San Luis Project for the following consideration:

• C$17 million cash;

• transferring to Esperanza the 6,459,600 common shares in Esperanza that we owned; and

• a royalty equal to 1% of net smelter returns on future production from the project.

The transaction closed on July 28, 2011, and accordingly, we now own 100% of the San Luis Project subject to the 1% net smelter returns royalty granted to Esperanza on the project.

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 and 2005 we acquired two adjoining claims, the Pena and Pena 1 claims, on payment of $300,000 along with 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;

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• $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.

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 Explorations Inc. (“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:

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

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.

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

Snowfield and Brucejack Projects

On December 21, 2010, we completed the sale of our 100% interest in the Snowfield and Brucejack Projects located in northern British Columbia, Canada to 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

• 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% .

On April 8, 2011, the Company completed a secondary offering of 11.5 million units at a price of C$10.00 per unit for gross proceeds of C$115 million of Pretium. Each unit consisted of one common share of Pretium owned by Silver Standard and one-half of one common share purchase warrant of Pretium, with each whole warrant exerciseable to purchase one common share of Pretium owned by the Company at a price of C$12.50 per share for a period of 12 months following the closing. As of the date of this Annual Report we now own approximately 27% of Pretium’s issued and outstanding shares.

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 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:

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• $0.02 per ounce if the price of silver was less than or equal to $5.50 per ounce;

• $0.025 per ounce 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 per ounce 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.

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:

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.

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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.

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 Nazas and Nazas 5) were held 100% by Camino, while 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 were 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 Nazas and Nazas 3 claims in good standing. If we fail to maintain the Nazas and Nazas 3 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 Nazas and Nazas 3 concessions, 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 pre-production payment and the 2% net smelter returns royalty from LCI Mexico for $2,000,000.

We own 100% of the two concessions (the San Rafael and San Rafael 2 claims) 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.

On April 26, 2010, we entered into an option to purchase agreement with Minerales y Productos Metalurgicos S.A. de C.V (“MPM”) in respect of the 25 mineral concessions comprising the Navidad property. Pursuant to this agreement, we held the right to 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 were all payments to various governmental agencies in Mexico for maintenance of the concession licenses. In addition, MPM retained the right to mine any and all mineral bodies in which the industrial mineral fluorite constitutes greater than 90% of the potential ore. We reserved the option to purchase MPM’s right to mine fluorite from the Navidad property for $1,000,000.

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Immediately upon the completion of a 20 borehole diamond drilling program on the Navidad Property in October 2011, we decided to terminate the option to purchase agreement with MPM. In terminating the option to purchase the property, we considered the results of the exploration work that we completed on the property as well as the costs of maintaining the option into 2012. Cash payments that were made to MPM during the time the option agreement was in effect amounted to approximately $450,000.

Currently, our Nazas Project comprises the Yerbabuena and San Rafael properties, which we control 100%, subject to the following:

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

• The pre-production payments and 0.25% net smelter returns royalty on the San Rafael and San Rafael 2 claims payable to LCI, which we may purchase at any time for $2,000,000.

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 (including a 5% finder’s fee) totaling $1,500,000 over two years.

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

The project is subject to an existing 2% production royalty capped at $850,000 and a 2% production royalty to Minera Septentrion which increases to 3% once the existing two percent 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 $850,000 cap on the above royalty is fully paid, and 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, we issued to Kinross of 50,000 our common shares so that we could carry out a six month due diligence review of the Candelaria Mine Project (the “option period”).

In order to exercise the option at the end of the six-month option period, we were required to:

• make staged cash payments to Kinross totalling C$300,000 over a period of 12 months;

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• 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.

On March 28, 2000, we entered into an amending agreement with Kinross, under which Kinross agreed to extend the term of the option period 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 period was further extended, without payment of any further consideration, to March 31, 2001. On March 30, 2001, we delivered the notice of exercise of the option to Kinross. 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).

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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.

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

Pursuant to 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 1^st thereafter (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:

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• 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

• 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”) (which later became 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

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• 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 A$5,000,000 in royalties.

On August 1, 2011, we entered into a Share Purchase Agreement with Kingsgate Consolidated Limited (“Kingsgate”) and Silver Standard Australia (BVI) Inc., our wholly owned subsidiary, pursuant to which we agreed to sell to Kingsgate all of the shares of Silver Standard Australia Pty Limited (formerly GSM Exploration) in consideration of the following:

• A$35,000,000 in cash (received);

• 3,440,367 of Kingsgate’s common shares, with an aggregate value of A$30,000,000 as of the closing date (received); and

• two deferred cash payments of A$5,000,000 each, the first due on December 31, 2011 (received) and the second due on June 30, 2012.

The transaction closed on September 23, 2011, and accordingly, we no longer hold any interest in the Bowdens Project.

Sunrise Lake Project

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 Project 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 mineral claims that constitute the Sunrise Lake Project are subject to a 5% net profits interest royalty.

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

Veta Colorada Project

On July 27, 2005, we entered into agreements with Mexicana del Arco, S.A. de C.V. (“Arco”) and Industrial Minera Mexico, S.A. de C.V. (“IMMSA”) to acquire a 100% interest in the Veta Colorada Project located in the Parral mining district of Chihuahua State, Mexico. Under the purchase agreements, we agreed to pay $50,000 on signing the agreements (paid) 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.

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In March 2006, we advised Arco and IMMSA that we had completed our due diligence of the Veta Colorada Project and were ready to complete the acquisition of the project. In June of 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:

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

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• 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, to maintain the option in good standing, Silvermex is required to:

On August 4, 2010, and October 1, 2010, we entered into amending agreements with Silvermex to amend the terms of the option agreement. Under the terms of the amended option agreement, Silvermex is required to:

• issue to us the remaining 1,000,000 shares of Silvermex that are issuable under the original option agreement on or before February 1, 2011 (not issued);

• pay to us $6 million in cash or in Silvermex shares, at our election (not received); and

• grant to us at the time the balance of the purchase price is payable a royalty equal to 1% of net smelter returns from the San Marcial property up to a maximum of $9 million less the value of the 3,000,000 Silvermex shares (not granted).

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 with Silvermex to renegotiate the terms of the option agreement.

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

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• the option granted to Silvermex to acquire the property described above.

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 that constitute 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.

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, along with a 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 until 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 us 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, our reclamation work program was completed at a cost of $15,800. 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 of ongoing environmental monitoring.

Silver Standard Mine Property

We acquired the Silver Standard Mine Property in 1947, placed a silver mine in production in 1948 and operated the 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 prepared a conceptual reclamation plan with possible alternatives for 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 of 2010. In 2011, approximately $529,300 in expenditures for reclamation work were incurred.

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During the years 2006 to 2011, we spent $698,400 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, 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 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:

Table No. 4
Significant Subsidiaries

          D.        Property, Plant and Equipment

Operating Mine

The Company’s property, plant and equipment primarily comprises capitalized exploration and development expenses at its various mineral projects, and the assets at its Pirquitas operating mine.

Pirquitas Project

Location, Access and Infrastructure

Our 100% owned Pirquitas Project consists of an open-pit mine and processing plant that is exploiting a primary silver deposit situated in the Puna de Atacama in the Province of Jujuy of northwestern Argentina. The project is held by our wholly-owned subsidiary, Mina Pirquitas, Inc. (formerly known as Sunshine Argentina, Inc.), and is located approximately 355 kilometers northwest of the city of San Salvador de Jujuy. Access to the site is by public paved and gravel roads. The terrain surrounding the mine is mountainous, with elevations ranging from 4,100 to 4,400 meters above sea level. There are no nearby electrical power or telecommunication lines; however, the Trans Andean natural gas pipeline is located approximately 36 kilometers to the south of the project and a spur gas line was constructed to the site. A power plant was constructed at the site that provides all power required for the mine and processing plant. See the following Pirquitas Project, Location Map.

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A water diversion was constructed at the San Marcos River, about 7 km from the plant and the site has water rights to 31 liters per second. A camp site was constructed and is fully operational. Communications systems were constructed and the mine is equipped with phone and internet service.

Land Tenure

The Pirquitas Project consists of 50 semi-contiguous mineral exploration concessions covering a total area of 3,621 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 7,502 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 that has occurred at Pirquitas:

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

1935-1990           The bedrock source of the tin placers was discovered in 1935 and mining of the tin and silver lodes started soon thereafter. Twelve mines operated in the area. Often, mineralization found in one mine would extend into the workings of the adjacent mine, and as a consequence several of the mines eventually became interconnected. The largest operations were the San Miguel, Chocaya, Llallagua, and Potosi mines. Reported total metal 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 surface as well as diamond core drilling from rehabilitated underground workings. A feasibility study was completed for the project by Sunshine Argentina in 2000.

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

2006                     In 2006, we announced the completion of the update to the previous feasibility study along with proven and probable reserves for the Pirquitas Project. We also announced our decision to proceed with the development of the Pirquitas mine. As part of our exploration efforts, we continued with the underground ramp that accessed the Oploca vein mineralization.

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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.

2008-2011           During this period we completed the construction of the Pirquitas mine. The Pirquitas mine achieved production status in December 2009, and produced 6.3 million ounces of silver in 2010. The Pirquitas Mine began zinc shipments in 2011 and produced 10.1 million pounds of zinc and 7.1 million ounces of silver during the year. On November 9, 2011 the Company announced a reduction to the estimated mineral reserve at Pirquitas incorporated into the mine plan, and filed on SEDAR a NI 43-101 Technical Report dated December 23, 2011 titled “NI 43-101 Technical Report on the Pirquitas Mine, Jujuy Province, Argentina”.

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Geology and Mineralization

Northwestern Argentina can be subdivided into three main geological terranes or belts which are oriented with north-northeasterly trends. From east to west, these terranes are referred to as the Sub-Andean Belt, the Eastern Cordillera, and the Puna, where the Pirquitas Project is located. These terranes are distinguished on the basis of their basement lithology, complexes, tectonic histories, magmatism, metallogeny and geomorphologies.

The puna terrane underlies most of the western half of Jujuy Province and is marked by a high-Andean geomorphology consisting of northerly trending mountain ranges separated by broad valleys and salars or salt pans. Elevations range from 3,900 to as high as 6,700 meters above sea level. Paleozoic marine sedimentary formations are the main basement rocks in the puna, with thick deposits of continental clastics existing where sedimentary basins had developed during Mesozoic time subsequent to a major compressional tectonic event that had caused crustal uplift and intense folding during the Early Devonian. By Middle Tertiary time, the tectonic regime of the puna had changed to one of extension, resulting in a basin and range geomorphology being developed. As well, the extensional tectonism resulted in the upwelling of magma and the development of andesitic to dacitic stratovolcanoes and subsequently a number of very large caldera structures from which regionally extensive ignimbrite sheets were erupted. These volcanic edifices and deposits are readily seen in the present landscape surrounding the Pirquitas Project.

In terms of mineral deposit endowment, the puna is by far the most important of the three regional terranes in Jujuy Province. There are four main types of mineral deposits in the puna: mesothermal quartz veins containing gold and minor amounts of base metals; polymetallic quartz veins genetically related to Tertiary volcanic centers; “Bolivian-type” silver-tin sulphide veins of which Pirquitas is the best example; and Quaternary placer deposits of gold and tin.

At Pirquitas, the silver-zinc-tin mineralization is hosted by a folded and fractured succession of interbedded units of marine sandstone, siltstone and minor shale of Ordovician age. The metals of interest occur in a variety of sulphide minerals that were deposited in large fractures to form a number of east-west trending veins that are a few hundreds of meters in length and generally 50 to 200 centimeters wide. Between the larger veins there are irregular networks of sulphide veinlets as well as disseminated sulphide grains in some of the more porous lithologies. The San Miguel open-pit is mainly exploiting a broad zone of sulphide veinlets and disseminations that was defined by drilling immediately south of the historically most productive vein structure, the Potosí Vein. Silver, zinc and tin commonly occur together in mineralized samples, however, their concentrations in the deposit as a whole are not directly co-relatable. Silver in the deposit takes the form of silver sulphide, acanthite, and as a number of silver sulphosalt minerals. Zinc occurs in the sulphides of sphalerite and wurzite, while tin is found mainly in stannite along with a number of other rare sulphide and sulphosalt minerals.

Permitting

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

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 of which 5.9 million ounces were shipped that year. In 2011, we produced 7.1 million ounces of silver and 10.1 million pounds of zinc. Due to lengthy production stoppages caused by mechanical problems that first affected our crushing capacity and then our milling, the total amount of silver produced in 2011 was less than what had been anticipated at the beginning of the year.

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After the repairs to the ball-mill gearbox were completed and full milling capacity was restored in the middle of November, 2011, our silver production has returned to design levels. For 2012, we anticipate that Pirquitas will produce between 8.2 and 8.5 million ounces of silver.

The Pirquitas Mine has total property, plant and equipment with a net book value of $342.8 million, of which $102.2 million, relates to mineral properties i.e. acquisition and capitalized pre-operating costs and plant and equipment of $240.6 million. The plant and equipment comprises the cost for plant construction, mobile equipment and ongoing sustaining capital. See Item 5.A “Operating Results – Pirquitas Mine, Argentina” for a discussion of capital expenditures and additional information on the Pirquitas Mine. Please also refer to the Company’s financial statements for the year ended December 31, 2011.

Reserve Estimates

The following mineral reserve estimates for the Pirquitas Project were prepared by Andrew Sharp, Vice President Technical Services under the supervision of qualified person, Bruce Kennedy, P.Eng., General Manager of the Pirquitas Mine, 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. 5
Silver Standard Resources Inc.
Pirquitas Project
Proven and Probable Reserves as at December 31, 2011^{(1) (2)}

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Cautionary Note to U.S. Investors concerning estimates of Measured Mineral Resources.

Table No. 6 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. 6 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.6 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. 6
Silver Standard Resources Inc.
Pirquitas Project
Mineral Resource Estimate as at December 31, 2011
(Cutoff Grade = 50 g/t Ag⁽¹⁾ )

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Principal Projects

San Luis Project

Location, Access and Infrastructure

The San Luis Project is targeting a newly discovered high-grade gold-silver vein deposit located in the Ancash Department of north-central Peru, approximately 25 kilometers northwest of Barrick Gold Corporation’s Pierina gold mine (see San Luis Project Location Map shown below). Having completed the purchase of Esperanza’s remaining 30% interest in the project in 2011, we now hold a 100% interest in the project. The property lies within the Cordillera Negra mountain range at elevations that range from 3,800 to 4,700 meters above sea level. The project can be accessed by two all-weather roads from the town of Casma on the Pacific Coast and from the town of Huaraz which lies in the valley of Santa River that flows east of the property. Electrical power for our exploration camp is currently generated on-site using diesel generators.

Land Tenure

The San Luis Project consists of 43 mineral concessions covering an area of approximately 35,538 hectares. In order to maintain our rights to these concessions, we are required to pay an annual mining good standing fee in the aggregate of approximately $98,000 in respect of the concessions to the government of Peru.

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History

The veins that are the focus of interest at the San Luis Project were discovered in mid-2005 by an Esperanza field crew carrying out a prospecting program under the evaluation joint venture that existed at the time between Esperanza and Silver Standard. Following the discovery in July 2005, Esperanza, as the operator of the San Luis joint venture completed channel sampling of the Ayelén Vein, one of five veins that were identified in the field at that time. Channel samples were spaced approximately every 25 meters (82 feet) along the strike length of the Ayelén Vein. Based on the results of the channel sampling, a diamond drill program was commenced by Esperanza in late 2006.

On April 1, 2007, we assumed the role of operator for the San Luis Joint Venture and continued with the diamond drill program. From 2006 to 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. In 2011 we signed a land access agreement with the Cochabamba community.

Geology and Mineralization

At the San Luis Project, gold and silver-bearing quartz veins are hosted within Tertiary-age volcanic rocks. Five separate, north-northwesterly trending veins have been identified so far with a cumulative strike length of over 5,000 meters; however, at this time only one of the veins, the Ayelén Vein, hosts an economic deposit of precious metal mineralization. Individual veins range from several hundreds of meters to over 2,000 meters in strike length and are up to 10 meters wide though widths of one to three meters are more common.

The well mineralized Ayelén Vein is typical of quartz-adularia or low-sulfidation epithermal precious metal vein systems. Vein textures such as well-developed banding and multiple brecciation indicate that repeated episodes of quartz deposition occurred, with gold and silver likely being precipitated from the fluids as they ascended towards the paleo-surface and boiled. Modeling of the concentration of precious metals within and along the Ayelén Vein indicates that high-grade mineralization forms subvertically elongated zones commonly referred to as ‘ore shoots’.

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 study to the Peruvian Ministry of Mines and Energy. In December 2011, we executed a long-term, land-use agreement with the Cochabamba community, one of the two local communities. We are in negotiations with the other local community to secure the other required long-term, land-use agreement. We will make a construction decision once we have received approval of the environmental impact assessment and entered into the remaining required land-use agreements.

On February 28, 2011, we entered into a share purchase agreement with Esperanza, our then joint venture partner in the San Luis Project, to purchase all of Esperanza’s remaining interest in the project which closed on July 28, 2011. See Item 4.B – “Business Overview – Mineral Projects – San Luis Project”.

Reserve Estimates

The following mineral reserve estimates for the San Luis Project were prepared by Steve L. Milne, P.E. of Tucson, AZ, and presented 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.

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

Pitarrilla Project

Location, Access and Infrastructure

Our wholly-owned Pitarrilla Project is located in the north-central 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 the small town of San Francisco de Asis or the village of Casas Blancas via the town of El Palmito. The required driving time from the city of Durango is about 4 hours (approximately 260 km by road). See the Pitarrilla Project Location Map shown below.

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 generally greater than 45°C. During the winter months, December through February, day-time temperatures range from 15°C to 25°C, while night-time temperatures are generally in the -5°C to 10°C range. The wettest months are August through October, with most of the annual rainfall of about 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 southeast. Limited supplies are available in San Francisco de Asis and no services are available in Casas Blancas. The company has accommodations, a mess hall and a warehouse in Casas Blancas. Most large items, supplies, assay laboratories and air transportation are available in the cities of Durango and Gomez Palacio-Torreon. Electrical power for the camp facilities is obtained from the existing power grid. Power alternatives for the Pitarrilla Project in connection with the preparation of a Feasibility Study are being evaluated.

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Land Tenure

The Pitarrilla Project is comprised of 12 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 and submit summaries of work programs.

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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, we entered into an agreement with LCI 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 180,200 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. Approximately 1,350 meters of decline were excavated; however 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. A further 83 diamond drill-holes with a total length of approximately 13,900 meters were drilled in 2011.

Geology and Mineralization

The Pitarrilla silver-zinc-lead deposit is characterized by iron oxide- and sulphide-associated mineralization, which together defines 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 (during the Oligocene) and were emplaced into a sequence of somewhat older Eocene volcaniclastic rocks. More than 450 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 silver 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 central 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 Pre-Feasibility study on the economic viability of an underground mining operation on the Pitarrilla Property was prepared by mining consultants Wardrop, A Tetra Tech Company (“Wardrop”) in September of 2009 (the “Preliminary Feasibility Study”). As presented in Wardrop’s Preliminary Feasibility Study, the underground project was to have a 12-year mine life, would mine 4,000 tonnes per day and produce approximately seven million ounces of silver per year. Capital costs were projected at $277 million with average operating costs of $33.81/tonne. Metal 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 would produce two concentrates, a lead concentrate which would contain the bulk of recovered silver and a zinc concentrate. The lead concentrate was expected to average 60.7% lead and contain approximately 8,000 g/t silver. The zinc concentrate was expected to average 48.5% zinc and contain approximately 400 g/t silver.

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In the Preliminary Feasibility Study completed by Wardrop, the capital cost estimate (CAPEX) was determined with an accuracy of ±25% and is suitable for project evaluation and client budgeting. The Pitarrilla Project’s CAPEX consists of four main parts: direct costs, indirect costs, contingency, and owner’s costs. As of April 2009, the CAPEX for the Project was estimated at $277 million. The estimate is subject to qualifications, assumptions, and exclusions, as detailed in the Preliminary Feasibility 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:

Table No. 8
Summary of Pre-tax NPV, IRR and Payback by Metal Price Scenario
From September 2009 Pre-Feasibility Study

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 followed by, in decreasing order: zinc prices, capital costs, operating costs, and lead price.

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.

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Table No. 9
Silver Standard Resources Inc.
Pitarrilla Project
Breccia Ridge Underground
Probable Mineral Reserve Estimate
(Cutoff Grade⁽¹⁾)

In 2011 the Company reviewed alternatives for the Pitarrilla Project and retained M3 Engineering & Technology Corporation (“M3”) to prepare a feasibility study on Pitarrilla. The Company’s development team and M3 will build on previous resource engineering and design work and will focus on mining oxide and sulphide ores from one large open-pit operation. Plant facilities are expected to target 16,000 tonnes per day and include a milling circuit, an agitated leach circuit and a flotation circuit. These facilities are expected to produce silver doré, and separate zinc and lead concentrates containing payable silver. Completion of the Pitarrilla feasibility study is scheduled for mid-year 2012.

A diamond drill program of approximately 8,300 meters is scheduled for 2012, with the objective of expanding the near-surface oxide mineralization at the Breccia Ridge and South Ridge zones. In addition, metallurgical testing is underway to optimize metal recoveries from oxide and sulphide mineralization. Where possible, results of this year’s drilling and metallurgical studies will be included in the Pitarrilla feasibility study.

In January 31, 2012, an updated Pitarrilla mineral resources estimate was prepared, verified and approved by the Company’s qualified person Dr. Warwick Board, Ph.D., Senior Geologist with Silver Standard. The estimate is presented at a 30 g/t silver cut-off grade. These mineral resources estimates are not materially different from those previously reported by the Company. A new mineral reserve estimate will be prepared as part of the Pitarrilla feasibility study. This new mineral reserve estimate will utilize the open-pit mine concept whereas the current mineral reserve estimate reported above in this Annual Report utilizes an underground mine concept.

The following resource estimates for the Pitarrilla Project were prepared 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.

Cautionary Note to U.S. Investors concerning estimates of Measured Mineral Resources.

Table No. 10 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.

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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.

Cautionary Note to U.S. Investors concerning estimates of Inferred Mineral Resources.

Table No.10 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. 10
Silver Standard Resources Inc.
Pitarrilla Project
Mineral Resource Estimate⁽¹⁾

Notes to Table No. 10:

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Diablillos Project

Location, Access and Infrastructure

Our wholly-owned Diablillos Project covers an area of 4,500 ha and is located in the altiplano or puna region 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 six hours, the first half of which is along paved road. The geographic coordinates of the centre of the property are 25°18' South latitude by 66°50' West longitude.

Land Tenure

The project consists of eight mining leases or “minas” totaling 4,500 hectares, and 2 cateos (or exploration licences) of 5,567 hectares. 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. A mineral deposit know as the Oculto deposit was initially defined by 17 diamond drill-holes totaling 3,010 meters and 79 reverse circulation holes totaling 19,114 meters, with this drilling being done by previous property holders BHP-Utah and Pacific Rim Mining. Barrick, under an option to purchase agreement with Pacific Rim Mining drilled an additional 24 diamond drill holes and 150 reverse circulation holes during the period of 1997-1999. Following our deposition of the project in 2003, we drilled 20 drill-holes totaling 3,046 meters, mainly to test geophysical anomalies outside of the Oculto deposit and to test for continuity of several high-grade zones within the known deposit. The peripheral drilling intersected several areas with minor gold and silver mineralization. The drilling within the Oculto deposit zone confirmed continuity of the mineralization forming the deposit. During 2006, a geological review of the project, done as part of 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, a diamond drilling program of approximately 17,600 meters in 107 drill holes was completed by us in 2007 and 2008. This drilling program was designed to investigate whether previously obtained drilling results understated gold concentrates and also to test a number of gold targets separate from the Oculto Zone where a reinterpretation of the geology indicates potential for the discovery of new gold zones.

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 ground waters during the primary mineralizing event, and then later by the near-surface oxidation of sulphide mineral grains which had been deposited from the deposit-forming hydrothermal fluids. Lying directly below the sequence of Tertiary volcanic rocks is a basal conglomerate formation that 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 in the conglomerate formation and overlying volcanic rocks, whereas N-S fault structures are interpreted to be younger than the ENE-WSW faults and define the margins of a downward-displaced structural block that includes the Oculto deposit.

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The bulk of the Oculto gold-silver deposit is hosted by oxidized and porous volcanic and sedimentary 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 (silver bismuth sulphide) as well as with gold in electrum. Owing to the relatively high grades of gold and silver in the Oculto mineralization and the less anticipated recoveries of these metals by heap-leach processing methods, the Oculto deposit is being considered for a conventional milling operation.

Status

We initiated a Preliminary Economic Assessment for the Diablillos Project in 2010 to evaluate the potential for placing the project in production. Additional exploration work and engineering studies are currently being completed on the project. In 2011, surface rock sampling was conducted on the property by our geologists, and we anticipate carrying out additional exploration drilling in 2012 on targets that are peripheral to the Oculto deposit.

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 silver and $700/oz gold, 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.

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Cautionary Note to U.S. Investors concerning estimates of Indicated Mineral Resources.

Table No. 11 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. 11
Silver Standard Resources Inc.
Diablillos Project
Indicated Mineral Resource Estimate
(Cut-off Grade⁽¹⁾)

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.

Table No. 12
Silver Standard Resources Inc.
Diablillos Project
Inferred Mineral Resource Estimate
(Cutoff Grade⁽¹⁾)

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San Agustin Project

Land Tenure, Location, Access and Infrastructure

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 southeast of the property (refer to the San Agustin Location Map, shown below) and the center of the property can be reached by following a gravel road that turns off this highway and passes through the village of San Agustin. In order to maintain our rights to these concessions, we are required to pay mineral license taxes to the Mexican government.

Geology and Mineralization

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 marine 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 feldspar-porphyritic intrusive rocks and the fine-grained interbedded sandstone and siltone units. At depths of 30 meters and more below the surface, in unoxidized rocks, the precious metal mineralization generally consists of disseminated grains and stringer veinlets of pyrite that contain minute inclusions of gold, while silver is more commonly associated with zinc and lead sulphides in veinlets. Within 30 meters of surface, most of the rocks have been oxidized, with sulphide minerals being converted to iron oxide minerals, namely hematite, goethite and limonite. 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 mineralization.

Prior to us 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 to be identified at San Agustin. In early 2004, we completed a reverse circulation drilling program, which totaled 3,890 meters in 24 holes.

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The assay results of this program, together with assays from the earlier drill holes, were used to calculate a preliminary gold resource.

In 2006, Geologix Exploration (“Geologix”) entered into an option to purchase agreement with Silver Standard 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 for Geologix by mining consultants 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 purchase 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 resume exploration work at San Agustin in 2012 by completing another drilling campaign to expand the known resources and to test some of the geophysical anomalies that were outlined 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 prepared a 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, and presented this resource estimate in a technical report dated March, 2009 and filed on SEDAR.

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.

Table No. 13
Silver Standard Resources Inc.
San Agustin Project
Indicated Mineral Resource Estimate
(Cut-off grade)⁽¹⁾

Cautionary Note to U.S. Investors concerning estimates of Inferred Mineral Resources.

Table No. 14 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.

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Table No. 14
Silver Standard Resources Inc.
San Agustin Project
Inferred Mineral Resource Estimate
(Cut-off grade)⁽¹⁾

Mineral Properties

Berenguela Project

Location, Access and Infrastructure

The Berenguela silver-copper-manganese project is located in the high Andean 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 14 mineral concessions covering an area of approximately 6,668 hectares. The project can be accessed from the small city of Juliaca by following a paved highway for about 65 kilometers to the village of 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.

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Geology and Mineralization

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 occurs at an elevation of about 4,200 meters above sea level.

History

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 quantity of ore has been recovered from the project. The ore reserve estimated 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. A preliminary economic assessment study was initiated in the fourth quarter of 2010 and continued until March, 2011 when it was terminated before its completion. The early-stage metallurgical and engineering studies that were done for the preliminary economic assessment were performed by mining consultants Kappes, Casssidy & Associates. No exploration or other types of work programs were carried out on the property in 2011.

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.

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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 titled “Technical Report on the Berenguela Property, Peru” (the “Berenguela Technical Report”).

Cautionary Note to U.S. Investors concerning estimates of Indicated Mineral Resources.

Table No. 15 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. 15
Silver Standard Resources Inc.
Berenguela Project
Indicated Mineral Resource Estimate
(50 g/t silver Cut-off grade – capped)

Please refer to the Berenguela Technical Report available on the Company’s website.

Cautionary Note to U.S. Investors concerning estimates of Inferred Mineral Resources.

Table No. 16 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. 16
Silver Standard Resources Inc.
Berenguela Project
Inferred Mineral Resource Estimate
(50 g/t Silver Cut-off Grade – capped)

Please refer to the Berenguela Technical Report available on the Company’s website.

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Nazas Project

Until October, 2011, the property that constitutes the Nazas Project was a collection of 31 contiguous mineral concessions located in north-central Durango State, Mexico, that lies about 17 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 four claims purchased from Camino Minerals Corp., two claims that were acquired through a prospecting agreement with La Cuesta International, Inc., and 25 small claims 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 2011, we completed a systematic and comprehensive exploration program that consisted of multiple methods of geophysical surveying (ground magnetics, induced polarization chargeability and resistivity, gravimetrics and magneto-tellurics resistivity), geological mapping and rock sampling and the diamond drilling of 20 boreholes for a combined length of 11,641 meters. Several of the drillholes targeted large epithermal quartz veins that contain weak but significant gold mineralization at surface. Other drillholes were designed to test at depths of more than 300 meters below surface the intersection between subvertical faults and a subhorizontal contact between an upper package of Tertiary volcanic rocks and significantly older sedimentary rocks. Such a geological setting is found at our Pitarrilla Project where it is proven to be highly prospective for silver-rich F-Zn-Pb mineralization. While a number of the 2011 drillholes intersected mineralized zones containing anomalous concentrations of gold, silver, zinc and lead, a mineral resource was not delineated by our drilling. As a consequence, the decision was made in October, 2011 to terminate the option to purchase agreement with Minerales y Productos Metalurgicos S.A. de C.V. for the 25 small claims included in the Nazas Projects. However, the remaining six claims at Nazas which we control 100% subject to royalty interests held by La Cuesta International, Inc. will continue to be explored in the future.

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Challacollo Project

Location, Access and Infrastructure

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.

Geology and Mineralization

The Challacollo Project is focused on four main north-south trending epithermal quartz 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 sulphide minerals have been replaced by iron oxides, with silver occurring in supergene mineral phases.

History

During the two decades between the closure of the underground mine and us acquiring the Challacollo Project 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 the future.

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Resource Estimate

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. 17 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. 17
Silver Standard Resources Inc.
Challacollo Project
Silver Standard Indicated Mineral Resource Estimate
(50 g/t Silver Cut-off Grade)

Cautionary Note to U.S. Investors concerning estimates of Inferred Mineral Resources.

Table No. 18 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.

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Table No. 18
Silver Standard Resources Inc.
Challacollo Project
Silver Standard Inferred Mineral Resource Estimate with Sundance Review
(50 g/t Silver Cut-off Grade)

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.

The Candelaria District developed into the richest silver district in the State of Nevada, following discovery of high-grade mineralized quartz 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, a linear zone of brittle-ductile deformation related to faulting. High-grade veins form along contacts of felsic rock dikes that were intruded into the shear zone that is developed in a sequence of Tertiary volcanic rocks. 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 and average 3.5 to 4.1 ounces of silver per ton in silver concentration.

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Reclamation of the Candelaria mine has been on-going for the past several years. The mine dumps have been re-contoured and re-vegetated, while both of the heap leach piles have been rinsed with fresh water and re-seeded. 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. This 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”.

Mark G. Stevens, P.G. prepared the following resource estimate for the Candelaria project in accordance with the standards of Canadian National Instrument 43-101 and the definitions of the CIM Standards on May 24, 2001.

Cautionary Note to U.S. Investors concerning estimates of Measured Mineral Resources.

Table No. 19 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. 19 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.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.

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Table No. 19
Silver Standard Resources Inc.
Candelaria Project
Silver Standard Mineral Resource Estimate
(0.5 troy oz/ton soluble Ag)

Maverick Springs Project

Location, Access and Infrastructure

The Maverick Springs Project is located approximately half-way between Elko and Ely, Nevada and covers approximately 3,970 acres within the prospective belt or trend 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.

Geology and Mineralization

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 Paleozoic marine sedimentary rocks that are unconformably overlain by basin-fill clastic sediments and Middle Tertiary volcanic tuffs. Gently folded and normal-faulted limestone and calcareous siltstone formations are the main host rocks to the silver-gold mineralization at the Maverick Springs Project. The disseminated mineralization does not outcrop; it occurs at depths of 500 feet to 600 feet below surface and has been delineated by programs of reverse circulation and diamond core drilling. The mineralization trends north-northeast and occurs as a gently convex-shaped tabular body with length-width dimensions of approximately 8,000 feet and 2,500 feet, respectfully. In the vertical dimension the mineralized body attains a maximum thickness of about 200 feet.

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History

Newmont was the first company to test the mineral potential of the Maverick Springs Property in the late 1990’s, completing geological mapping, soil and stream sediment geochemical surveys as well as a substantial amount of drilling. A total of 130 drillholes were completed by Newmont, of which 37 were shallow conventional rotary or percussion holes, 39 were reverse circulation holes, and 54 were diamond core holes. Vista Gold and its Nevada based affiliate, VNC, then took over Newmont’s purchase option agreement for the mineral rights to the property and conducted a wide-spaced seven-hole reverse circulation drilling program to test for continuation of the previously identified mineralized zone. In 2003 and 2004 respectively, Vista completed an additional 16 and 13 reverse circulation holes to further test 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 a joint venture with Vista Gold, whose 45% interest in the project is now controlled by Allied Nevada, and completed a 5 hole, 5,330 foot reverse circulation drilling program. Since the 2008 work program, we have not carried out any exploration activities on the property.

Resource Estimate

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 available on the Company’s website (the “Maverick Springs Technical Report”). 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. 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.

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Table No. 20
Silver Standard Resources Inc.
Maverick Springs Project
Indicated Mineral Resource Estimate
(1 oz/ton Silver-Equivalent Cutoff Grade)

Please refer to the Maverick Springs Technical Report dated April 13, 2004.

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.
Maverick Springs Project
Inferred Mineral Resource Estimate
(1 oz/ton Silver-Equivalent Cutoff Grade)

Please refer to the Maverick Springs Technical Report dated April 13, 2004.

Sunrise Lake Project

The Sunrise Lake Project 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 Project consists of six mining leases, which form a contiguous block with an aggregate area of 1,618 hectares.

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The Sunrise Lake Project consists of a lens of polymetallic massive sulphides overlying stringer zones of low-grade mineralization. The massive sulphide lens is three 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 Project in October 1987. During 1987 and 1988, they drilled a total 18,951 meters in 65 diamond drillholes on the Sunrise Lake Project and 1,280 meters in 12 holes on peripheral targets. In 1998, they completed an additional seven diamond drillholes 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 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 Sunrise Lake Project 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 and available on the Company’s website (the “Sunrise Lake Technical Report”).

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.
Sunrise Lake Project
Silver Standard Indicated Mineral Resource Estimate with Roscoe Postle Review
(30 g/t Silver Cut-off Grade- Uncut)

Please refer to the Sunrise Lake Technical Report.

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.

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Table No. 23
Silver Standard Resources Inc.
Sunrise Lake Project
Silver Standard Inferred Mineral Resource Estimate with Roscoe Postle Review
(30 g/t Silver Cut-off Grade- Uncut)

Please refer to the Sunrise Lake Technical Report.

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 Chihuahua City. 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 mineralized 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 Mexican cities of Hidalgo del Parraland Durango. In order to maintain our rights to these concessions we are required to pay surface mining taxes to the Mexican government.

The Veta Colorada vein structure is traceable for over 10 kilometers, striking north-south and dipping moderately to the east. The base of this mineralized structure is represented by a planar fault that cuts through a sequence of Tertiary volcanic rocks a few hundred meters thick as well as significantly older marine sedimentary rocks that form the basement to the volcanics. 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 fractured and locally brecciated, with quartz stocks and quartz-cemented breccias bodies extending up to 30 meters from the larger veins. Silver mineralization in the breccias bodies 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 2011.

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 90 kilometers due east of Mazatlan in the Sierra Madre Mountains in west-central Mexico and comprises two claims covering an area of 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.

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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.

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. 24 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.

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Table No. 24
Silver Standard Resources Inc.
San Marcial Project
Silver Standard Inferred Mineral Resource Estimate with Sundance Review
(30 g/t Silver Cut-off Grade)

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 $19.50 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 a lease dated March 13, 2008, as amended June 19, 2008, that expire on March 31, 2013. Under the terms of the lease, 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; and under the terms of the amendment to the lease, we lease 1,319 square feet of office space for a four year and five month period at rates increasing from $44,846 per year, pro rated for the first five months 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. Under a sublease dated November 1, 2008, we subleased 1,319 square feet of the office space at 1180, 999 West Hastings Street, Vancouver, BC until October 30, 2011 at the same rate per square foot as set out in the amendment to the lease. The sublease terminated early on August 2, 2011.

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

This Management’s Discussion and Analysis (“MD&A”) is intended to supplement the audited consolidated financial statements of Silver Standard Resources Inc. (“Silver Standard” or “the Company”) for the year ended December 31, 2011, and the related notes thereto, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”). The Company adopted IFRS on January 1, 2011 with a transition date of January 1, 2010. Full disclosure of the Company’s IFRS accounting policies and a reconciliation of the previously disclosed opening balance sheet prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”) to IFRS is set out in notes 2 and 26 to the audited consolidated financial statements.

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The Company’s 2010 comparative financial information in this MD&A have been restated and are presented in accordance with IFRS, but 2009 comparative financial information has not been restated. All figures are expressed in U.S. dollars except where otherwise indicated. This MD&A has been prepared as of March 11, 2012, and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2011. Unless otherwise stated all currency amounts are presented in U.S. dollars.

This Annual Report contains “forward-looking statements” that are subject to risk factors set out under the heading “2.D. – Risk Factors”. The Company uses certain non-GAAP financial measures in this Annual Report. For a description of each of the non-GAAP financial measures used in this Annual Report please see the discussion under ‘Non-GAAP Financial Measures’. The Company changed its presentation of costs per ounce during 2011 in line with the newly-endorsed production cost guidance provided by The Silver Institute.

Financial and Operational Summary 2011

• Silver production of 7.1 million ounces in 2011 compared to 6.3 million ounces in 2010, an increase of 12%.
• Net income of $80.1 million or $1.00 per share.
• Operational improvements at the Pirquitas silver mine in Argentina to position the mine for consistent period-on-period production performance.
• Monetized approximately one-third of the Company’s shareholding in Pretium for $130 million, while retaining an interest with a market value at February 29, 2012 in excess of $400 million.
• Consolidated the Company’s ownership interest in the high-grade gold and silver San Luis project in Peru.
• Completed the sale of the Bowdens project in Australia for $70 million.
• Accelerated the feasibility study on the Pitarrilla project in Mexico towards completion in mid- 2012.
• Strengthened and enhanced the senior management team and technical capability with several appointments.
• In the Cortaderas area at the Pirquitas mine, intersected high-grade silver and zinc mineralization, including 218 meters of 477.3 g/t silver and 7.97% Zn (DDH-214), in and around a breccia body to the north of the current open-pit, resulting in the establishment of a new Inferred mineral resource estimate of 22.5 million ounces of contained silver.

Silver Standard is engaged in the exploration, development and production of silver-dominant mineral properties located in the Americas.

The Company’s strategic focus is to optimize production of silver from the Pirquitas mine and to advance other principal development and exploration projects, including Pitarrilla, San Luis, Diablillos and San Agustin. The Company has a large in-ground silver position and looks to exploit this for the benefit of the Company’s shareholders. Certain projects also contain significant gold and base metals. The Company’s future growth will be primarily driven through the development of core projects, while monetizing other non-core projects to support funding requirements.

2011 was a volatile year for equity and financial markets globally. Significant sell-offs were evidenced in July and August as the U.S. sovereign debt downgrade was pending and the European sovereign debt situation worsened. Equity markets did recover somewhat and were led by the U.S. Dow Jones Index.

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Central banks around the world, including China and many European banks, acted in concert with the Americans to lower interest rates as the year progressed.

This volatile economic environment has been supportive for the silver price and helped drive silver to a record high of $48.70 per ounce at the end of April before a sharp price reduction. Price increases through the summer saw the silver price back in the $40 per ounce range, but concerns over the world economic outlook in September resulted in prices declining to the low $30 per ounce range. The silver price has been more stable since then and closed the year at $28.18 per ounce. Silver has maintained its status as a “safe haven asset” and a component of asset portfolios around the world.

The Company realized an average silver price of $33.58 per ounce on deliveries during 2011, compared to $20.92 per ounce in 2010.

The stronger price environment enabled the Company to increase revenues by 32% compared to 2010 despite sales volumes being lower, as a result of the Company terminating its long-term sales contract in the third quarter of 2011.

Two significant events impacted Pirquitas during 2011. Firstly, the replacement time for delivery of the ball mill gearbox significantly impacted operations. The Company believes, however, that during the year significant progress was made improving the infrastructure, systems and processes for future operations at Pirquitas. The primary crushing capacity was increased and the ball mill refurbished. Cost initiatives have also been implemented to lower costs where possible and offset the risk of inflationary pressures. Despite the ball mill not being operational for over two months of the year, production of 7.1 million ounces of silver exceeded 2010 by 12%.

Secondly, a reduction to the estimated mineral reserves at Pirquitas has now been incorporated into the mine plan and shortened the mine life. However, this had no significant impact on the Company’s financial results for 2011. In addition, the Company believes the exploration potential at Pirquitas is significant and has planned an extensive drilling program for 2012.

The Company concluded 2,000 tonnes of spot sales of silver concentrate during the fourth quarter of 2011 (of which 1,000 tonnes was delivered before the year-end), and announced on February 14, 2012 that it had committed an additional 6,000 tonnes of silver concentrate to various customers for delivery in the first half of 2012. In addition to the spot sales, trial shipments totaling 500 tonnes of silver concentrate are at various stages of evaluation with potential customers, and these trials are part of longer term contract negotiations. This committed tonnage goes a long way toward reducing the inventory which had accumulated during the year, and current deliveries are expected to be in a strong price environment.

The Company also completed significant transactions in the year; acquiring the remaining 30% interest in the San Luis project, monetizing the non-core Bowdens project for $70 million, and monetizing a significant amount of value from the investment in Pretium by selling approximately one-third for $130 million. The market value of the Company’s investment in Pretium at the year-end was in excess of $300 million.

Exploration remains important for the Company and during 2011 $36 million was spent, primarily at the development projects of Pitarrilla in Mexico and San Luis in Peru.

Through 2011 the Company accelerated the Pitarrilla project in Mexico. In the third quarter the Board of Directors committed significant funds for completion of a feasibility study by the middle of 2012, and for commencement of infrastructure construction, such as the operations camp, access roads and water wells. The Company has also been building the management team to advance this project.

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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:

Review of the Annual Financial Results

Net income for the year ended December 31, 2011 was $80.1 million ($1.00 per share) compared to $338.5 million ($4.34 per share) in 2010 and a net loss of $13.2 million ($0.19 per share) in 2009. The following is a summary and discussion on significant components of income and expenses recorded during 2011 compared to the prior two years.

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In 2011, the Company recorded total revenues from the Pirquitas Mine of $147.8 million from the sale of 4.8 million ounces of silver and 12.4 million pounds of zinc. Shipments made in the period realized an average silver price of $33.58 per ounce, excluding the impact of period-end price adjustments, and zinc realized an average price of $1.02 per pound. This is compared with 2010 which recorded revenues of $112.3 million from the sale of 5.9 million ounces of silver at an average realized price of $20.92, and 2009 which only recognised $5.4 million in revenue because commercial production only started in December of that year. There were no zinc sales in either 2010 or 2009. The increase in sales recognised compared to 2010 is reflective of the significant increase in the price of silver, partially offset by the lower volume sold in 2011. Zinc sold in 2011 contributed $9.3 million to total revenues.

Since the mine’s start-up, silver concentrates were sold pursuant to a sales contract to a single customer. The contract was terminated during the third quarter of 2011 which resulted in sales volumes of silver concentrate being lower than the prior year. Zinc concentrate sales were unaffected. A total of 1,000 tonnes of spot sales of silver concentrate were completed in the fourth quarter the Company has committed an additional 7,000 tonnes for delivery in the first half of 2012. The Company is continuing negotiations to establish long-term contracts with various counterparties.

Cost of sales for 2011 was $95.9 million compared to $98.1 million in 2010, and $7.9 million in 2009. This resulted in income from mine operations of $51.9 million in 2011, $14.1 million in 2010 and a loss of $2.5 million in 2009. The net result was an improvement in margins from 2010 to 2011 from 14.4% to 54.1% . Higher silver prices realized in 2011, and the commencement of zinc sales, fully offset the increase in unit costs that the mine experienced in the same period.

General and administrative expenses for the year ended December 31, 2011 were $23.7 million compared to $28.9 million in 2010 and $20.9 million in 2009. The main reason for the reduction between 2011 and 2010 was share-based payments that are revalued based on the Company’s share price were significantly lower as the share price declined towards the end of 2011. Salaries and benefits were slightly higher in 2011 due to the increase in headcount as the Company expands its business. The increase in 2010 compared with 2009 was primarily due to growth in headcount and was mainly salary, employee benefit and bonus related, and the increase in stock price through 2010 also resulted in a significant increase in certain forms of share-based payments.

Expensed exploration costs of $5.7 million for 2011 and $2.4 million in 2010, and $0.5 million in 2009 relate primarily to the drilling programs at the Pirquitas mine. Such costs at an operating property are expensed in line with the Company’s accounting policy.

In 2011 the Company recorded a gain on sale of mineral properties of $51.4 million from the sale of the Bowdens project in Australia, offset by $1.5 million of transaction costs related to the Snowfield and Brucejack disposition in 2010, for a net gain of $49.9 million. In 2010 the Company recognised a total gain of $402.0 million from the disposal of Snowfield and Brucejack, and the smaller Silvertip property.

In September 2011, the Company sold the Bowdens project in Australia to Kingsgate for $35.0 million in cash, 3.4 million shares of Kingsgate (with an approximate value of $25.6 million), and two deferred cash payments of A$5 million each. The first deferred payment was received on December 31, 2011 and the second is due on June 30, 2012. Total consideration was approximately $70.7 million, resulting in a gain on sale of $51.4 million (after tax gain of $35.3 million).

On December 21, 2010 the Company sold its 100% interest in the Snowfield and Brucejack properties located in British Columbia, Canada to Pretium for total consideration of $442.3 million. Under the terms of the transaction the Company received a total of 32.5 million common shares of Pretium with a fair value of $191.9 million, cash proceeds of $211.3 million (before costs of $12.4 million) and a non-interest bearing convertible promissory note in the principal amount of $39.1 million. This resulted in a gain of $388.8 million (after tax gain of $360.6 million).

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During February 2010, the Company sold its 100% interest in the Silvertip property located in British Columbia, Canada to Silvercorp Metals Inc. (“Silvercorp”). Under the terms of the agreement, Silvercorp paid consideration of $15.0 million, comprising cash of $7.1 million and 1.2 million common shares of Silvercorp with a fair value of $7.8 million, for an after-tax gain of $13.1 million.

On April 8, 2011 the Company sold 11.5 million units of Pretium for $120.1 million, before transaction costs. Each unit is comprised of one common share of Pretium and half of a warrant to purchase an additional common share of Pretium for C$12.50. This constituted a partial disposal of the investment in the equity accounted associate, and resulted in a gain of $38.8 million. As at December 31, 2011 the Company retained an ownership interest of 28.39% in Pretium, which had a book value of $136.3 million and a market value in excess of $300 million.

Other income (expenses) comprised the following for the year ended December 31:

The unrealized gain on financial instruments at fair value through profit and loss (“FVTPL”) is primarily from the convertible notes, for which a gain of $20.2 million was recorded in 2011 compared to a loss of $1.1 million in 2010. This item was not recorded in 2009 as this instrument did not meet the definition of a derivative liability under Canadian GAAP. Since the acquisition of the Company’s interest in Pretium in December 2010 the Company is required to record its share of Pretium’s losses, which were $6.1 million in 2011 and $0.1 million in 2010. The Company wrote off exploration costs of $4.5 million following its decision to let its option of the Navidad claim group at the Nazas property expire. There were no significant cost write-offs in either 2010 or 2009. The gain on marketable securities recognised in the income statement is the cumulative gain from the sale of marketable securities which has been recycled from other comprehensive income.

The Company recorded a foreign exchange loss for the year ended December 31, 2011 of $2.7 million compared to a loss of $0.9 million in 2010 and a gain of $1.2 million in 2009. The Company’s main exposure to foreign exchange risk is related to net monetary assets denominated in Canadian dollars and Argentine pesos. During 2011 the Canadian dollar was strong against the U.S. dollar during the first half of the year and weakened subsequently, while the Argentine peso steadily weakened against the U.S. dollar.

In the year ended December 31, 2011 the Company recorded an income tax expense of $31.4 million compared to $32.2 million in 2010 and a recovery of $4.3 million in 2009. Of the total tax expense in 2011, $21.1 million reflects the current and deferred tax expense at Pirquitas, $5.2 million from the capital gain on the sale of the Pretium shares, $16.1 million from the gain on the sale of the Bowdens project; these expenses are partially offset by realized losses and the balance relates to changes in deferred tax liabilities. In 2010 the tax expense at Pirquitas was $5.5 million and there was an expense of $27.1 million in Canada primarily due to the sale of the Snowfield and Brucejack properties. The income tax recovery in 2009 was the result of unrealized losses on marketable securities and the operating loss at Pirquitas in that year.

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Quarterly Financial Review

The following table sets out selected results from the eight most recent quarters all of which have been prepared in accordance with IFRS;

The Pirquitas mine commenced production at the end of 2009 and gradually increased production, and correspondingly, revenue through 2010 and into the first half of 2011. Silver prices also increased from the second half of 2010 through 2011. Lower revenues in the second half of 2011 were due to the termination of the sales contract while long-term contract negotiations were undertaken. Production continued through this period which resulted in a significant increase in finished goods inventory.

Income from mine operations follows the trend of revenues as a significant portion of operating costs are fixed and, although they increased on a unit basis through 2011, were broadly consistent. Net income of the Company has been impacted by non-routine transactions such as the sale of mineral properties in the fourth quarter of 2010 and third quarter of 2011, and the partial sale of the Company’s investment in Pretium in the second quarter of 2011. In 2011 changes in fair value of the derivative liability has had an increasingly significant impact on net income with a gain in excess of $20.0 million.

Review of Quarterly Financial Results – three months ended December 31, 2011 compared to the three months ended September 30, 2011

The Company recorded net income attributable to shareholders in the fourth quarter of 2011 of $2.6 million, compared to $21.8 million in the third quarter. Compared to the prior quarter net income was impacted significantly by the following factors.

In the fourth quarter of 2011 the Company recognised revenues of $14.4 million from the sale of 0.5 million ounces of silver and 1.9 million pounds of zinc, with realized silver prices of $33.42 per ounce, and $0.87 per pound of zinc. This compares to revenues of $26.2 million in the third quarter of 2011 from the sale of 0.7 million ounces of silver, and 3.9 million pounds of zinc, with realized silver price of $39.88 per ounce, and $1.01 per pound of zinc. In addition, negative final settlement prices and mark to market (“MTM”) adjustments reduced revenue compared to units delivered.

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Cost of sales was higher in the fourth quarter because a higher proportion of operating costs were expensed during the period of plant downtime while not producing inventory, an increase in depreciation charges following the revised mineral reserve and mineral resource estimates, and a write down of low grade stockpiles that are planned to be processed towards the end of the mine life. The increased costs generated a loss from mining operations in the fourth quarter.

General and administrative costs in the fourth quarter were $3.3 million compared to $6.7 million in the third quarter. The reduction in the fourth quarter was due to lower expenses on share-based payments that are linked to the Company’s share price which fell significantly in the fourth quarter. Severance expenses were also incurred in the third quarter.

The recognition of a gain of $51.4 million from the disposal of the Bowdens project in the third quarter materially increased net income and there were no significant dispositions or similar transactions in the fourth quarter.

Unrealised gains on financial instruments at FVTPL were $6.7 million in the fourth quarter compared to $5.4 million in the third quarter due to the continued reduction in fair value of the conversion option of the convertible notes.

An income tax recovery of $10.4 million was recorded in the fourth quarter compared to an expense of $30.9 million in the third quarter. The recovery in the fourth quarter was a result of the operating loss recorded at Pirquitas for the quarter as discussed above, the Company also realized a capital loss in Canada which sheltered gains from earlier in the year, and a reversal of deferred tax liabilities in Argentina. The significant tax expense in the third quarter was primarily driven by the taxable gain from the sale of the Bowdens project, operating income at Pirquitas and an increase in deferred tax liabilities.

Pirquitas Mine, Argentina

Mine production

The Pirquitas mine produced 7.1 million ounces of silver during 2011 compared with 6.3 million ounces in 2010. Although production was 12% higher than in 2010, 2011 production was negatively impacted by over two months of production downtime due to installing additional crushing capacity, and operating for most of the year with a damaged ball mill gearbox. The gearbox has now been completely rebuilt to nearly-new condition, and the mill recommenced operating in early November 2011. A spare gearbox from Europe is due to arrive in March 2012 and the Company has purchased a spare ball mill ring gear with expected delivery towards the end of 2012. Since the mill has been back in operation, it has exceeded design rates and production volumes have been strong.

Operations were also impacted by import restrictions imposed by the Argentine government on all industries, including mining. The restrictions make the timely sourcing of spare and replacement parts challenging as many necessary mining-related parts are not readily available at the required quality or specifications in Argentina. Import restrictions therefore result in lower equipment availability and additional maintenance costs. Most significantly impacted was the operation of the jig circuit. Loading, drilling and haulage equipment availabilities were also impacted.

During the year, 1.1 million tonnes of ore were processed at an average milling rate of 2,983 tonnes per day, compared to 1.3 million tonnes at an average of 3,439 tonnes per day in 2010. The reduced tonnage processed during 2011 was due to the aforementioned ball mill shutdowns, however, the average milling rate during 2011 per operating day was in excess of 3,600 tonnes per day.

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Ore milled during 2011 contained an average silver grade of 253 g/t and an average silver recovery of 79.5% was achieved. This was a significant improvement compared to a silver grade of 233 g/t and recovery of 65.2% in 2010. The better silver recovery achieved during 2011 was due principally to improvements in the consistency of feed and continuous improvements to the crushing and flotation circuits.

The mine produced a total of 10.1 million pounds of zinc in 2011 which met guidance and resulted from milling higher grades and achieving better recovery than planned. There was no zinc production in 2010 as the zinc circuit was not commissioned until the start of 2011.

Mine operating costs

Direct mining cost per ounce, total cash cost per ounce and total production cost per ounce are non-GAAP financial measures. Please see the discussion under ‘Non-GAAP Financial Measures’ below.

During 2011 the Company adopted The Silver Institute’s presentation guidance for production costs. This disclosure guidance differed from the Company’s previous methodology; previous disclosures have therefore been restated to conform to the amended presentation.

Direct mining costs in 2011 were $13.65 per ounce of silver compared to $12.19 per ounce in 2010. The increase in unit cost in 2011 versus 2010 was primarily driven by inflationary pressures on local labour costs and catering, repairs and maintenance costs related to the primary crusher and the refurbishment of the ball mill gearbox, additional maintenance costs and external costs associated with the import restrictions, and expenditures incurred to improve the long-term production efficiency of the facility.

Total cash cost in 2011, which includes by-product credits, treatment and refining costs, royalties and production taxes, was $20.93 per ounce of silver compared to $18.03 per ounce of silver in 2010. Treatment and refining costs, as well as royalties and production taxes all vary as a function of sales prices and are recorded for the actual ounces of silver sold. Consequently, on a per ounce basis, the variability in total cash cost from period to period is partially due to sales prices and the difference between production and sales volumes. The higher incremental per ounce impact of these costs in 2011 compared with 2010 is due primarily to higher prices achieved for sales in the current year.

Total production cost, which includes depreciation and amortization, was $25.37 per ounce in 2011 compared to $22.14 in 2010. The depreciation and amortization costs are largely similar on a per ounce basis, although these costs were impacted in the fourth quarter of 2011 following the reduction of mineral reserves at Pirquitas which increased the depreciation charges on certain assets.

Pirquitas Mineral Resources and Reserve

As part of the Company’s ongoing production to mineral reserve reconciliation and mine planning, and to delineate the deposit in greater detail for the mine’s Mineral Resources and Mineral Reserve estimates, the Company undertook a comprehensive drilling campaign between the fourth quarter of 2010 and September 2011. Assay results from these drill-holes were utilized by the Company’s Qualified Persons (“QPs”) to complete advanced modeling of the deposit’s Mineral Resource and Mineral Reserve estimates. The results of this work were included in the National Instrument 43-101 (“NI 43-101”) technical report that was filed on SEDAR on December 23, 2011. As of December 31, 2011 the mineral reserves of 16.3 million tonnes averaged 172.3 g/t of silver and 0.72% zinc, for approximately 90.3 million ounces of contained silver and 259 million pounds of contained zinc.

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Exploration drilling program

In addition to the comprehensive in-fill drilling program that was completed in 2011 in the area of the San Miguel open-pit, the Company diamond drilled 1,837 meters at an exploration target located just 200 meters north of the pit in the Cortaderas Valley. The main target at Cortaderas consists of a steeply-plunging breccia body where the breccia matrix is composed of silver-bearing iron and zinc sulphide mineralization and sulfide-rich, vein-hosted mineralization was intersected by drill-holes in the vicinity of the above-mentioned breccia body. To date, nine relatively closely-spaced drill-holes have intersected the mineralized breccia body. The results from this drilling were encouraging and based on the drilling completed, the Company estimated an Inferred Mineral Resource for the breccia of 7.0 million tonnes averaging 98.4 g/t silver and 2.3% zinc, for approximately 22.5 million ounces of contained silver and 360.1 million pounds of contained zinc, at a 50 g/t silver cut-off grade. Additional drilling is planned in the first half of 2012 to further define and delineate this resource.

Fiscal stability agreement and regulatory environment

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 approximately 10% from concentrates for projects with fiscal stability agreements pre-dating 2002. The Company has been advised that Pirquitas is subject to this export duty despite contrary rights detailed under the 1998 fiscal stability agreement. The legality of the export duty applied to silver concentrates has been challenged and is currently under review by the court in Argentina. In July 2010, the Company filed a claim in the provincial court for repayment of export duties paid on silver concentrates, and for an order to cease payment of the export duty until the matter has been decided by the court. An order was granted effective September 29, 2010 to cease payment of the export duty on silver concentrates pending the decision of the courts, and in April 2011 a government appeal against this order was denied.

As of December 31, 2011 the Pirquitas mine has paid $6.6 million in export duties against which it has filed for recovery. In accordance with the order to cease payment the Company has not been paying export duties on silver concentrate but continues to accrue duties in full until the outcome of the claim is known with certainty. At December 31, 2011, the Company had accrued a liability totaling $13.1 million, with a corresponding impact on cost of sales in the relevant period. If this export duty is successfully overturned the benefit will be recognized in the Consolidated Statement of Income for the full amount of paid and unpaid duty in the period recovery becomes virtually certain.

On October 26, 2011 the Argentina government announced a decree that requires all funds from mining export sales to be repatriated to Argentina and converted into Argentina Pesos within the Sole Foreign Exchange Market in Argentina, and each transfer is subject to a 0.6% transfer tax. The mining industry had previously been exempted from this tax. Although the aforementioned fiscal stability agreement also includes stability over foreign exchange controls, the government removed such benefits with this decree. The Company will comply with all laws and regulations, and is monitoring the situation closely. The impact of the transfer tax should not have a material impact on the Company.

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Exploration

Pitarrilla, Mexico

A total of $18.2 million was spent during 2011 at the wholly-owned Pitarrilla project located in the state of Durango, Mexico compared to $17.7 million in 2010.

During the year a campaign of diamond drilling was conducted, with 83 boreholes and a total of 13,867 meters being drilled. This drilling program was designed to provide in-fill assay data for an enhanced estimate of the project’s ‘oxide’ silver Mineral Resource as well as geotechnical and metallurgical information that will be used for mine design and optimization. This drilling work is the basis for a feasibility study which is scheduled to be completed in the middle of 2012.

A scoping level evaluation indicates the optimum project will be a large open pit mine. Plant facilities are expected to target 16,000 tonnes per day and include a milling circuit, an agitated leach circuit and a flotation circuit. These facilities are expected to produce silver doré and separate lead and zinc concentrates containing payable silver.

The design of the open pit is expected to start in the upper and mid-level oxide and transitional ores and then extend into the higher grade sulfide ores in the heart of the deposit in the basal conglomerate zone and finally bottom out in the upper levels of sulfide mineralization in sedimentary structures below the conglomerate. This mining operation will leave intact, the middle and lower zones of the sedimentary structures for subsequent potential underground mining.

The Environmental Impact Assessment (“EIA”) process is currently scheduled to be completed with a construction permit application in the third quarter of 2012. Land access rights are being secured and construction has commenced for the operations camp, water wells and access roads.

In March 2012 the Company plans to commence the latest phase of in-fill and brownfields drilling. This diamond drill program of approximately 8,300 meters has the objective of expanding the near-surface oxide mineralization at the Breccia Ridge and South Ridge zones. In addition, metallurgical testing is underway to optimize metal recoveries from oxide and sulfide mineralization. Where possible, results of the drilling and metallurgical studies will be included in the Pitarrilla feasibility study.

The Company also continues to build management and technical capability, notably with the recruitment of a new country manager and a project manager.

The Company updated the Mineral Resources at Pitarrilla as of January 31, 2012, as announced in the Company’s news release on February 27, 2012 and the project currently comprises Measured and Indicated Mineral Resources of 245.0 million tonnes containing 655.7 million ounces of silver averaging 83.3 g/t and Inferred Mineral Resources of 31.3 million tonnes containing 65.0 million ounces of silver averaging 64.7 g/t, at a 30 g/t silver cut-off grade. The project also contains Measured and Indicated Mineral Resources of 4 billion pounds of zinc and 2 billion pounds of lead.

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San Luis, Peru

A total of $5.6 million was spent during 2011 at the now wholly-owned San Luis project in Peru compared to $6.4 million in 2010. On July 28, 2011, the Company acquired the remaining 30% interest in the San Luis project from the Company’s former joint venture partner, Esperanza Resources Corp. (“Esperanza”). Under the terms of the agreement, the Company paid $17.9 million in cash, transferred to Esperanza the 6.5 million shares of Esperanza that the Company owned, and granted to Esperanza a 1% net smelter return royalty on future revenues earned from the project.

Long-term land access negotiations continued with two local communities, one agreement being completed and one ongoing, and work also continued on completing the required Environmental Impact Study (“EIS”). The completion of the land access agreements and approval of the EIS will enable a construction decision to be made.

During the year, mineral prospecting on the property resulted in the discovery of a set of northwesterly trending quartz veins which were tested for their precious metal content with the collection of 265 rock-chip samples. Assay results for these samples indicate sections of these veins are significantly mineralized with gold and require further assessment by diamond drilling. In addition, the Company contracted an external consultant to examine and assess the potential of the BP Zone. This zone of widespread hydrothermal alteration and base metal mineralization is centered about 4 kilometers southwest of the Ayelen vein-hosted gold-silver deposit. It was concluded that the alteration and mineralization found at the BP Zone is most likely related to a porphyry intrusion and warrants additional drill-testing. Exploration programs to further evaluate the epithermal gold and porphyry copper targets are planned.

The San Luis project comprises Proven and Probable Mineral Reserves of 0.5 million tonnes containing 7.2 million ounces of silver averaging 446 g/t and 0.29 million ounces of gold averaging 18 g/t. These Mineral Reserves are 100% attributable to the Company as of July 28, 2011, following its consolidation of ownership.

Diablillos, Argentina

A total of $2.6 million was spent during 2011 at the Company’s wholly-owned Diablillos project (which is located 275 kilometers south of the Pirquitas Mine in northwestern Argentina) compared to $2.2 million in 2010.

Expenditures primarily included administrative, property taxes and camp maintenance costs. Fieldwork mainly comprised rock sampling to identify satellite zones of near-surface oxidized gold mineralization that would complement the resources defined in the main Oculto silver-gold deposit. A number of prospects were identified for follow-up mechanized trenching and additional sampling and several of these targets will be drilled in 2012 with shallow boreholes.

The Oculto deposit at the Diablillos project has an Indicated Mineral Resource of 21.6 tonnes containing 77.1 million ounces of silver averaging 111 g/t and 0.64 million ounces of gold averaging 0.9 g/t, with additional Inferred Mineral Resources of 7.2 million tonnes containing 6.3 million ounces of silver averaging 27 g/t and 0.19 million ounces of gold averaging 0.8 g/t.

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San Agustin, Mexico

A total of $0.6 million was spent during 2011 at the Company’s wholly-owned San Agustin project located in Durango State, Mexico compared to $1.1 million spent in the prior year. Most of the expenditure was incurred as property holding costs and other administrative expenses.

Advanced negotiations were conducted during the year with three parties that control the property surface rights. Once land access agreements are in place, a 5,000 meter diamond drilling program will be initiated. The objective of the drilling program will be to expand the near-surface oxidized gold resource. In addition to the proposed program of in-fill drilling, detailed metallurgical studies will also be undertaken and will focus on gold recovery characteristics of the oxide gold mineralization.

The San Agustin project currently comprises an Indicated Mineral Resource of 121 million tonnes containing 47.8 million ounces of silver averaging 12.3 g/t and 1.59 million ounces of gold averaging 0.41 g/t, along with an Inferred Mineral Resource of 91.2 million tonnes containing 36.9 million ounces of silver averaging 12.6 g/t and 1.06 million ounces of gold averaging 0.36 g/t.

Nazas, Mexico

A total of $4.4 million was spent during 2011 at the Company’s wholly-owned Nazas project located in Durango State, Mexico compared to $1.3 million during 2010.

Nazas, which until recently comprised three contiguous mineral properties covering approximately 236 square kilometers, is centered about 16 kilometers east of the Pitarrilla project and covers an extensive system of gold- and silver-bearing quartz veins and related hydrothermal alteration. Several of these vein targets have now been tested, with approximately 12,587 meters being drilled from 22 boreholes during 2011. Early in the campaign, drill-holes intersected gold mineralization in epithermal quartz veining that prompted the addition of seven holes to the original program.

During the fourth quarter of 2011 however, the Company elected not to continue its option to purchase the Navidad claim group at the center of the Nazas project area and expensed previously capitalized exploration costs of $4.5 million. Although mineralization was encountered, assay results were inadequate to justify the high costs to maintain the option. Notwithstanding the decision on the Navidad claim group, the geological information provided by this year’s drilling campaign will be utilized in the planning of future drilling on the other two Nazas properties. The goal at Nazas continues to be the discovery of precious metal-rich polymetallic mineralization.

Critical Accounting Policies and Estimates

Basis of preparation and accounting policies

The Company has prepared its consolidated financial statements in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”). IFRS represents standards and interpretations approved by the IASB and are comprised of IFRS, International Accounting Standards (“IAS’s”), and interpretations issued by the IFRS Interpretations Committee (“IFRIC’s”) and the former Standing Interpretations Committee (“SIC’s”). The Company adopted IFRS in accordance with IFRS 1 – First-time Adoption of International Financial Reporting Standards (“IFRS 1”) with a transition date of January 1, 2010. The consolidated financial statements have been prepared in accordance with IFRS standards and interpretations effective as of December 31, 2011. Note 2 to the consolidated financial statements for the year ended December 31, 2011 provides details of significant accounting policies and accounting policy decisions as a result of IFRS 1 optional exemptions, for significant or potentially significant areas that have had an impact on the Company’s financial statements on transition to IFRS or may have an impact in future periods.

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There were no changes to the accounting policies applied by the Company to each of the 2011 quarterly unaudited interim consolidated financial statements, to those applied to the consolidated financial statements for the year ended December 31, 2011.

Critical Accounting Estimates

The preparation of 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.

Review of asset carrying values and impairment assessment In accordance with the Company’s accounting policy each asset or cash generating unit is evaluated every reporting period to determine whether there are any indications of impairment. If any such indication exists, a formal estimate of recoverable amount is performed and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount. The recoverable amount of an asset or cash generating group of assets is measured at the higher of fair value less costs to sell and value in use.

The determination of fair value and value in use requires management to make estimates and assumptions about expected production, sales volumes, commodity prices, reserves, operating costs, closure and rehabilitation costs and future capital expenditures. The estimates and assumptions are subject to risk and uncertainty, hence there is the possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the assets. In such circumstances some or all of the carrying value of the assets may be further impaired or the impairment charge reduced with the impact recorded in the income statement.

Determination of mineral reserve and mineral resource estimates The Company estimates its mineral reserves and mineral resources based on information compiled by qualified persons as defined by NI 43-101. Reserves determined in this way are used in the calculation of depreciation, amortization 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 mineral 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 reserve estimates being revised. Such changes in reserves could impact on depreciation and amortization rates, asset carrying values and provisions for close down and restoration costs.

During the year ended December 31, 2011 the Company presented an updated mineral reserve and mineral resource at its Pirquitas mine in Argentina, this will increase depletion and depreciation charges in future periods by reducing the life of mine and expected tonnes of production.

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 are fundamental to this calculation.

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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 and all associated selling costs. The determination of both estimated future sales price and production costs requires significant assumptions that may significantly impact the stated value of the Company’s inventory.

Close down and restoration provisions Close down and restoration costs are a normal consequence of mining, and the majority of close down and restoration expenditures are incurred near the end of the life of the mine. The Company’s accounting policy requires the recognition of such provisions when the obligation occurs. The initial provisions are periodically reviewed during the life of the operation to reflect known developments, e.g. updated cost estimates and revisions to the estimated lives of operations. Although the ultimate cost to be incurred is uncertain, the Company estimates its costs based on studies using current restoration standards and techniques. The initial closure provisions together with changes, other than those arising from the unwind of the discount applied in establishing the net present value of the provision, are capitalized within property plant and equipment and depreciated over the lives of the assets to which they relate.

The ultimate magnitude of these costs is uncertain, and cost estimates can vary in response to many factors including changes to the relevant legal requirements, the emergence of new restoration techniques or experience on other mine sites. The expected timing of expenditure can also change, for example in response to changes in ore reserves or production rates or economic conditions. As a result there could be significant adjustments to the provision for close down and restoration, which would affect future financial results.

During the fourth quarter of the year ended December 31, 2011, the Company recorded a change in its estimate for close down and restoration from the preliminary findings of a mine closure plan for its Pirquitas mine in Argentina, that is scheduled for completion in 2012. The estimate increased by $33.8 million, and this was a prospective change that no impact on the Consolidated Statement of Income for the year ended December 31, 2011. There is considerable measurement uncertainty with a provision of this nature from the timing of cash flows, inflationary environment and impact of exchange rates. The final obligation could vary materially from that presented which would impact future results.

Determination of the fair value of share-based compensation The fair value of stock options and other forms of share-based compensation granted is computed to determine the relevant charge to the income statement, and liability if applicable. In order to compute this fair value the Company uses different option pricing models that inherently require management to make various estimates and assumptions in relation to the expected life of the award, expected volatility, risk-free rate and forfeiture rates.

Deferred tax assets and liabilities The determination of the Company’s tax expense for the period and deferred tax assets and liabilities involves significant estimation and judgment by management. In determining these amounts, management interprets tax legislation in a variety of jurisdictions and makes estimates of the expected timing of the reversal of deferred tax assets and liabilities. Management also makes estimates of future earnings which affect the extent to which potential future tax benefits may be used. The Company is subject to assessments by various taxation authorities, which may interpret legislation differently. These differences may affect the final amount or the timing of the payment of taxes. The Company provides for such differences, where known, based on management’s best estimate of the probable outcome of these matters.

The Company has an unrecognised deferred tax asset in respect of potential foreign tax credits that may be used to offset taxes paid in Argentina. These have not been recognised due to measurement uncertainty over the extent and timing of any potential benefit. If recognized this will create a recovery of income tax expense in that period.

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Transition to International Financial Reporting Standards

On January 1, 2011 the Canadian Accounting Standards Board replaced Canadian GAAP with IFRS for publically accountable enterprises, with a transition date of January 1, 2010, due to requirement to present comparative financial information. IFRS represents standards and interpretations approved by the IASB and are comprised of IFRS’s, IAS’s, IFRIC’s and the former SIC’s.

Notes 2 and 26 to the consolidated financial statements for the year ended December 31, 2011 provide details of key Canadian GAAP to IFRS differences, accounting policy decisions and IFRS 1, optional exemptions for significant or potentially significant areas that have had an impact on the Company’s financial statements on transition to IFRS or may have an impact in future periods.

The Company completed its conversion from Canadian GAAP to IFRS through a transition plan that involved scoping and planning, an assessment of differences, implementation and post-implementation. The post-implementation phase involves the maintenance of IFRS-compliant financial data and processes for 2011 and the future.

The conversion from Canadian GAAP to IFRS has resulted in changes to the Company’s accounting policies, financial reporting processes, incremental controls relating to the conversion process and additional training requirements. The conversion did not have any impact on the Company’s key internal performance ratios or compensation plans.

The following outlines the impact of transition to IFRS on shareholders’ equity and total comprehensive income.

Shareholders’ Equity Impact

As a result of accounting policy choices selected and changes that were required to be made under IFRS, the Company recorded a reduction in shareholders’ equity of $98.0 million as at January 1, 2010. A full reconciliation of this adjustment is included in the consolidated financial statements for the year ended December 31, 2011. In accordance with IFRS 1, the Company was required to maintain all previous estimates and assumptions in existence including but not limited to metal prices, discount rates, capital and operating costs, reserves and resources.

The following is a summary of the adjustments to shareholders’ equity as at December 31, 2010 and January 1, 2010 under IFRS (all of which are outlined in the notes to the consolidated financial statements):

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Comprehensive Income Impact

As a result of accounting policy choices selected and changes that were required to be made under IFRS, the Company has recorded a decrease in total comprehensive income of $6.0 million for the year ended December 31, 2010.

The following is a summary of the adjustments to comprehensive income for the year ended December 31, 2010 under IFRS (all of which are outlined in the notes to the consolidated financial statements), expressed in thousands of USD:

The Company revised its previously published transition adjustment for deferred tax liabilities in relation to the tax basis of certain Argentine assets relating to foreign exchange and other adjustments. The impact was an increase in deferred tax liabilities of $0.7 million as at January 1, 2010 and a further increase of $5.5 million as at December 31, 2010 with a corresponding increase in the tax expense for the year. These adjustments are not material to the previously presented financial information.

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Cash Flow Impact

The transition from Canadian GAAP to IFRS had no significant impact on cash flows generated by the Company.

Control Activities

For all changes to policies and procedures that have been identified, the effectiveness of internal controls over financial reporting and disclosure controls and procedures have been assessed and any changes have been implemented. In addition, controls over the IFRS changeover process have been implemented, as necessary. The Company has identified and implemented the required accounting process changes that resulted from the application of IFRS accounting policies and these changes were not significant. The Company has updated the design, implementation and documentation of the internal controls over accounting process resulting from the application of IFRS accounting policies. The existing control framework has been applied to the IFRS changeover process. All accounting policy changes, transitional exemption elections and transitional financial position impacts were subject to review by senior management and the Audit Committee of the Board of Directors.

Business Activities and Key Performance Measures

The Company has reviewed the impacts of the IFRS transition project on its key performance measures and compensation arrangements, in particular those that are calculated based on indicators in the financial statements, and determined that there was no significant impact.

Information Technology and Systems

The IFRS transition project did not have a significant impact on information systems for the convergence periods, nor is it expected that significant changes are required in the post-convergence periods.

Post-Implementation

The post-implementation phase will involve continuous monitoring of changes in IFRS in future periods. It has been noted that the standard-setting bodies that determine IFRS have significant ongoing projects that could impact the IFRS accounting policies that the Company has selected. In particular, there may be additional new or revised IFRSs or IFRICs in relation to consolidation, financial instruments, leases, revenue recognition and stripping costs in the production phase of a surface mine. The IASB is also currently working on an extractive industries project, which could significantly impact the financial statements of the Company primarily in the areas of capitalization of exploration costs and disclosures. Processes are in place to ensure that potential changes are monitored and evaluated. The impact of any new IFRSs and IFRIC Interpretations will be evaluated as they are drafted and published.

Future Accounting Changes

IFRS 9, Financial Instruments (“IFRS 9”) was issued in November 2009 and contained requirements for financial assets. This standard addresses classification and measurement of financial assets and replaces mulitiple category and measurement models in IAS 39 for debt instruments with a new mixed measurement model having only two categories: amortized cost and FVTPL. IFRS 9 also replaces the models for measuring equity instruments, and such investments are either recognised at FVTPL or at fair value through other comprehensive income. Where such equity instruments are measured at fair value through other comprehensive income, dividends are recognised in profit or loss to the extent not clearly representing a return of investment; however, other gains and losses (including impairments) associated with such instruments remain in accumulated comprehensive income indefinitely.

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Requirements for financial liabilities were added in October 2010 and they largely carried forward existing requirements in IAS 39, Financial Instruments – Recognition and Measurement, except that fair value changes due to credit risk for liabilities designated at fair value through profit and loss would generally be recorded in other comprehensive income.

This standard is required to be applied for accounting periods beginning on or after January 1, 2013, with earlier adoption permitted. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

On May 12, 2011 the IASB issued the following statements:

Each of these standards has an effective date for annual periods beginning on or after January 1, 2013, early adoption of any of these standards is permitted only if the other standards are also adopted early.

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IFRS 13 Fair Value Measurement (“IFRS 13”) was issued on May 12, 2011 and establishes a single framework for measuring fair value where it is required by other standards. IFRS 13 applies to all transactions (whether financial or non-financial) for which IFRS requires or permits fair value measurements, with the exception of share-based payment transactions accounted for under IFRS 2 Share-based Payment and leasing transactions within the scope of IAS 12 Leases, and measurements that have some similarities to fair value but are not fair value such as net realisable value under IAS 2 Inventories or value in use under IAS 36 Impairment of assets. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price).

This standard is required to be applied for accounting periods beginning on or after January 1, 2013, with earlier adoption permitted. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

On June 16, 2011 the IASB issued Presentation of Items of Other Comprehensive Income (amendments to IAS 1, Presentation of Financial statements). The amendments require the grouping of items presented in other comprehensive income into items that might be reclassified to profit or loss in subsequent periods and items that will not be reclassified to profit or loss in subsequent periods. The amendments are effective for annual periods beginning on or after July 1, 2012, with full retrospective application. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

In October 2011 the IASB issued IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine (“IFRIC 20”). This interpretation provides guidance on the accounting for the costs of stripping activity in the production phase when two benefits accrue to the entity: usable ore that can be used to produce inventory and improved access to further quantities of material that will be mined in future periods. IFRIC 20 is applicable for annual periods beginning on or after January 1, 2013 with early adoption permitted. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

Non-GAAP Financial Performance Measures

The non-GAAP financial measures presented do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be directly comparable to similar measures presented by other issuers.

Non-GAAP financial measures – Cash cost per ounce of silver

The Company uses the non-GAAP measures of direct mining cost, total cash cost and total production cost per ounce of silver to manage and evaluate operating performance. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Company’s performance and ability to generate cash flows. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

This classification is based upon The Silver Institute’s production cost standard as endorsed on June 16, 2011. Previous to this date there was no standardized presentation guidance and the Company reported cash production cost, cash operating cost and total production cost, and moved to The Silver Institute’s production cost standard in its disclosures in 2011 in order to facilitate more uniform disclosures within the industry. All comparatives have been updated to reflect the current presentation standard.

The following table provides a reconciliation of direct mining costs, total cash costs and total production costs to cost of sales, as reported in the Company’s Consolidated Statement of Income:

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Non-GAAP financial measures – adjusted income (loss)

The Company has included the non-GAAP financial performance measure of adjusted net income (loss) and adjusted basic earnings (loss) per share. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors may want to use this information to evaluate the Company’s performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

The following table provides a reconciliation of adjusted net loss to the consolidated financial statements:

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Financial Instruments and Related Risks

The Company is exposed to a variety of financial risks as a result of its operations, including market risk (which includes price risk, currency risk and interest rate risk), credit risk and liquidity risk. The Company’s overall risk management strategy seeks to reduce potential adverse effects on the Company’s financial performance. Risk management is carried out under policies approved by the Board of Directors.

The Company may, from time to time, use foreign exchange contracts, commodity price contracts and interest rate swaps to manage its exposure to fluctuations in foreign exchange, metal prices and interest rates. The Company does not have a practice of trading derivatives. In the past, the Company’s 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.

The risks associated with the Company’s financial instruments, and the policies on how the Company mitigates those risks are set out below. This does not constitute a fulsome discussion of all risks facing the Company.

See Item 11“ Quantitative and Qualitative Disclosures About Market Risk” for a discussion about market risk.

Credit Risk

Credit risk is the risk that a third party might fail to discharge its obligations under the terms of a financial contract. The Company’s credit risk is limited to the collectability of trade receivables in the ordinary course of business and the quality of its financial investments.

Credit risk related to financial institutions and cash deposits The Company’s policy is only to utilize highly-rated financial institutions and only to invest in government securities. The Company considers the risk of loss associated with cash deposits to be low.

Credit risk related to trade receivables The Company is subject to significant concentrations of credit risk related to trade receivables because almost all of its sales through 2011 were to a single customer. The Company has not, however, recorded an allowance against trade receivables because it is confident of the collectability based on the nature of its customer and all balances owed have been settled in full when due. In order to mitigate this risk, the Company ensures a minimum creditworthiness of customers, and has entered into spot sales agreements with additional customers in 2012.

Credit risk related to other financial assets All other receivable balances are expected to be collectible in full due to the nature of the counterparties and/or a previous history of collectability.

The Company also has credit risk through its significant value added tax balance that is collectible from the government of Argentina. Due to the legislative rules and complex collection process the asset has been classified as non-current. The Company believes that this balance is collectible in full.

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The Company’s maximum exposure to credit risk at December 31was as follows:

At December 31, 2011 no amounts were held as collateral.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its obligations over financial instruments as they fall due. The Company manages its liquidity risk through a rigorous planning and budgeting process, which is reviewed and updated on a regular basis, to help determine the funding requirements to support the Company’s current operations, expansion and development plans, and by managing its capital structure. The Company’s objective is to ensure that there are sufficient committed financial resources to meet its business requirements for a minimum of twelve months.

In the opinion of management, working capital at December 31, 2011 together with future cash flows from operations is sufficient to support the Company’s commitments through 2012. For periods beyond 2012 the current working capital and cash flows from operations are expected to support further development, exploration and growth.

          B.        Liquidity and Capital Resources

At December 31, 2011, the Company had approximately $329.1 million of cash and cash equivalents, an increase of $96.7 million from December 31, 2010. This cash is considered sufficient to meet the Company’s working capital requirements and debt obligations.

In addition to the cash and cash equivalents, at December 31, 2011 the Company had positive working capital of $70.0 million, comprised of $33.5 million in marketable securities and inventory of $94.7 million, offset by current liabilities of $77.6 million. The high finished goods inventory balance of $44.5 million at year end was due to the lower level of sales in the second half of 2011 while new long-term sales contracts were being negotiated; this is expected to be sold in the first half of 2012. Current liabilities constitute taxes payable of $22.5 million, and other payables and accrued liabilities in the normal course of business.

At December 31, 2011 the Company also owned 24.7 million shares of Pretium which are held at cost on the Statement of Financial Position, but had a market value in excess of $300 million, and subsequent to the year-end by February 29, 2012 the market value of the Pretium holding has risen further, to in excess of $400 million.

The Company’s liquidity position improved compared to the prior year end due to net cash inflows of $96.7 million, for total cash and cash equivalents at December 31, 2011 of $329.1 million. Of this $322.7 million is held in Canada and the United States.

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The cash inflows during the year were largely the result of the sale of Pretium shares in April for cash proceeds of $112.4 million, the sale of the Bowdens project generating $39.4 million, and $20.1 million from 1.0 million stock options exercised. Operating cash flows from the Pirquitas mine largely offset corporate costs and interest payments, while exploration and capital costs totalled $65.3 million.

The following table summarizes the Company’s financial liabilities, operating and capital commitments at December 31, 2011:

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 undisclosed contractual maturities of our financial liabilities and operating and capital commitments, at December 31:

(i) Convertible notes mature in 2028 but are redeemable in part or in full at the option of the holder on March 1 of each of 2013, 2018 and 2023, or upon certain fundamental corporate changes. They are also redeemable by the Company in part or in full on and after March 5, 2013. The notes bear interest at 4.5% per annum and are convertible into common shares upon specified events at a fixed conversion price of approximately $43.33 per common share.

The Company’s financial position at December 31, 2011, and the operating cash flows that are expected over the next twelve months are believed, in the Company’s opinion to be sufficient to fund currently-planned capital and exploration expenditures in 2012 and to discharge liabilities as they come due.

Capital Resources

The capital of the Company consists of items included in shareholders’ equity and debt, net of cash and cash equivalents as follows:

At December 31, 2011 there was no externally-imposed capital requirement to which the Company is subject and with which the Company has not complied.

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The Company is advancing its Pitarrilla project in Mexico with the objective of completing a feasibility study by mid-2012. If the feasibility study results in a positive construction decision the Company’s capital expenditure requirements are expected to increase materially in late 2012 and for the next few years.

As at December 31, 2011 the Company had approximately 80.7 million common shares outstanding and 1.9 million stock options outstanding which are exercisable into common shares at exercise prices ranging between C$11.50 and C$40.62.

Outstanding share data

The authorized capital consists of an unlimited number of common shares without par value. As at March 8, 2012, the following common shares and options were outstanding:

The Company’s Board of Directors adopted a Shareholder Rights Plan on March 9, 2012 as more fully described in the Company’s news release dated March 12, 2012. See Item 9.A. “Offer and Listing Details”.

          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

The key trend impacting the Company’s results are the Company’s operations at the Pirquitas Mine. The mine achieved commercial production on December 1, 2009, with 2010 and 2011 being the first full years of silver production resulting in the generation of revenue and cash flows. See Item 5.A. – “Operating Results”.

The Company’s results have also been significantly impacted by mineral property sales such as Silvertip and Snowfield/Bruckjack in 2010 and Bowdens in 2011 as described in this Annual Report.

          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”.

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          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, 2012, 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. 25
Our Directors and Senior Management

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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 is the Chair of our Corporate Governance and Nominating Committee. 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. Mr. Anglin is also a director of Emberclear Corp.

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., Augusta Resource Corporation and Wildcat Silver Corporation.

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.

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.

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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 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. Mr. Smith is also a director of Pretium Resources Inc.

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.

Gregory J. Martin

Mr. Martin joined Silver Standard on January 31, 2012 as our Senior Vice President and Chief Financial Officer. Mr. Martin is a finance executive with over 15 years in the mining sector. Prior to joining Silver Standard, he held senior finance and corporate development roles with NovaGold Resources, Finning International, Zincore Metals and Placer Dome gaining significant international and South American experience. Mr. Martin holds an MBA from the University of Western Ontario and a Bachelor of Applied Sciences in Civil Engineering from the University of British Columbia.

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.

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Andrew Sharp

Mr. Sharp joined Silver Standard in October, 2011 as our Vice President, Technical Services. Mr. Sharp has over 25 years of experience in the mining industry covering 8 countries and 5 continents. Prior to joining Silver Standard, he held positions with Great Panther, Pan American Silver, Ok Tedi Mining and Worsley Alumina among others. Over the last 15 years he has held management roles in the areas of mine engineering, grass roots and brown fields exploration, metallurgical studies and plant design, UG mining, open cut mining, and site general management. His later experience has centered on site management roles and project evaluation. Mr. Sharp graduated with honors from the Kalgoorlie School of Mines with a degree in mine engineering.

Ron Burk

Mr. Burk has over 20 years of experience as a professional geologist, and has designed and supervised exploration programs in Canada, Mexico, Peru, Argentina and Brazil. Prior to joining Silver Standard as Chief Geoscientist in 2004, he spent 15 years working for Teck Resources as a geologist in various international projects. Mr. Burk holds a Bachelor of Geological Engineering from the University of Toronto and a Master of Science in Engineering from Queen's University.

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

Ms. Riddell has served as our Vice President, Corporate Secretary and General Counsel since October, 2009. 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. Ms. Riddell 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”):

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As at December 31, 2011, the end of the Company’s most recently completed financial year, we had six Named Executive Officers, whose names and positions held with the Company are set out under the heading “Summary Compensation Table” below. Included in our Named Executive Officers are Tom S.Q. Yip who served as our Vice President, Finance and Chief Financial Officer until August 31, 2011 and Matthew Freeman, who served as our interim Chief Financial Officer from August 31, 2011 until January 31, 2012.

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 in 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 experiencing a very competitive labour market and this situation is expected to continue for the foreseeable future as the talent pool ages and the supply of experienced talent continues to decline. As the Company expands the number of operating mines in its portfolio, the necessary experienced talent will be drawn primarily 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 for its senior executives 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 and 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 our defined peer group (discussed below) and market place where we compete for talent. Salaries are reviewed annually and base salaries 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.

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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 expected performance set out in the Company’s business plan. The CEO develops individual goals for each member of the senior management team. Individual goals for the CEO are developed by the Board of Directors. We continue to strive to provide superior compensation for employees who deliver superior results. The CEO and the Compensation Committee also retain the right to exercise discretion when making incentive compensation recommendations to the Board to reflect extraordinary events and or market conditions.

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. Prior to 2010, our LTI program consisted of only Company stock options. In 2010, our Board of Directors approved a new LTI program, which was introduced in January 2011. The new LTI program for our executive participants includes Performance Share Units (“PSUs”) in addition to stock options. The PSUs 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 LTI plan, executive participants will be eligible for PSU grants on an annual basis, subject to Board approval. The PSUs 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” (“TSR”) calculation at the end of the three year vesting period, in comparison to the TSR of our defined peer group. The peer group has been established by the Board of Directors and will be reviewed annually for continued appropriateness. Our goal continues to be motivation of our executives for the long-term by balancing appropriate reward / risk for both the individual and the Company.

The criteria for choosing the comparator group is as follows: (a) companies in the precious metals segment, with similar revenue, market capitalization, operations and projects (b) companies that reflect our competition for investment dollars.

In 2011 our TSR Comparator group included Alamos Gold Inc.; Allied Nevada Gold Corp.; AuRico Gold Inc.; Compania de Minas Buenaventura; Centamin Egypt Ltd.; Coeur d’Alene Mines Corporation; European Goldfields; Fresnillo plc; Golden Star Resources Inc.; Hecla Mining Company; Hochschild Mining; Iamgold Corporation; Ivanhoe Mines Ltd.; New Gold Inc.; Northgate Minerals; Novagold Resources Inc.; Minefinders; Pan American Silver Corp.; the Silver Price; Silver Wheaton Corp. and Silvercorp Metals Inc.

The Board reviews the TSR Comparator Group on an annual basis and adjusts the group based on continued applicability and mergers and acquisitions in the market place.

In 2012, we have adjusted our TSR Comparator Group to include: Alexco Resource Corp.; Endeavour Silver Corp.; First Majestic Silver Corp.; Fortuna Silver Mines Inc.; and International Minerals Corp.; based on the criteria listed above, and our desire to increase the size of our comparator group. We have removed from the TSR Comparator Group European Goldfields and Northgate Minerals (due to acquisitions) and Ivanhoe Mines Ltd. This adjusted TSR Comparator Group will be used to calculate the value of PSUs which were granted January, 2012.

Under the Company’s Stock Option Plan, grants are made annually at the 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.

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Under the Company’s LTI plan, PSU and stock option grants have equal dollar value and the total value of grants is based on the individual’s base salary and position in the Company.

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 on a periodic basis to ensure market competitiveness.

There were no identified risks arising from the Company's compensation policies and practices that are reasonably likely to have a material adverse effect on the Company.

Named Executive Officer Compensation

Compensation for each of our Named Executive Officers is comprised of a base salary, a short term incentive award, a long-term incentive award and non-cash compensation. In general terms, our compensation program is intended to operate in an integrated manner to meet company objectives.

Base Salary

The base salary of our Named Executive Officers is designed to attract and retain individuals who can contribute to our growth as an operating mining company. During the last several years, competition among resource companies for skilled executives has been intense and the base salaries of recently hired Named Executive Officers have been established through negotiation in the market place. Base salaries are reviewed annually to reflect performance and market conditions if appropriate. For 2012, 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 compensation data provided by the Hay Group on our peer group of companies and the PwC Canadian mining survey of base salaries. In 2010, our Compensation Committee established and reviewed our peer group of companies, against which to benchmark the base salaries of our Named Executive Officers. The selection of our peer group was based on two principal criteria; (1) Companies that are similar to Silver Standard in terms of roles, operations, locations, staff levels, projects etc.; and (2) Companies which are a potential source of executive talent. The peer group for 2012 includes Agnico-Eagle Mines Ltd., Aurico, First Majestic Silver Corp., GoldCorp., NovaGold, Teck Resources, Yamana Gold, IAMGOLD Corp., Fresnillo Mining, QuadraFNX Mining Ltd., Centerra Gold Inc., Eldorado Gold Corp., HudBay Minerals Inc., Pan American Silver Corp., Thompson Creek Metals Co. Inc., Stillwater Mining Co., New Gold Inc., Coeur d’ Alene Mines Corp., Golden Star Resources Ltd., Hecla Mining Co., Eastern Platinum Ltd., European Goldfields Ltd., Ivanhoe Mining Ltd., and Lundin Mining. The Company will continue to monitor relevant market data and our peer group, to ensure competitiveness of our base salaries for Named Executive Officers in the marketplace.

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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, and approved by the Board. 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 each Named Executive Officer. Cash bonuses were awarded to our Named Executive Officers, based on the Company’s achievement of corporate objectives as well as achievement of their own personal objectives that were established at the start of the year, as determined by our CEO and the Compensation Committee and approved by the board. 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 2011 were measured and based on the following factors: production of ounces of silver at the Pirquitas Mine; operating costs; operating cash flow; completion of feasibility studies for some of our mineral projects; exploration reserves increase; reduction of “High Potential Incidents” (“HPI”) across the Company; and a reduction in environmental and community relations incidents. In 2011, it was determined that the Company achieved 45% of its corporate objectives. The Company overachieved on its HPI objective, achieved its exploration and community relations targets, but did not achieve expectations on production, operating cost, feasibility studies and environmental objectives.

Individual Performance for Named Executive Officers

For the Named Executive Officers, the individual performance component is weighted at 30% of the bonus potential, except for Matthew Freeman whose performance component is weighted at 50%, with the ability to over achieve based on accomplishments of the individual (described below). For 2011 the Compensation Committee recommended to the Board that discretion be applied to awards for the individual performance component of our plan to reflect the significant effort of our Named Executive Officers in addressing unique operating circumstances and to build the Company foundation for future growth, irrespective of the short-term impact on financial results. The Compensation Committee did not alter our plan with respect to the corporate performance component.

John Smith – President and Chief Executive Officer is evaluated on the basis of the Company’s overall long and short term performance. Significant progress was made in recruiting executives and technical teams as well as making changes at the Pirquitas Mine that positions the mine for the future. He also pursued alternative strategic options for several projects in our development pipeline.

Joe Phillips, Senior Vice President exceeded target on his personal objectives in 2011 by implementing substantial improvements at our operations, expanding our development options with respect to both our Pitarrilla and San Luis projects and upgrading and increasing our talent within the operations / development group.

John W. DeCooman, Vice President exceeded target on his personal objectives in 2011 by selling our non-core Bowdens asset for a substantial gain, setting the stage for entering into both short and long term contracts to sell concentrate on terms more favorable than those achieved in the past, and upgrading our Investor Relations function and our mergers and acquisition capability.

Tom Yip, Vice-President and Chief Financial Officer and Silver Standard entered into a Transition Agreement under which Mr. Yip did not receive a 2011 bonus.

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Matthew Freeman, Interim Chief Financial Officer, exceeded target on his personal objectives for 2011. As noted, Mr. Freeman was our interim CFO for part of the 2011 year and contributed significantly to Silver Standard directing the preparation of monthly, quarterly and year-end financial reports as well as leading our annual budgeting process. It should be noted that Mr. Freeman participates in a non-executive short-term incentive plan and his personal weighting is 50%.

David Smith, Vice President exceeded target on his personal objectives for 2011 by leading the recruitment of several new senior executives for Silver Standard, implementing executive leadership development and communication programs and establishing the framework for labour relations at our mine in Mexico.

For 2011, the Compensation Committee monitored and made improvements to the 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 objective setting process. 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.

Long Term Incentive Awards

Our Long-Term Incentive program utilizes both Stock Options and PSUs. 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. The term for exercising stock options is seven years.

In January 2011, stock options and PSUs were granted to our Named Executive Officers with the exception of Mr. Freeman. 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 taking into account individual performance, targets under our approach to LTI, participant’s ability to contribute to our long term growth and the need to retain our Named Executive Officers. Based on this discussion and our plan design, Named Executive Officer participants were granted options valued from 50% to 100% of their base salaries.

The Target Milestone for the PSUs granted is based on the TSR of Silver Standard over the Performance Period compared with the TSR of our comparator group of companies set forth above (the “Comparator Companies”) over the same time period. The Compensation Committee may revise the Comparator Companies, as appropriate from time to time and did so in 2012 for the reasons discussed above.

As soon as reasonably practicable following the end of the Performance Period (and in any event not later than 30 days following the end of the Performance Period), the Committee will determine the Company’s TSR performance and assign a percentage from 0 – 200% reflecting such performance as follows (the “Performance Percentage”):

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Subject to the PSU Plan, the number of PSUs granted vest in favour of each Designated Participant on the Vesting Date equal to the number of PSUs granted to such Designated Participant multiplied by the Performance Percentage. The formula for granting PSUs to the Named Executive Officers’ is a target award of from 50% to 100% of base salary (50% for Vice Presidents, 75% for Senior Vice Presidents and 100% for the CEO) divided by the 5 day Volume Weighted Average Price (“VWAP”) prior to the date of the award.

The PSUs will also vest in the event of a termination upon a change of control. If the termination date is on or after the date which is one half way through the applicable performance period, all unvested PSUs are deemed to be vested PSUs based on an assumed performance percentage of 100% and shall be redeemed at a cash amount equal to the market value of the shares at the termination date. If the termination date is before the date which is one-half way through the Performance Period applicable to the PSUs held, all unvested PSUs shall immediately be deemed to be Vested PSUs as of the termination date based on an assumed Performance Percentage of 100 per cent and the Company shall redeem such vested PSUs by paying, as of the redemption date, a cash amount calculated by multiplying the Market Value of such vested PSUs as of the termination date by the proportion of the Performance Period which has elapsed as of the termination date. In the event of a Change of Control where an acquiror of the Company does not agree to assume all of the obligations of the Company under the PSU Plan, or the Committee determines that such assumption is not consistent with the objectives of the PSU Plan, all unvested PSUs held shall immediately be deemed to be vested PSUs as of the effective date of the Change of Control based on an assumed Performance Percentage of (a) 100 per cent or (b) any percentage specifically determined by the Committee for this purpose and the Company shall redeem such vested PSUs by paying to each Designated Participant, as of the Redemption Date, a cash amount equal to such vested PSUs calculated by multiplying (a) the Market Value of such vested PSUs as of the effective date of the Change of Control by (b) the proportion of the Performance Period that has elapsed as of the effective date of the Change of Control.

No Named Executive Officer or director has purchased any financial instruments (such as prepaid variable forward contracts, equity swaps, collars, or units of exchange funds) designed to hedge or offset a decrease in the market value of the equity-based securities granted as compensation or held, directly or indirectly, by the Named Executive Officer or director.

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Performance Graph

The following chart compares the total cumulative shareholder return for C$100 invested in the Company’s common shares 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.

Silver Standard Resources Inc.
Comparison of Five Year Total Common Shareholder’s Return
(as at December 31 of each year)