<SEC-DOCUMENT>0001062993-11-001110.txt : 20110323
<SEC-HEADER>0001062993-11-001110.hdr.sgml : 20110323
<ACCEPTANCE-DATETIME>20110322193524
ACCESSION NUMBER:		0001062993-11-001110
CONFORMED SUBMISSION TYPE:	40-F
PUBLIC DOCUMENT COUNT:		19
CONFORMED PERIOD OF REPORT:	20101231
FILED AS OF DATE:		20110323
DATE AS OF CHANGE:		20110322

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ENDEAVOUR SILVER CORP
		CENTRAL INDEX KEY:			0001277866
		STANDARD INDUSTRIAL CLASSIFICATION:	GOLD & SILVER ORES [1040]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			A1
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		40-F
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-33153
		FILM NUMBER:		11704998

	BUSINESS ADDRESS:	
		STREET 1:		700 WEST PENDER STREET
		STREET 2:		SUITE 301
		CITY:			VANCOUVER
		STATE:			A1
		ZIP:			V6C 1G8
		BUSINESS PHONE:		604-685-9775

	MAIL ADDRESS:	
		STREET 1:		700 WEST PENDER STREET
		STREET 2:		SUITE 301
		CITY:			VANCOUVER
		STATE:			A1
		ZIP:			V6C 1G8

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ENDEAVOUR GOLD CORP
		DATE OF NAME CHANGE:	20040128
</SEC-HEADER>
<DOCUMENT>
<TYPE>40-F
<SEQUENCE>1
<FILENAME>form40f.htm
<DESCRIPTION>ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2010
<TEXT>
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   <TITLE>Endeavour Silver Corp.: Form 40F - Filed by newsfilecorp.com</TITLE>
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<P align=center><B><FONT size=5>UNITED STATES </FONT><BR></B><B><FONT
size=5>SECURITIES AND EXCHANGE COMMISSION </FONT><BR>Washington, D.C. 20549
</B></P>
<P align=center><B><FONT size=5>FORM 40-F </FONT></B></P>
<P align=center>[ ]<B> REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934 OR </B></P>
<P align=center>[ x ] <B>ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 </B></P>
<P align=center><B>For the fiscal year ended <u>December 31, 2010 </u></B></P>
<P align=center><B>Commission file number: <u>001-33153 </u></B></P>
<P align=center><img src="endeavourlogo.gif" width="289" height="75"></P>
<P align=center><B><U><FONT size=5>ENDEAVOUR SILVER CORP.</FONT></U></B><B>
<BR></B>(Exact Name of Registrant as Specified in its Charter) </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=center><U><B>British Columbia </B></U></TD>
    <TD width="33%" align=center><U><B>1040 </B></U></TD>
    <TD width="33%" align=center><U><B>N/A </B></U></TD></TR>
  <TR vAlign=top>
    <TD align=center>(Province or other jurisdiction of incorporation or
      organization) </TD>
    <TD width="33%" align=center>(Primary Standard Industrial Classification
      Code) </TD>
    <TD width="33%" align=center>(I.R.S. Employer Identification No.)
  </TD></TR></TABLE>
<P align=center><B>#301-700 West Pender Street <BR>Vancouver, British Columbia,
Canada V6C 1G8 <BR><U>(604) 685-9775 </U><BR></B>(Address and Telephone Number
of Registrant&#146;s Principal Executive Offices) </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=center><B>Dorsey &amp; Whitney LLP, </B></TD>
    <TD width="50%" align=center>Copies to: </TD></TR>
  <TR vAlign=top>
    <TD align=center><B>1400 Wewatta Street, Suite 400 </B></TD>
    <TD width="50%" align=center><B>Kenneth G. Sam </B></TD></TR>
  <TR vAlign=top>
    <TD align=center><B>Denver, Colorado 80202-5549 </B></TD>
    <TD width="50%" align=center><B>Dorsey &amp; Whitney LLP </B></TD></TR>
  <TR vAlign=top>
    <TD align=center><B><U>(303) 629-3400 </U></B></TD>
    <TD width="50%" align=center><B>1400 Wewatta Street, Suite 400 </B></TD></TR>
  <TR vAlign=top>
    <TD align=center>(Name, address (including zip code) and telephone number
      (including area </TD>
    <TD width="50%" align=center><B>Denver, Colorado 80202-5549 </B></TD></TR>
  <TR vAlign=top>
    <TD align=center>code) of agent for service in the United States) </TD>
    <TD width="50%" align=center><B><u>(303) 629-3400 </u></B></TD>
  </TR></TABLE>
<P align=center>Securities registered or to be registered pursuant to Section
12(b) of the Act: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=center><U>Title of Each Class: </U></TD>
    <TD width="50%" align=center><U>Name of Each Exchange On Which Registered:
      </U></TD></TR>
  <TR vAlign=top>
    <TD align=center><B>Common Shares, no par value </B></TD>
    <TD width="50%" align=center><B>NYSE </B></TD></TR></TABLE>
<P align=center>Securities registered or to be registered pursuant to Section
12(g) of the Act: <B>N/A </B></P>
<P align=center>Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act: <B>N/A </B></P>
<P align=center>For annual reports, indicate by check mark the information filed
with this form: <BR>[ x]&nbsp;&nbsp; Annual Information
Form&nbsp;&nbsp;&nbsp;&nbsp; [ x ] Audited Annual Financial Statements </P>
<P align=center>Indicate the number of outstanding shares of each of the
issuer's classes of capital or common stock as of the close of the period
covered by the annual report: As at December 31, 2010, <B>80,720,420 </B>common
shares of the Registrant were issued and outstanding. </P>
<P align=center>Indicate by check mark whether the Registrant by filing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934 (the "Exchange Act"). If "Yes" is marked, indicate the filing number
assigned to the Registrant in connection with such Rule. [&nbsp;&nbsp;
]&nbsp;&nbsp; Yes&nbsp; [x ]No </P>
<P align=center>Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act 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&nbsp;&nbsp; [&nbsp;&nbsp; ] No </P>
<P align=center>1 </P>
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width="100%" noShade>
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<P align=center>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
S-T (&#167;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).
[&nbsp;&nbsp; ] Yes [&nbsp;&nbsp;&nbsp;&nbsp; ]&nbsp; No </P>
<P align=center>2 </P>
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<P align=center><B>EXPLANATORY NOTE </B></P>
<P align=justify>Endeavour Silver Corp. (the &#147;Company&#148; or the &#147;Registrant&#148;) is a
Canadian issuer eligible to file its annual report pursuant to Section 13 of the
Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), on Form 40-F
pursuant to the multi-jurisdictional disclosure system of the Exchange Act. The
Company is a &#147;foreign private issuer&#148; as defined in Rule 3b-4 under the Exchange
Act. Equity securities of the Company are accordingly exempt from Sections
14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule
3a12-3.</P>
<P align=center><B>FORWARD-LOOKING STATEMENTS </B></P>
<P align=justify>This annual report on Form 40-F and the exhibits attached
hereto contain &#147;forward-looking statements&#148; within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
concern the Company&#146;s anticipated results and developments in the Company&#146;s
operations in future periods, planned exploration and development of its
properties, plans related to its business and other matters 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. </P>
<P align=justify>Statements concerning reserves and mineral resource estimates
may also be deemed to constitute forward-looking statements to the extent that
they involve estimates of the mineralization that will be encountered if the
Company&#146;s property is developed, and in the case of mineral reserves, such
statements reflect the conclusion based on certain assumptions that a mineral
deposit can be economically exploited. 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 &#147;expects&#148; or &#147;does not expect&#148;, &#147;is
expected&#148;, &#147;anticipates&#148; or &#147;does not anticipate&#148;, &#147;plans&#148;, &#147;estimates&#148; or
&#147;intends&#148;, or stating that certain actions, events or results &#147;may&#148;, &#147;could&#148;,
&#147;would&#148;, &#147;might&#148; or &#147;will&#148; (or the negative and grammatical variations of any of
these terms and similar expressions) be taken, occur or be achieved,) 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 which could cause actual events or results to
differ from those expressed or implied by the forward-looking statements,
including, without limitation: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>risks related to precious and base metal price fluctuations;
  <LI>risks related to fluctuations in the currency markets (particularly the
  Mexican peso, Canadian dollar and United States dollar);
  <LI>risks related to the inherently dangerous activity of mining, including
  conditions or events beyond our control; risks related to operating or
  technical difficulties in mineral exploration, development and mining
  activities
  <LI>uncertainty in our ability to fund the development of our mineral
  properties or the completion of further exploration programs;
  <LI>uncertainty as to actual capital costs, operating costs, production and
  economic returns, and uncertainty that our development activities will result
  in profitable mining operations;
  <LI>risks related to our reserves and mineral resource figures being estimates
  based on interpretations and assumptions which may result in less mineral
  production under actual conditions than is currently estimated; risks related
  to to diminishing quantities or grades of mineral reserves as our properties
  are mined;
  <LI>risks related to governmental regulations and obtaining necessary licenses
  and permits; </LI></UL>
<P align=center>3 </P>
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<UL style="TEXT-ALIGN: justify">
  <LI>risks related to our business being subject to environmental laws and
  regulations which may increase our costs of doing business and restrict our
  operations;
  <LI>risks related to our mineral properties being subject to prior
  unregistered agreements, transfers, or claims and other defects in title;
  <LI>risks related to inadequate insurance or inability to obtain insurance;
  <LI>risks related to our ability to successfully integrate acquisitions;
  <LI>uncertainty in our ability to obtain necessary financing;
  <LI>risks related to increased competition that could adversely affect our
  ability to attract necessary capital funding or acquire suitable producing
  properties for mineral exploration in the future;
  <LI>risks related to differences between U.S. and Canadian practices for
  reporting resources and reserves;
  <LI>risks related to many of our primary properties being located in Mexico,
  including political, economic, and regulatory instability; and
  <LI>risks related to our officers and directors becoming associated with other
  natural resource companies which may give rise to conflicts of interests.
</LI></UL>
<P align=justify>This list is not exhaustive of the factors that may affect our
forward-looking statements. Some of the important risks and uncertainties that
could affect forward-looking statements are described further in the exhibits
attached to this annual report on Form 40-F. Should one or more of these risks
and uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in the forward-looking
statements. The Company&#146;s forward-looking statements are based on beliefs,
expectations and opinions of management on the date the statements are made and
the Company does not assume any obligation to update forward-looking statements
if circumstances or management&#146;s beliefs, expectations or opinions change,
except as required by law. For the reasons set forth above, investors should not
place undue reliance on forward-looking statements. </P>
<P align=center><B>NOTE TO UNITED STATES READERS- <BR></B><B>DIFFERENCES IN
UNITED STATES AND CANADIAN REPORTING PRACTICES </B></P>
<P align=justify>The Company is permitted, under the multi-jurisdictional
disclosure system adopted by the United States Securities and Exchange
Commission (the &#147;SEC&#148;), to prepare this annual report in accordance with
Canadian disclosure requirements, which differ from those of the United States.
The Company has prepared its financial statements, which are filed as <U>Exhibit
2</U> to this annual report on Form 40-F, in accordance with Canadian generally
accepted accounting practices (&#147;GAAP&#148;), and they are subject to Canadian
auditing and auditor independence standards. They are not comparable to
financial statements of United States companies. Significant measurement
differences between Canadian GAAP and United States GAAP are described in Note
19 of the audited consolidated financial statements of the Company. Effectively
January 1, 2011, the Company will begin preparing its financial statements in
accordance with International Financial Reporting Standards. </P>
<P align=center><B>RESOURCE AND RESERVE ESTIMATES </B></P>
<P align=justify>The Company&#146;s Annual Information Form (&#147;AIF&#148;) filed as
<U>Exhibit 1</U> to this annual report on Form 40-F has been prepared in
accordance with the requirements of the securities laws in effect in Canada,
which differ from the requirements of United States securities laws. The terms
&#147;mineral reserve&#148;, &#147;proven mineral reserve&#148; and &#147;probable mineral reserve&#148; are
Canadian mining terms as defined in accordance with Canadian National Instrument
43-101 &#150; Standards of Disclosure for Mineral Projects (&#147;NI 43-101&#148;) and the
Canadian Institute of Mining, Metallurgy and Petroleum (the &#147;CIM&#148;) - <I>CIM
Definition Standards on Mineral Resources and Mineral Reserves</I>, adopted by
the CIM Council, as amended. These definitions differ from the definitions in
SEC Industry Guide 7 under the United States Securities Act of 1933, as amended
(the &#147;Securities Act&#148;).</P>
<P align=center>4 </P>
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<P align=justify>Under SEC Industry Guide 7 standards, a &#147;final&#148; or &#147;bankable&#148;
feasibility study is required to report reserves, the three-year historical
average price is used in any reserve or cash flow analysis to designate reserves
and the primary environmental analysis or report must be filed with the
appropriate governmental authority. </P>
<P align=justify>In addition, the terms &#147;mineral resource&#148;, &#147;measured mineral
resource&#148;, &#147;indicated mineral resource&#148; and &#147;inferred mineral resource&#148; are
defined in and required to be disclosed by NI 43-101; however, these terms are
not defined terms under SEC Industry Guide 7 and are normally not permitted to
be used in reports and registration statements filed with the SEC. Investors are
cautioned not to assume that any part or all of mineral deposits in these
categories will ever be converted into reserves. &#147;Inferred mineral resources&#148;
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 pre-feasibility studies, except in rare cases. Investors
are cautioned not to assume that all or any part of an inferred mineral resource
exists or is economically or legally mineable. Disclosure of &#147;contained ounces&#148;
in a resource is permitted disclosure under Canadian regulations; however, the
SEC normally only permits issuers to report mineralization that does not
constitute &#147;reserves&#148; by SEC Industry Guide 7 standards as in place tonnage and
grade without reference to unit measures. </P>
<P align=justify>Accordingly, information contained in this annual report on
Form 40-F and the documents incorporated by reference herein contain
descriptions of our mineral deposits that may not be comparable to similar
information made public by U.S. companies subject to the reporting and
disclosure requirements under the United States federal securities laws and the
rules and regulations thereunder. </P>
<P align=center><B>CURRENCY </B></P>
<P align=justify>Unless otherwise indicated, all dollar amounts in this annual
report on Form 40-F are in United States dollars. The exchange rate of Canadian
dollars into United States dollars, on December 31, 2010, based upon the noon
exchange rate as quoted by the Bank of Canada, was U.S.$1.00 = Cdn.$0.9999. </P>
<P align=center><B>ANNUAL INFORMATION FORM </B></P>
<P align=justify>The Company&#146;s AIF for the fiscal year ended December 31, 2010
is filed as <U>Exhibit 1</U> and incorporated by reference in this annual report
on Form 40-F. </P>
<P align=center><B>AUDITED ANNUAL FINANCIAL STATEMENTS </B></P>
<P align=justify>The audited consolidated financial statements of the Company
for the years ended December 31, 2010, 2009 and 2008, including the report of
the independent auditor with respect thereto, are filed as <U>Exhibit 2</U> and
incorporated by reference in this annual report on Form 40-F. For a
reconciliation of material measurement differences between Canadian and United
States GAAP, see Note 19 to the Company&#146;s audited consolidated financial
statements.</P>
<P align=center><B>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS</B></P>
<P align=justify>The Company&#146;s management&#146;s discussion and analysis (&#147;MD&amp;A&#148;)
is filed as <U>Exhibit 3</U> and incorporated by reference in this annual report
on Form 40-F.<B> </B></P>
<P align=center>5 </P>
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<P align=center><B>TAX MATTERS </B></P>
<P align=justify>Purchasing, holding, or disposing of the Company&#146;s securities
may have tax consequences under the laws of the United States and Canada that
are not described in this annual report on Form 40-F. </P>
<P align=center><B>CONTROLS AND PROCEDURES </B></P>
<P align=justify><I>Disclosure Controls and Procedures </I></P>
<P align=justify>At the end of the period covered by this annual report on Form
40-F for the fiscal year ended December 31, 2010, an evaluation was carried out
under the supervision of, and the with the participation of, the Company&#146;s
management, including its Chief Executive Officer (CEO) and Chief Financial
Officer (CFO), of the effectiveness of the design and operation of the Company&#146;s
disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange
Act). Based upon that evaluation, the Company&#146;s CEO and CFO have concluded that
the disclosure controls and procedures were effective to give reasonable
assurance that the information required to be disclosed by the Company in
reports that it files or submits under the Exchange Act is (i) recorded,
processed, summarized and reported, within the time periods specified in the
SEC&#146;s rules and forms, and (ii) accumulated and communicated to management,
including its principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure. </P>
<P align=justify><I>Management&#146;s Report on Internal Control over Financial
Reporting </I></P>
<P align=justify>Management is responsible for establishing and maintaining
adequate internal control over financial reporting, as defined in Rules
13a-15(f) under the Exchange Act. A company&#146;s internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles. </P>
<P align=justify>A company&#146;s internal control over financial reporting includes
those policies and procedures that (i) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company&#146;s assets that could have a
material effect on the financial statements. It should be noted that a control
system, no matter how well conceived or operated, can only provide reasonable
assurance, not absolute assurance, that the objectives of the control system are
met. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with policies and procedures may
deteriorate. </P>
<P align=justify>Management, including the CEO and CFO, assessed the
effectiveness of the Company&#146;s internal control over financial reporting as of
December 31, 2010. In making this assessment, management used the criteria set
forth in the Internal Control Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Based on its
assessment, management has concluded that, as of December 31, 2010, the
Company&#146;s internal control over financial reporting was effective and no
material weaknesses in the Company&#146;s internal control over financial reporting
were discovered. </P>
<P align=center>6 </P>
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<P align=justify>The Company is required to provide an auditor&#146;s attestation
report on its internal control over financial reporting for the fiscal year
ended December 31, 2010. In this annual report on Form 40-F, the Company&#146;s
independent registered public accounting firm, KPMG LLP (&#147;KPMG&#148;), has provided
its opinion as to the effectiveness of the Company&#146;s internal control over
financial reporting as of December 31, 2010. KPMG has also audited the Company&#146;s
financial statements included in this annual report on Form 40-F and issued a
report thereon. </P>
<P align=justify><I>Auditor&#146;s Attestation Report </I></P>
<P align=justify>KPMG&#146;s attestation report on the Company&#146;s internal control
over financial reporting is included in the audit report filed in <U>Exhibit
2</U> and is incorporated by reference in this annual report on Form 40-F. </P>
<P align=justify><I>Changes in Internal Control over Financial Reporting
</I></P>
<P align=justify>Management, including the CEO and CFO, has evaluated the
Company&#146;s internal control over financial reporting to determine whether any
changes occurred during the period covered by this annual report on Form 40-F
that have materially affected, or are reasonably likely to materially affect,
the Company&#146;s internal control over financial reporting. There have been no
changes that occurred during the Company&#146;s fiscal year ended December 31, 2010
that have materially affected, or are reasonably likely to materially affect,
the Company&#146;s internal control over financial reporting. </P>
<P align=center><B>CORPORATE GOVERNANCE </B></P>
<P align=justify>The Company&#146;s Board of Directors (the &#147;Board of Directors&#148;) is
responsible for the Company&#146;s Corporate Governance policies and has separately
designated standing Compensation, Corporate Governance and Nominating, and Audit
Committees. The Board of Directors has determined that all the members of the
Compensation, Corporate Governance and Nominating, and Audit Committees are
independent, based on the criteria for independence prescribed by section
303A.02 of the NYSE Listed Company Manual. </P>
<P align=justify><I>Compensation Committee </I></P>
<P align=justify>Compensation of the Company&#146;s CEO and all other officers is
recommended by management to the Compensation Committee for evaluation and
recommendation to the Board of Directors, established in accordance with section
303A.05 of the NYSE Listed Company Manual. The Compensation Committee develops,
reviews and monitors director and executive compensation and policies. The
Compensation Committee is also responsible for annually reviewing the adequacy
of compensation for directors and others and the composition of compensation
packages. The Company&#146;s CEO cannot be present during the Committee&#146;s
deliberations or vote. The Compensation Committee is composed of three
independent directors: Leonard Harris (chair), Geoffrey Handley and Mario
Szotlender. The Company&#146;s Compensation Committee Charter is available on the
Company&#146;s website at www.edrsilver.com. </P>
<P align=justify><I>Corporate Governance and Nominating Committee </I></P>
<P align=justify>The Company&#146;s Corporate Governance and Nominating Committee,
established in accordance with section 303A.04 of the NYSE Listed Company
Manual, is tasked with (a) developing and recommending to the Board of Directors
corporate governance principles applicable to the Company; (b) identifying and
recommending qualified individuals for nomination to the Board of Directors; and
(c) providing such assistance as the Chair of the Board of Directors, if
independent, or alternatively the lead director of the Board of Directors, may
require. The Corporate Governance and Nominating Committee is composed of three
independent directors: Geoffrey Handley (Chair), Leonard Harris, and Mario
Szotlender. The Corporate Governance and Nominating Committee Charter is
available on the Company&#146;s website at www.edrsilver.com.</P>
<P align=center>7 </P>
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<P align=justify>The principal corporate governance responsibilities of the
Corporate Governance and Nominating Committee include the following: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD>
      <P align=justify>reviewing and reassessing at least annually the adequacy
      of the Company&#146;s corporate governance procedures and recommending any
      proposed changes to the Board of Directors for approval;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD>
      <P align=justify>reviewing and recommending changes to the Board of
      Directors of the Company&#146;s Code of Conduct and considering any requests
      for waivers from the Company&#146;s Code of Conduct;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">c) </TD>
    <TD>
      <P align=justify>receiving comments from all directors and reporting
      annually to the Board of Directors with an assessment of the Board of
      Director&#146;s performance to be discussed with the full Board of Directors
      following the end of each fiscal year.</P></TD></TR></TABLE>
<P align=justify>The principal responsibilities of the Corporate Governance and
Nominating Committee for selection and nomination of director nominees include
the following: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD>
      <P align=justify>in making recommendations to the Board of Directors
      regarding director nominees, the Corporate Governance and Nominating
      Committee shall consider the appropriate size of the Board of Directors;
      the competencies and skills that the Board of Directors considers to be
      necessary for the Board of Directors, as a whole, to possess; the
      competencies and skills that the Board of Directors considers each
      existing director to possess; the competencies and skills each new nominee
      will bring to the Board of Directors; and whether or not each new nominee
      can devote sufficient time and resources to the nominee&#146;s duties as a
      director of the Company;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD>
      <P align=justify>developing qualification criteria for directors for
      recommendation to the Board of Directors and, in conjunction with the
      Chair of the Board of Directors (or, if the Chair is not an independent
      director, any lead director of the Board of Directors), the Corporate
      Governance and Nominating Committee shall appoint directors to the various
      committees of the Board of Directors;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">c) </TD>
    <TD>
      <P align=justify>having the sole authority to retain and terminate any
      search firm to be used to identify director candidates or any other
      outside advisors considered necessary to carry out its duties and to
      determine the terms of such retainer;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">d) </TD>
    <TD>
      <P align=justify>in conjunction with the Chair of the Board of Directors
      (or, if the Chair of the Board of Directors is not an independent
      director, any lead director of the Board of Directors), overseeing the
      evaluation of the Board of Directors and of the Company and making
      recommendations to the Board of Directors as
appropriate.</P></TD></TR></TABLE>
<P align=center><B>AUDIT COMMITTEE </B></P>
<P align=justify>The Company&#146;s Board of Directors has a separately designated
standing Audit Committee established in accordance with section 3(a)(58)(A) of
the Exchange Act and section 303A.06 of the NYSE Listed Company Manual. The
Company&#146;s Audit Committee is comprised of: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>Rex McLennan(chair)
  <LI>Mario Szotlender
  <LI>Ricardo Campoy
  <LI>Geoffrey Handley </LI></UL>
<P align=justify>In the opinion of the Company&#146;s Board of Directors, all members
of the Audit Committee are independent (as determined under Rule 10A-3 of the
Exchange Act and section 303A.02 of the NYSE Listed Company Manual.) and are
financially literate. The Audit Committee meets the composition requirements set
forth by section 803 of NYSE Amex Company Guide. </P>
<P align=center>8 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_9></A>
<P align=justify>The members of the Audit Committee do not have fixed terms and
are appointed and replaced from time to time by resolution of the Board of
Directors. </P>
<P align=justify>The Audit Committee meets with the President, the CEO, the CFO
and the Company&#146;s independent auditors to review and inquire into matters
affecting financial reporting, the system of internal accounting and financial
controls, as well as audit procedures and audit plans. The Audit Committee also
recommends to the Board of Directors which independent registered public
auditing firm should be appointed by the Company. In addition, the Audit
Committee reviews and recommends to the Board of Directors for approval the
annual financial statements, the MD&amp;A, and undertakes other activities
required by exchanges on which the Company&#146;s securities are listed and by
regulatory authorities to which the Company is held responsible. The Company&#146;s
Audit Committee Charter is available on the Company&#146;s website at
www.edrsilver.com. </P>
<P align=justify><I>Audit Committee Financial Expert </I></P>
<P align=justify>The Company&#146;s Board of Directors has determined that Rex
McLennan qualifies as a financial expert (as defined in Item 407 (d)(5) of
Regulation S-K under the Exchange Act) and is independent (as determined under
Exchange Act Rule 10A-3 and section 303A.02 of the NYSE Listed Company Manual).
</P>
<P align=center><B>PRINCIPAL ACCOUNTING FEES AND SERVICES &#150; INDEPENDENT
AUDITORS</B> </P>
<P align=justify>The following table shows the aggregate fees billed to the
Company by KPMG LLP and its affiliates, Chartered Accountants, the Company&#146;s
independent registered public auditing firm, in each of the last two years. </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2009
    </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><I>Assurance Fees
      (1)</I> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%"
      align=right>$544,105 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%"
      align=right>$479,650 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><I>Tax Fees
      (2)</I> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right>$0
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right>$0
  </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><I>All other fees
      (3)</I> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%"
      align=right>$53,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%"
      align=right>$15,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Total*</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%"
      align=right>$597,105 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%"
      align=right>$494,150 </TD></TR></TABLE></DIV>
<P align=justify>* All amounts are expressed in Canadian dollars </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>The aggregate fees billed in each of the last two fiscal
      years for assurance and related services by the Company&#146;s external auditor
      that are reasonably related to the performance of the audit or review of
      the Company&#146;s financial statements.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>The aggregate fees billed in each of the last two fiscal
      years for professional services rendered by the company&#146;s external auditor
      for tax compliance and tax advice.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(3) </TD>
    <TD>
      <P align=justify>The aggregate fees billed in each of the last two fiscal
      years for products and services provided by the Company&#146;s external
      auditor, other than the services reported under clauses 1and 2
    above.</P></TD></TR></TABLE>
<P align=center><B>PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES PROVIDED BY
INDEPENDENT AUDITORS</B> <B></B></P>
<P align=justify>The Audit Committee pre-approves all audit services to be
provided to the Company by its independent auditors. Non-audit services that are
prohibited to be provided to the Company by its independent auditors may not be
pre-approved. In addition, prior to the granting of any pre-approval, the Audit
Committee must be satisfied that the performance of the services in question
will not compromise the independence of the independent auditors. All non-audit
services performed by the Company&#146;s auditor for the fiscal year ended December
31, 2010 were pre-approved by the Audit Committee of the Company. No non-audit
services were approved pursuant to the <I>de minimis</I> exemption to the
pre-approval requirement.</P>
<P align=center>9 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_10></A>
<P align=center><B>OFF-BALANCE SHEET TRANSACTIONS </B></P>
<P align=justify>The Company does not have any off-balance sheet financing
arrangements or relationships with unconsolidated special purpose entities. </P>
<P align=center><B>CODE OF ETHICS </B></P>
<P align=justify>The Company has adopted a Code of Business Conduct and Ethics
(the &#147;Code&#148;) that applies to all the Company&#146;s directors, executive officers and
employees, which is available on the Company&#146;s website at www.edrsilver.com.
</P>
<P align=justify>During the fiscal year ended December 31, 2010, the Company did
not substantively amend, waive or implicitly waive any provision of the Code
with respect to any of the directors, executive officers or employees subject to
it. </P>
<P align=center><B>CONTRACTUAL OBLIGATIONS </B></P>
<P align=justify>The following table lists as of December 31, 2010 information
with respect to the Company&#146;s known contractual obligations.</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=15
      align=center>&nbsp;Payments due by period (in thousands of dollars)&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Contractual
      Obligations </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=center>Total
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=center>Less
      than 1 year </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=center>1 &#150; 3
      years </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=center>3 &#150; 5
      years </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=center>More
      than 5 years </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Operating Lease </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>1,840 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>261 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>551 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>572 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>456 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Promissory Note <SUP>(1)</SUP> </TD>
    <TD width="1%" align=left>$</TD>
    <TD width="8%" align=right>&nbsp;301 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>$</TD>
    <TD width="8%" align=right>243 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>$</TD>
    <TD width="8%" align=right>58 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Other Long-Term Liabilities<SUP>(2)</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>2,242 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>758 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>1,484 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Total </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%" align=right>4,383
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%" align=right>504
</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%" align=right>1,367
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%" align=right>572
</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%" align=right>1,940
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD></TR></TABLE></DIV><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>Includes $14,000 of interest over the remaining life of
      the promissory note</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>The $2.2 million of other long-term liabilities is the
      discounted cost estimate to settle the Company&#146;s reclamation costs of the
      Guanacevi mine and Guanajuato mine in Mexico. These costs include land
      rehabilitation, decommissioning of buildings and mine facilities, on-going
      care and maintenance and other costs.</P></TD></TR></TABLE>
<P align=center><B>NOTICES PURSUANT TO REGULATION BTR</B> </P>
<P align=justify>There were no notices required by Rule 104 of Regulation BTR
that the Registrant sent during the year ended December 31, 2010 concerning any
equity security subject to a blackout period under Rule 101 of Regulation BTR.
</P>
<P align=center><B>NYSE CORPORATE GOVERNANCE </B></P>
<P align=justify>The Company&#146;s common shares are listed on the NYSE. Sections
103.00 and 303A.11 of the NYSE Listed Company Manual permit foreign private
issuers to follow home country practices in lieu of certain provisions of the
NYSE Listed Company Manual. A foreign private issuer that follows home country
practices in lieu of certain provision of the NYSE Listed Company Manual must
disclose any significant ways in which its corporate governance practices differ
from those followed by domestic companies either on the its website or in the
annual report that it distributes to shareholders in the United States. A
description of the significant ways in which the Company&#146;s governance practices
differ from those followed by domestic companies pursuant to NYSE standards is
as follows: </P>
<P align=center>10 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_11></A>
<P style="MARGIN-LEFT: 5%" align=justify><I>Shareholder Meeting Quorum
Requirement</I>: The NYSE is of the opinion that the quorum required for any
meeting of shareholders should be sufficiently high to insure a representative
vote. The Company&#146;s quorum requirement is set forth in its Memorandum and
Articles. A quorum for a meeting of members of the Company is two persons who
are, or who represent by proxy, shareholders who, in the aggregate, hold at
least 5% of the shares entitled to be voted at the meeting. </P>
<P style="MARGIN-LEFT: 5%" align=justify><I>Proxy Delivery Requirement</I>: The
NYSE requires the solicitation of proxies and delivery of proxy statements for
all shareholder meetings, and requires that these proxies shall be solicited
pursuant to a proxy statement that conforms to SEC proxy rules. The Company is a
&#147;foreign private issuer&#148; as defined in Rule 3b-4 under the Exchange Act, and the
equity securities of the Company are accordingly exempt from the proxy rules set
forth in Sections 14(a), 14(b), 14(c) and 14(f) of the Exchange Act. The Company
solicits proxies in accordance with applicable rules and regulations in Canada.
</P>
<P style="MARGIN-LEFT: 5%" align=justify><I>Shareholder Approval Requirement:
</I>The Company will follow Toronto Stock Exchange rules for shareholder
approval of new issuances of its common shares. Following Toronto Stock Exchange
rules, shareholder approval is required for certain issuances of shares that:
(i) materially affect control of the Company; or (ii) provide consideration to
insiders in aggregate of 10% or greater of the market capitalization of the
listed issuer and have not been negotiated at arm&#146;s length. Shareholder approval
is also required, pursuant to Toronto Stock Exchange rules, in the case of
private placements: (x) for an aggregate number of listed securities issuable
greater than 25% of the number of securities of the listed issuer which are
outstanding, on a non-diluted basis, prior to the date of closing of the
transaction if the price per security is less than the market price; or (y) that
during any six month period are to insiders for listed securities or options,
rights or other entitlements to listed securities greater than 10% of the number
of securities of the listed issuer which are outstanding, on a non-diluted
basis, prior to the date of the closing of the first private placement to an
insider during the six month period. </P>
<P align=justify>The foregoing are consistent with the laws, customs and
practices in Canada </P>
<P align=center><B>UNDERTAKING </B></P>
<P align=justify>The Company undertakes to make available, in person or by
telephone, representatives to respond to inquiries made by the Commission staff,
and to furnish promptly, when requested to do so by the Commission staff,
information relating to: the securities registered pursuant to Form 40-F; the
securities in relation to which the obligation to file an annual report on Form
40-F arises; or transactions in said securities. </P>
<P align=center><B>CONSENT TO SERVICE OF PROCESS</B> </P>
<P align=justify>The Company filed an Appointment of Agent for Service of
Process and Undertaking on Form F-X with the SEC on November 14, 2006, with
respect to the class of securities in relation to which the obligation to file
this annual report on Form 40-F arises.</P>
<P align=center>11 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_12></A>
<P align=center><B>EXHIBIT INDEX </B></P>
<P align=justify>The following exhibits have been filed as part of this annual
report: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><U>Exhibit</U></B> </TD>
    <TD width="94%" colSpan=2 align=center> <P align=justify></P>
      <P align=justify><B><U>Description</U></B> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee colSpan=3 align=left><B>Annual Information</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><a href="exhibit1.htm">1. </a></TD>
    <TD width="94%" colSpan=2 align=left> <P align=justify><a href="exhibit1.htm">Annual
        Information Form of the Company for the year ended December 31, 2010 </a></P></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><a href="exhibit2.htm">2. </a></TD>
    <TD bgColor=#eeeeee width="94%" colSpan=2 align=left> <P align=justify><a href="exhibit2.htm">The
        following audited consolidated financial statements of the Company, are
        exhibits to and form a part of this annual report: </a></P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="5%" align=left> <P align=justify>&nbsp;</P></TD>
    <TD width="89%" align=left> <P align=justify>Independent Registered Public
        Accounting Firm&#146;s Report on Consolidated Financial </P></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left>&nbsp; </TD>
    <TD bgColor=#eeeeee width="5%" align=left> <P align=justify>&nbsp;</P></TD>
    <TD bgColor=#eeeeee width="89%" align=left> <P align=justify>Statements and
        Attestation on Internal Control Over Financial Reporting </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="5%" align=left> <P align=justify>&nbsp;</P></TD>
    <TD width="89%" align=left> <P align=justify>Consolidated Balance Sheets as
        of December 31, 2010 and 2009 </P></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left></TD>
    <TD bgColor=#eeeeee width="5%" align=left></TD>
    <TD bgColor=#eeeeee width="89%" align=left> <P align=justify>Consolidated
        Statement of Operations and Comprehensive Income for the year ended December
        31, 2010, year ended December 31, 2009 and year ended December 31, 2008
      </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD width="5%" align=left></TD>
    <TD width="89%" align=left> <P align=justify>Consolidated Statement of Shareholders&#146;
        Equity and Deficit for the year ended December 31, 2010, the year ended
        December 31, 2009 and the year ended December 31, 2008 </P></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left></TD>
    <TD bgColor=#eeeeee width="5%" align=left></TD>
    <TD bgColor=#eeeeee width="89%" align=left> <P align=justify>Consolidated
        Statements of Cash Flow for the year ended December 31, 2010, the year
        ended December 31, 2009 and the year ended December 31, 2008 </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD width="5%" align=left></TD>
    <TD width="89%" align=left> <P align=justify>Notes to Consolidated Financial
        Statements (which includes a reconciliation with United States GAAP as
        Note 19) </P></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><a href="exhibit3.htm">3. </a></TD>
    <TD bgColor=#eeeeee width="94%" colSpan=2 align=left> <P align=justify><a href="exhibit3.htm">Management&#146;s
        Discussion and Analysis </a></P></TD>
  </TR>
  <TR vAlign=top>
    <TD colSpan=3 align=left><B>Certifications</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><a href="exhibit4.htm">4. </a></TD>
    <TD bgColor=#eeeeee width="94%" colSpan=2 align=left> <P align=justify><a href="exhibit4.htm">Certificate
        of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Exchange
        Act </a></P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><a href="exhibit5.htm">5. </a></TD>
    <TD width="94%" colSpan=2 align=left> <P align=justify><a href="exhibit5.htm">Certificate
        of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Exchange
        Act </a></P></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><a href="exhibit6.htm">6. </a></TD>
    <TD bgColor=#eeeeee width="94%" colSpan=2 align=left> <P align=justify><a href="exhibit6.htm">Certificate
        of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 </a></P></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff align=left><a href="exhibit7.htm">7. </a></TD>
    <TD bgColor=#ffffff width="94%" colSpan=2 align=left> <P align=justify><a href="exhibit7.htm">Certificate
        of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 </a></P></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><B>Consents</B> </TD>
    <TD bgColor=#eeeeee width="94%" colSpan=2 align=left> <P align=justify>&nbsp;</P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><a href="exhibit8.htm">8. </a></TD>
    <TD width="94%" colSpan=2 align=left> <P align=justify><a href="exhibit8.htm">Consents
        of William J. Lewis, B.Sc., P.Geo. of Micon International Ltd (&#147;Micon&#148;)
        </a></P></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><a href="exhibit9.htm">9. </a></TD>
    <TD bgColor=#eeeeee width="94%" colSpan=2 align=left> <P align=justify><a href="exhibit9.htm">Consents
        of Robert J. Leader, P.Eng an Associate with Micon </a></P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><a href="exhibit10.htm">10. </a></TD>
    <TD width="94%" colSpan=2 align=left> <P align=justify><a href="exhibit10.htm">Consent
        of Dibya Kanti Mukhopadhyay, MAusIMM of Micon </a></P></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><a href="exhibit11.htm">11. </a></TD>
    <TD bgColor=#eeeeee width="94%" colSpan=2 align=left> <P align=justify><a href="exhibit11.htm">Consents
        of Charley Z. Murahwi, M.Sc., P.Geo, MAusIMM of Micon </a></P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><a href="exhibit12.htm">12. </a></TD>
    <TD width="94%" colSpan=2 align=left> <P align=justify><a href="exhibit12.htm">Consent
        of KPMG LLP </a></P></TD>
  </TR>
</TABLE>
<P align=center>12 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_13></A>
<P align=center><B>SIGNATURES</B> </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of
the Exchange Act, the Registrant certifies that it meets all of the requirements
for filing on Form 40-F and has duly caused this annual report to be signed on
its behalf by the undersigned, thereto duly authorized. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD  align=left>&nbsp;</TD>
    <TD width="50%" align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR>
    <TD >&nbsp;</TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR>
    <TD >&nbsp;</TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD  align=left>&nbsp;</TD>
    <TD width="50%" align=left>By:__<U>/s/ Bradford Cooke</U> </TD></TR>
  <TR vAlign=top>
    <TD  align=left>&nbsp;</TD>
    <TD width="50%" align=left>Name: Bradford Cooke </TD></TR>
  <TR vAlign=top>
    <TD  align=left>&nbsp;</TD>
    <TD width="50%" align=left>Title: Chairman and Chief Executive </TD></TR>
  <TR vAlign=top>
    <TD  align=left>&nbsp;</TD>
    <TD width="50%"
      align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Officer </TD></TR></TABLE>
<P align=justify>Date: March 21, 2011 </P>
<P align=center>13 </P>
<HR align=center color=black SIZE=5 width="100%" noShade>
</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>exhibit1.htm
<DESCRIPTION>ANNUAL INFORMATION FORM OF THE COMPANY FOR THE YEAR ENDED DECEMBER 31, 2010
<TEXT>
<HTML>
<HEAD>
   <TITLE>Endeavour Silver Corp.: Exhibit 1 - Filed by newsfilecorp.com</TITLE>
   <META name="HandheldFriendly" content="true">
</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<A name=page_1></A>
<P align=center><B>ANNUAL INFORMATION FORM </B></P>
<P align=center><B>(&#147;AIF&#148;) </B></P>
<P align=center><B>of </B></P>
<P align=center><B><FONT size=5>ENDEAVOUR SILVER CORP. </FONT></B></P>
<P align=center><B>(the &#147;Company&#148; or &#147;Endeavour&#148;) </B></P>
<P align=center>Suite #301 - 700 West Pender Street <BR>Vancouver, British
Columbia, Canada, V6C 1G8 <BR>Phone: (604) 685-9775 <BR>Fax: (604) 685-9744 </P>
<P align=center>&nbsp;</P>
<P align=center>&nbsp;</P>
<P align=center><B>Dated: March 18, 2011 </B></P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_2></A>
<P align=center><B><U>TABLE OF CONTENTS</U></B><B> </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><a href="#page_4"><B>ITEM 1:</B> </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_4"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_4"><B>PRELIMINARY
      NOTES</B> </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><a href="#page_4"><B>1</B> </a></TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_4"> 1.1 </a></TD>
    <TD  width="3%" align=left ><a href="#page_4"></a></TD>
    <TD width="79%" align=left><a href="#page_4">Incorporation of Documents by
      Reference </a></TD>
    <TD width="9%" align=right><a href="#page_4">1 </a></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=right ><a href="#page_4"> 1.2 </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_4"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_4">Date of Information
      </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><a href="#page_4">1 </a></TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_4"> &nbsp;1.3 </a></TD>
    <TD  width="3%" align=left ><a href="#page_4"></a></TD>
    <TD width="79%" align=left><a href="#page_4">Forward-Looking Statements </a></TD>
    <TD width="9%" align=right><a href="#page_4">1 </a></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=right ><a href="#page_5"> 1.4 </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_5"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_5">Currency and
      Exchange Rates </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><a href="#page_5">2 </a></TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_6"> 1.5 </a></TD>
    <TD  width="3%" align=left ><a href="#page_6"></a></TD>
    <TD width="79%" align=left><a href="#page_6">Classification of Mineral Reserves
      and Resources</a></TD>
    <TD width="9%" align=right><a href="#page_6">&nbsp;3 </a></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=right ><a href="#page_6">1.6 </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_6"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_6">Cautionary Note
      to U.S. Investors concerning Estimates of Measured, Indicated and Inferred
      Resources </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><a href="#page_6">3 </a></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left ><a href="#page_6"><B>ITEM 2:</B> </a></TD>
    <TD  width="3%" align=left ><a href="#page_6"></a></TD>
    <TD width="79%" align=left><a href="#page_6"><B>CORPORATE STRUCTURE</B> </a></TD>
    <TD width="9%" align=right><a href="#page_6"><B>3</B> </a></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=right ><a href="#page_6"> &nbsp;2.1 </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_6"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_6">Name, Address
      and Incorporation </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><a href="#page_6">3 </a></TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_7"> 2.2 </a></TD>
    <TD  width="3%" align=left ><a href="#page_7"></a></TD>
    <TD width="79%" align=left><a href="#page_7">Subsidiaries </a></TD>
    <TD width="9%" align=right><A href="#page_7">4</A> </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><a href="#page_7"><B>ITEM 3:</B> </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_7"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_7"><B>GENERAL DEVELOPMENT
      OF THE BUSINESS</B> </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><a href="#page_7"><B>4</B> </a></TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_7"> 3.1 </a></TD>
    <TD  width="3%" align=left ><a href="#page_7"></a></TD>
    <TD width="79%" align=left><a href="#page_7">Three Year History </a></TD>
    <TD width="9%" align=right><a href="#page_7">4 </a></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=right ><a href="#page_12"> 3.2 </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_12"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_12">Significant
      Acquisitions </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><A href="#page_12">9</A> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left ><a href="#page_12"><B>ITEM 4:</B> </a></TD>
    <TD  width="3%" align=left ><a href="#page_12"></a></TD>
    <TD width="79%" align=left><a href="#page_12"><B>DESCRIPTION OF THE BUSINESS</B>
      </a></TD>
    <TD width="9%" align=right><A href="#page_12"><B>9</B></A> </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=right ><a href="#page_12"> &nbsp;4.1 </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_12"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_12">General Description
      </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><A href="#page_12">9</A> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_12"> &nbsp;4.2 </a></TD>
    <TD  width="3%" align=left ><a href="#page_12"></a></TD>
    <TD width="79%" align=left><a href="#page_12">Risk Factors </a></TD>
    <TD width="9%" align=right><a href="#page_12">9 </a></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=right ><a href="#page_22"> &nbsp;4.3 </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_22"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_22">Asset-Backed
      Securities Outstanding </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><A href="#page_22">19</A> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_22"> &nbsp;4.4 </a></TD>
    <TD  width="3%" align=left ><a href="#page_22"></a></TD>
    <TD width="79%" align=left><a href="#page_22">Mineral Projects </a></TD>
    <TD width="9%" align=right><a href="#page_22">19 </a></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><a href="#page_44"><B>ITEM 5:</B> </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_44"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_44"><B>DIVIDENDS</B>
      </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><A
      href="#page_44"><B>41</B></A> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_44"> 5.1 </a></TD>
    <TD  width="3%" align=left ><a href="#page_44"></a></TD>
    <TD width="79%" align=left><a href="#page_44">Dividends </a></TD>
    <TD width="9%" align=right><A href="#page_44">41</A> </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><a href="#page_44"><B>ITEM 6:</B> </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_44"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_44"><B>DESCRIPTION
      OF CAPITAL STRUCTURE</B> </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><A
      href="#page_44"><B>41</B></A> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_44"> 6.1 </a></TD>
    <TD  width="3%" align=left ><a href="#page_44"></a></TD>
    <TD width="79%" align=left><a href="#page_44">General Description of Capital
      Structure </a></TD>
    <TD width="9%" align=right><A href="#page_44">41</A> </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=right ><a href="#page_44"> 6.2 </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_44"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_44">Constraints
      </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><A href="#page_44">41</A> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_44"> 6.3 </a></TD>
    <TD  width="3%" align=left ><a href="#page_44"></a></TD>
    <TD width="79%" align=left><a href="#page_44">Ratings </a></TD>
    <TD width="9%" align=right><a href="#page_44">41 </a></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><a href="#page_44"><B>ITEM 7:</B> </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_44"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_44"><B>MARKET FOR
      SECURITIES</B> </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><a href="#page_44"><B>41</B> </a></TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_44"> 7.1 </a></TD>
    <TD  width="3%" align=left ><a href="#page_44"></a></TD>
    <TD width="79%" align=left><a href="#page_44">Trading Price and Volume </a></TD>
    <TD width="9%" align=right><a href="#page_44">41 </a></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><a href="#page_46"><B>ITEM 8:</B> </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_46"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_46"><B>ESCROWED
      SECURITIES</B> </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><A
      href="#page_46"><B>43</B></A> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_46"> &nbsp;8.1 </a></TD>
    <TD  width="3%" align=left ><a href="#page_46"></a></TD>
    <TD width="79%" align=left><a href="#page_46">Escrowed Securities </a></TD>
    <TD width="9%" align=right><A href="#page_46">43</A> </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><a href="#page_46"><B>ITEM 9:</B> </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_46"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_46"><B>DIRECTORS
      AND OFFICERS</B> </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><A
      href="#page_46"><B>43</B></A> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_46"> &nbsp;9.1 </a></TD>
    <TD  width="3%" align=left ><a href="#page_46"></a></TD>
    <TD width="79%" align=left><a href="#page_46">Name, Occupation and Security
      Holding </a></TD>
    <TD width="9%" align=right><a href="#page_46">43 </a></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=right ><a href="#page_50"> 9.2 </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_50"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_50">Cease Trade
      Orders, Bankruptcies, Penalties or Sanctions </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><A href="#page_50">47</A> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_51"> 9.3 </a></TD>
    <TD  width="3%" align=left ><a href="#page_51"></a></TD>
    <TD width="79%" align=left><a href="#page_51">Conflicts of Interest </a></TD>
    <TD width="9%" align=right><a href="#page_51">48 </a></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><a href="#page_51"><B>ITEM 10:</B> </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_51"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_51"><B>PROMOTERS</B>
      </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><a href="#page_51"><B>48</B> </a></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left ><a href="#page_52"><B>ITEM 11:</B> </a></TD>
    <TD  width="3%" align=left ><a href="#page_52"></a></TD>
    <TD width="79%" align=left><a href="#page_52"><B>LEGAL PROCEEDINGS</B> </a></TD>
    <TD width="9%" align=right><A href="#page_52"><B>49</B></A> </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=right ><a href="#page_52"> 11.1 </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_52"></a></TD>
    <TD bgColor=#eeeeee width="79%" align=left><a href="#page_52">Legal Proceedings
      </a></TD>
    <TD bgColor=#eeeeee width="9%" align=right><a href="#page_52">49 </a></TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_52"> 11.2 </a></TD>
    <TD  width="3%" align=left ><a href="#page_52"></a></TD>
    <TD width="79%" align=left><a href="#page_52">Regulatory Actions </a></TD>
    <TD width="9%" align=right><a href="#page_52">49 </a></TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><a href="#page_52"><B>ITEM</B> <B>12:</B>
      </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left><a href="#page_52"></a></TD>
    <TD bgColor=#eeeeee width="80%" align=left><A
      href="#page_52"><B>INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL</B></A>
      <A
      href="#page_52"><B>TRANSACTIONS</B></A></TD>
    <TD bgColor=#eeeeee width="8%" align=right><A
      href="#page_52"><B>49</B></A> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_52"> 12.1 </a></TD>
    <TD  width="3%" align=left ><a href="#page_52"></a></TD>
    <TD width="80%" align=left ><a href="#page_52">Interest of Management and
      Others in Material Transactions </a></TD>
    <TD width="8%" align=right><A href="#page_52">49</A> </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><a href="#page_53"><B>ITEM</B> <B>13:</B>
      </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_53"></a></TD>
    <TD bgColor=#eeeeee width="80%" align=left ><a href="#page_53"><B>TRANSFER
      AGENT AND REGISTRAR</B> </a></TD>
    <TD bgColor=#eeeeee width="8%" align=right><A
      href="#page_53"><B>50</B></A> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_53"> 13.1 </a></TD>
    <TD  width="3%" align=left ><a href="#page_53"></a></TD>
    <TD width="80%" align=left ><a href="#page_53">Transfer Agent and Registrar
      </a></TD>
    <TD width="8%" align=right><A href="#page_53">50</A> </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><a href="#page_53"><B>ITEM</B> <B>14:</B>
      </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_53"></a></TD>
    <TD bgColor=#eeeeee width="80%" align=left ><a href="#page_53"><B>MATERIAL
      CONTRACTS</B> </a></TD>
    <TD bgColor=#eeeeee width="8%" align=right><A
      href="#page_53"><B>50</B></A> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_53"> 14.1 </a></TD>
    <TD  width="3%" align=left ><a href="#page_53"></a></TD>
    <TD width="80%" align=left ><a href="#page_53">Material Contracts </a></TD>
    <TD width="8%" align=right><A href="#page_53">50</A> </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><a href="#page_54"><B>ITEM</B> <B>15:</B>
      </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_54"></a></TD>
    <TD bgColor=#eeeeee width="80%" align=left ><a href="#page_54"><B>INTERESTS
      OF EXPERTS</B> </a></TD>
    <TD bgColor=#eeeeee width="8%" align=right><A
      href="#page_54"><B>51</B></A> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_54"> 15.1 </a></TD>
    <TD  width="3%" align=left ><a href="#page_54"></a></TD>
    <TD width="80%" align=left ><a href="#page_54">Names of Experts </a></TD>
    <TD width="8%" align=right><A href="#page_54">51</A> </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=right ><a href="#page_54"> 15.2 </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_54"></a></TD>
    <TD bgColor=#eeeeee width="80%" align=left ><a href="#page_54">Interests of
      Experts </a></TD>
    <TD bgColor=#eeeeee width="8%" align=right><A href="#page_54">51</A> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left ><a href="#page_54"><B>ITEM</B> <B>16:</B> </a></TD>
    <TD  width="3%" align=left ><a href="#page_54"></a></TD>
    <TD width="80%" align=left ><a href="#page_54"><B>ADDITIONAL INFORMATION</B>
      </a></TD>
    <TD width="8%" align=right><A href="#page_54"><B>51</B></A> </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=right ><a href="#page_54"> 16.1 </a></TD>
    <TD bgColor=#eeeeee  width="3%" align=left
    ><a href="#page_54"></a></TD>
    <TD bgColor=#eeeeee width="80%" align=left ><a href="#page_54">Additional
      Information </a></TD>
    <TD bgColor=#eeeeee width="8%" align=right><A href="#page_54">51</A> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=right ><a href="#page_55"> 16.2 </a></TD>
    <TD  width="3%" align=left ><a href="#page_55"></a></TD>
    <TD width="80%" align=left ><A href="#page_55">Audit Committee</A> </TD>
    <TD width="8%" align=right><A href="#page_55">52</A> </TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>ITEM 1:</B> </TD>
    <TD width="90%" align=left><B>PRELIMINARY NOTES</B>
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>1.1</B> </TD>
    <TD width="95%" align=left><B>Incorporation of Documents by Reference</B>
    </TD></TR></TABLE>
<P align=justify>Specifically incorporated by reference and forming part of this
Annual Information Form (&#147;AIF&#148;) are the Consolidated Financial Statements for
Endeavour Silver Corp. (the &#147;Company&#148; or &#147;Endeavour&#148; which includes its
subsidiaries) for the year ended December 31, 2010, for the year ended December
31, 2009 and for the year ended December 31, 2008, together with the Management
Discussion and Analysis accompanying such financial statements. </P>
<P align=justify>All financial information in this AIF has been prepared in
accordance with Canadian generally accepted accounting principles (&#147;Canadian
GAAP&#148;). All amounts are stated in US dollars unless otherwise indicated. </P>
<P align=justify>The information provided in the AIF is supplemented by
disclosure contained in the documents listed below which are incorporated by
reference into this AIF. These documents must be read together with the AIF in
order to provide full, true and plain disclosure of all material facts relating
to Endeavour. The documents listed below are not contained within, nor attached
to this document. The documents may be accessed by the reader at the following
locations: </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="100%">

  <TR vAlign=top>
    <TD align=center><BR><BR><U>Type of Document</U> <BR></TD>
    <TD width="15%" align=center ><BR><U>Effective Date /</U>
      <BR><U>Period Ended</U> <BR></TD>
    <TD width="15%" align=center ><BR><U>Date Filed / Posted</U>
      <BR><BR></TD>
    <TD width="34%" align=center><U>Document name which may be viewed at
      the</U> <BR><U>SEDAR website at
      </U><B><U><FONT>www.sedar.com</FONT></U></B> <BR><U>(or alternative
      location for non-SEDAR</U> <BR><U>documents)</U> </TD></TR>
  <TR vAlign=top>
    <TD align=left>NI 43-101 Technical Report <BR>Audit of the Resource and
      <BR>Reserve Estimates for the <BR>Guanacevi Project, Durango <BR>State,
      Mexico </TD>
    <TD width="15%" align=center ><BR><BR>March 15, 2011
    <BR><BR></TD>
    <TD width="15%" align=center ><BR><BR>March 21, 2011
    <BR><BR></TD>
    <TD width="34%" align=left><BR>Technical Report (43-101) &#150; English
      <BR>Qualification Certificate(s) and Consent(s) <BR><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left>NI 43-101 Technical Report <BR>Audit of the Resource and
      <BR>Reserve Estimates for the <BR>Guanajuato Mines Project, <BR>Guanajuato
      State, Mexico </TD>
    <TD width="15%" align=center ><BR><BR>March 15, 2011
    <BR><BR></TD>
    <TD width="15%" align=center ><BR><BR>March 21, 2011
    <BR><BR></TD>
    <TD width="34%" align=left><BR>Technical Report (43-101) &#150; English
      <BR>Qualification Certificate(s) and Consent(s) <BR><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left>NI 43-101 Technical Report <BR>Audit of the Mineral
      Resource <BR>Estimate for the Parral Project, <BR>Chihuahua State, Mexico
    </TD>
    <TD width="15%" align=center ><BR>December 15, <BR>2010 </TD>
    <TD width="15%" align=center ><BR><BR>March 1, 2011 </TD>
    <TD width="34%" align=left><BR>Technical Report (43-101) &#150; English
      <BR>Qualification Certificate(s) and Consent(s) </TD></TR></TABLE></DIV>
<P align=justify>References to &#147;the Company&#148;, &#147;Endeavour&#148; or &#147;Endeavour Silver&#148;
are to Endeavour Silver Corp. and where applicable and as the context requires
includes its subsidiaries </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>1.2</B> </TD>
    <TD width="95%" align=left><B>Date of Information</B> </TD></TR></TABLE>
<P align=justify>All information in this AIF is as of December 31, 2010 unless
otherwise indicated. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>1.3</B> </TD>
    <TD width="95%" align=left><B>Forward-Looking Statements</B>
</TD></TR></TABLE>
<P align=justify>This Annual Information Form contains &#147;forward-looking
statements&#148; within the meaning of applicable Canadian securities legislation.
Such forward-looking statements concern the Company&#146;s anticipated results and
developments in the Company&#146;s operations in future periods, planned exploration
and development of its properties, plans related to its business and other
matters that may occur in the future. </P>
<P align=center>1 <BR><B><I>Endeavour Silver Corp.</I></B><B><I> </I></B></P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<P align=justify>These statements relate to analyses and other information that
are based on expectations of future performance, including silver and gold
production and planned work programs. </P>
<P align=justify>Statements concerning reserves and mineral resource estimates
may also be deemed to constitute forward-looking statements to the extent that
they involve estimates of the mineralization that will be encountered if the
property is developed and, in the case of mineral reserves, such statements
reflect the conclusion based on certain assumptions that the mineral deposit can
be economically exploited. </P>
<P align=justify>Forward-looking statements are subject to a variety of known
and unknown risks, uncertainties and other factors which could cause actual
events or results to differ from those expressed or implied by the
forward-looking statements, including, without limitation: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>risks related to precious and base metal price fluctuations;
  <LI>risks related to fluctuations in the currency markets (particularly the
  Mexican peso, Canadian dollar and United States dollar);
  <LI>risks related to the inherently dangerous activity of mining, including
  conditions or events beyond our control, and operating or technical
  difficulties in mineral exploration, development and mining activities;
  <LI>uncertainty in our ability to fund the development of our mineral
  properties or the completion of further exploration programs;
  <LI>uncertainty as to actual capital costs, operating costs, production and
  economic returns, and uncertainty that our development activities will result
  in profitable mining operations;
  <LI>risks related to our reserves and mineral resource figures being estimates
  based on interpretations and assumptions which may result in less mineral
  production under actual conditions than is currently estimated and to
  diminishing quantities or grades of mineral reserves as properties are mined;
  <LI>risks related to governmental regulations and obtaining necessary licenses
  and permits;
  <LI>risks related to our business being subject to environmental laws and
  regulations which may increase our costs of doing business and restrict our
  operations;
  <LI>risks related to our mineral properties being subject to prior
  unregistered agreements, transfers, or claims and other defects in title;
  <LI>risks relating to inadequate insurance or inability to obtain insurance;
  <LI>risks related to our ability to successfully integrate acquisitions;
  <LI>uncertainty in our ability to obtain necessary financing;
  <LI>risks related to increased competition that could adversely affect our
  ability to attract necessary capital funding or acquire suitable producing
  properties for mineral exploration in the future;
  <LI>risks related to many of our primary properties being located in Mexico,
  including political, economic, and regulatory instability; and
  <LI>risks related to our officers and directors becoming associated with other
  natural resource companies which may give rise to conflicts of interests.
</LI></UL>
<P align=justify>This list is not exhaustive of the factors that may affect our
forward-looking statements. Should one or more of these risks and uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those described in the forward-looking statements. The
Company&#146;s forward-looking statements are based on beliefs, expectations and
opinions of management on the date the statements are made and the Company does
not assume any obligation to update forward-looking statements if circumstances
or management&#146;s beliefs, expectations or opinions change, except as required by
law. For the reasons set forth above, investors should not place undue reliance
on forward-looking statements </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>1.4</B> </TD>
    <TD width="95%" align=left><B>Currency and Exchange Rates</B>
  </TD></TR></TABLE>
<P align=justify>All dollar amounts in this AIF are expressed in U.S. dollars
unless otherwise indicated. References to &#147;CDN$&#148; are to Canadian dollars. </P>
<P align=center>2 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>1.5</B> </TD>
    <TD width="95%" align=left><B>Classification of Mineral Reserves and
      Resources</B> </TD></TR></TABLE>
<P align=justify>In this AIF, the definitions of proven and probable mineral
reserves, and measured, indicated and inferred resources are those used by the
Canadian provincial securities regulatory authorities and conform to the
definitions utilized by the Canadian Institute of Mining, Metallurgy and
Petroleum (&#147;CIM&#148;) in the &#147;CIM Standards on Mineral Resources and Reserves &#150;
Definitions and Guidelines&#148; adopted on August 20, 2000 and amended December 11,
2005. </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>1.6</B> </TD>
    <TD width="95%" align=left><B>Cautionary Note to</B> <B>U.S.</B>
      <B>Investors</B> <B>concerning</B> <B>Estimates</B> <B>of</B>
      <B>Measured,</B> <B>Indicated</B> <B>and</B> <B>Inferred Resources</B>
  </TD></TR></TABLE></DIV>
<P align=justify>This AIF has been prepared in accordance with the requirements
of the securities laws in effect in Canada, which differ from the requirements
of United States securities laws. The terms &#147;mineral reserve&#148;, &#147;proven mineral
reserve&#148; and &#147;probable mineral reserve&#148; are Canadian mining terms as defined in
accordance with Canadian National Instrument 43-101 &#150; Standards of Disclosure
for Mineral Projects (&#147;NI 43-101&#148;) and the Canadian Institute of Mining,
Metallurgy and Petroleum (the &#147;CIM&#148;) - <I>CIM Definition Standards on Mineral
Resources and Mineral Reserves</I>, adopted by the CIM Council, as amended.
These definitions differ from the definitions in SEC Industry Guide 7 under the
United States Securities Act of 1993, as amended (the &#147;Securities Act&#148;). Under
SEC Industry Guide 7 standards, a &#147;final&#148; or &#147;bankable&#148; feasibility study is
required to report reserves, the three-year historical average price is used in
any reserve or cash flow analysis to designate reserves and the primary
environmental analysis or report must be filed with the appropriate governmental
authority. </P>
<P align=justify>In addition, the terms &#147;mineral resource&#148;, &#147;measured mineral
resource&#148;, &#147;indicated mineral resource&#148; and &#147;inferred mineral resource&#148; are
defined in and required to be disclosed by NI 43-101; however, these terms are
not defined terms under SEC Industry Guide 7 and are normally not permitted to
be used in reports and registration statements filed with the SEC. Investors are
cautioned not to assume that any part or all of mineral deposits in these
categories will ever be converted into reserves. &#147;Inferred mineral resources&#148;
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 pre-feasibility studies, except in rare cases. Investors
are cautioned not to assume that all or any part of an inferred mineral resource
exists or is economically or legally mineable. Disclosure of &#147;contained ounces&#148;
in a resource is permitted disclosure under Canadian regulations; however, the
SEC normally only permits issuers to report mineralization that does not
constitute &#147;reserves&#148; by SEC Industry Guide 7 standards as in place tonnage and
grade without reference to unit measures. </P>
<P align=justify>Accordingly, information contained in this AIF contain
descriptions of our mineral deposits that may not be comparable to similar
information made public by U.S. companies subject to the reporting and
disclosure requirements under the United States federal securities laws and the
rules and regulations thereunder. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>ITEM 2:</B> </TD>
    <TD width="90%" align=left><B>CORPORATE STRUCTURE</B>
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>2.1</B> </TD>
    <TD width="95%" align=left><B>Name, Address and Incorporation</B>
  </TD></TR></TABLE>
<P align=justify>The Company was incorporated under the laws of the Province of
British Columbia on March 11, 1981 under the name, &#147;Levelland Energy &amp;
Resources Ltd&#148;. Effective August 27, 2002 the Company changed its name to
&#147;Endeavour Gold Corp.&#148;, consolidated its share capital on the basis of four old
common shares for one new common share and increased its share capital to
100,000,000 common shares without par value. Then on September 13, 2004, the
Company changed its name to &#147;Endeavour Silver Corp.&#148;, transitioned from the
Company Act (British Columbia) to the British Columbia Business Corporations Act
(British Columbia) and increased its authorized share capital to unlimited
common shares without par value. </P>
<P align=center>3 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<P align=justify>The Company&#146;s principal business office is located at: </P>
<P style="MARGIN-LEFT: 5%" align=justify>Suite 301 - 700 West Pender Street
<BR>Vancouver, British Columbia <BR>Canada, V6C 1G8 </P>
<P align=justify>and its registered and records office is located at: </P>
<P style="MARGIN-LEFT: 5%" align=justify>19<SUP>th</SUP> Floor, 885 West Georgia
Street <BR>Vancouver, British Columbia <BR>Canada, V6C 3H4 </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>2.2</B> </TD>
    <TD width="95%" align=left><B>Subsidiaries</B> </TD></TR></TABLE>
<P align=justify>The Company conducts its business primiarly in Mexico through
subsidiary companies. The following table lists the subsidiaries, place
incorporated and % ownership held. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>Name of Company</B> </TD>
    <TD width="15%" align=center><B>Incorporated</B> </TD>
    <TD width="15%" align=center><B>% held</B> </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="15%">&nbsp; </TD>
    <TD width="15%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff
      align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Endeavour
      Gold Corporation, S.A. de C.V. </TD>
    <TD bgColor=#e6efff width="15%" align=center>Mexico </TD>
  <TD bgColor=#e6efff width="15%" align=center>100 </TD></TR>
  <TR vAlign=top>
    <TD
      align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Minera
      Plata Adelante, S.A. de C.V. </TD>
    <TD width="15%" align=center>Mexico </TD>
  <TD width="15%" align=center>100 </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff
      align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Minera
      Santa Cruz y Garibaldi, S.A. de C.V. </TD>
    <TD bgColor=#e6efff width="15%" align=center>Mexico </TD>
  <TD bgColor=#e6efff width="15%" align=center>100 </TD></TR>
  <TR vAlign=top>
    <TD
      align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Refinadora
      Plata Guanacevi, S.A. de C.V. </TD>
    <TD width="15%" align=center>Mexico </TD>
  <TD width="15%" align=center>100 </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff
      align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Metallurgica
      Guanacevi, S.A. de C.V. </TD>
    <TD bgColor=#e6efff width="15%" align=center>Mexico </TD>
  <TD bgColor=#e6efff width="15%" align=center>100 </TD></TR>
  <TR vAlign=top>
    <TD
      align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mina
      Bolanitos S.A de C.V. </TD>
    <TD width="15%" align=center>Mexico </TD>
  <TD width="15%" align=center>100 </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;Guanacevi Mining Service, S.A. de C.V. </TD>
    <TD bgColor=#e6efff width="15%" align=center>Mexico </TD>
  <TD bgColor=#e6efff width="15%" align=center>100 </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Recursos Humanos Guanacevi, S.A. de C.V. </TD>
    <TD width="15%" align=center>Mexico </TD>
  <TD width="15%" align=center>100 </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;Minera Plata Carina S.P.A. </TD>
    <TD bgColor=#e6efff width="15%" align=center>Chile </TD>
  <TD bgColor=#e6efff width="15%" align=center>100 </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
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  <TR vAlign=top>
    <TD align=left><B>ITEM 3:</B> </TD>
    <TD width="90%" align=left><B>GENERAL DEVELOPMENT OF THE BUSINESS</B>
  </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>3.1</B> </TD>
    <TD width="95%" align=left><B>Three Year History</B> </TD></TR></TABLE>
<P align=justify><B><U>Overview</U></B><B> </B></P>
<P align=justify>The Company is a Canadian mineral company engaged in the
evaluation, acquisition, exploration, development and exploitation of precious
metal properties in Mexico.</P>
<P align=justify><B>Guanacevi Mines Project </B></P>
<P align=justify>In May 2004, Endeavour signed formal option agreements to
acquire up to a 100% interest in the producing Santa Cruz silver-gold mine,
certain other mining concessions and the Guanacevi mineral processing plant
(collectively, the &#147;Guanacevi Mines Project&#148;) in Durango, Mexico. The terms of
the agreements gave Endeavour the option to acquire an initial 51% interest in
these operating assets by paying a total of approximately US$4 million to the
vendors and incurring $1 million in mine exploration and development within one
year. This was completed on January 28, 2006. The balance of the 49% interest
was purchased through the payment of a further $3 million by instalments. The
purchase of the remaining 49% of the mill facility was completed in July 2006
and the purchase of the remaining 49% of the mining assets was completed in
January 2008. </P>
<P align=center>4 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify>Under the option interest agreement, a scheduled January 28,
2007 payment of $638,000 was made with 176,201 shares of the Company in lieu of
cash. Further to a negotiated early buy-out of the minority shareholders, the
Company acquired the remaining shares of Minera Santa Cruz y Garibaldi S.A. de
C.V. (&#147;Minera Santa Cruz&#148;), which owned 49% of the Santa Cruz silver-gold mine
in May 2007 by the issue of 1,350,000 shares of the Company with a fair market
value of $5.04 per share. The value of 1,350,000 shares reflected the minority
shareholders&#146; earnings to May 2007, the 2008 option payment of $638,000 that was
to be made in January 2008, and projected 2007 mine earnings.</P>
<P align=justify>The Company elected to accelerate the buy out in order to
streamline the mining operations and facilitate additional capital investments
for the mine development program.</P>
<P align=justify><B>Guanajuato Mines Project (formerly referred to as Bolanitos
Mines Project) </B></P>
<P align=justify>In February 2007, the Company<B> </B>acquired the right to
purchase the exploitation contracts to the producing Unidad Bolanitos silver
(gold) mines located in the northern parts of the Guanajuato and La Luz silver
districts in the state of Guanajuato, Mexico from Minas de la Luz SA de CV
("MdlL") for $3.4 million, comprised of $2.4 million in cash and $1.0 million in
common shares of the Company. On April 30, 2007 the Company completed the
acquisition by paying $2.4 million in cash and issuing 224,215 common shares
priced at $4.46 per share. </P>
<P align=justify>In April 2007 the Company entered into an agreement with two
subsidiaries of Industrial Penoles S.A. de C.V. (&#147;Penoles&#148;) to purchase all of
the Guanajuato property and plant assets for 800,000 common shares of the
Company and a share purchase warrant exercisable for an additional 250,000
common shares at CDN$5.50 per share within a two year period. The acquisition
was completed on May 30, 2007 and the Company has a 100% interest in the
Guanajuato Mines project, free and clear of any royalties. The share purchase
warrant expired on May 30, 2009 unexercised.</P>
<P align=justify>The Guanacevi Mines Project and the Guanajuato Mines Project
have been the primary focus of business activity for the last year with the
Guanacevi Mines Project the primary focus for the preceding 2 years. See Item
4.4 for further details. </P>
<P align=justify><B><U>Three Year History</U></B><B> </B></P>
<P align=justify><B><I>2011 to Present </I></B></P>
<P align=justify>On March 21, 2011 the Company released updated NI 43-101
Reserve and Resource estimates as at December 31, 2010 for its active silver
mining and exploration projects in Mexico, the Guanacevi Mines Project and the
Guanajuato Mines Project. </P>
<P align=justify>On March 14, 2011 the Company transferred the listing of its
common shares from the NYSE Amex Equities (&#147;NYSE Amex&#148;) to the NYSE.</P>
<P align=center>5 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify><B><I>2010 </I></B></P>
<P align=justify>Endeavour recorded its fifth consecutive year of growing sales
revenue and mine operating cash-flow in 2010 (during fiscal 2005 no revenue was
reported as the Company only held an option to purchase on the Guanacevi project
at that time). During 2010, escalating prices and increased production drove
sales 70% higher to $86.5 million and increased mine operating cash-flow 111% to
$45.0 million. Direct operating costs were relatively flat allowing the
Company&#146;s operating margins to rise for the third straight year, culminating in
the Company&#146;s best financial performance yet, with EBITDA climbing 122% to $33.1
million and an annual earnings per share of $0.11.</P>
<P align=justify>Endeavour reported its sixth consecutive year of growing silver
and gold production for 2010, increasing silver production by 26% to 3,285,634
oz silver and gold production by 33% to 17,713 oz gold. The Company successfully
completed the 2010 Guanacevi plant expansion program on budget, increasing the
plant capacity to facilitate the increased mine production that resulted from
the opening of the Porvenir Dos mine in 2009 and the opening of the Porvenir
Cuatro and Santa Cruz mines in 2010. At Guanajuato, the Company benefitted from
a full year operation at the Lucero mine which opened in 2009.</P>
<P align=justify>In February 2010, the Company completed an early exercise of
its option to purchase the El Porvenir Cuatro properties, located approximately
2.5 kilometers northwest of the operating Porvenir silver mine, part of the
Company&#146;s Guanacevi&#146;s Mines project in Durango, Mexico. The Company acquired a
100% interest in the Porvenir Cuatro properties by paying a total consideration
of US$700,000 to the vendors, consisting of US$100,000 cash and 136,054 shares
on signing of the agreement in February 2009 and an additional 71,428 shares and
US$160,000 on the early exercise of the option to purchase. On the basis of
positive internal resource and economic assessments, management elected to
fast-track Porvenir Cuatro to production in 2010.</P>
<P align=justify>Endeavour achieved its sixth consecutive year of combined
reserve and resource growth in 2010. New high grade silver-gold discoveries were
made in both Guanacevi and Guanajuato, thereby confirming once again the
prolific exploration potential of these two historic mining districts. The
Company also acquired an option to purchase a new property called San Sebastian
located in Jalisco, Mexico. The San Sebastian property represents a new,
district scale, silver-gold exploration opportunity for the Company. The Company
can acquire a 100% interest in the San Sebastian property from IMMSA (Grupo
Mexico) by making cash payments totaling US$2.75 million and spending US$2.0
million on exploration over a three year period. IMMSA will retain a 2% NSR
royalty on any mineral production from the properties.</P>
<P align=justify>In 2010, the Company continued to emphasize its primary focus
on safety, as demonstrated by over 24,000 hours of personnel training. Safety
and mine rescue training programs are held regularly at both operations and the
direct results are safer working environments. The Company reduced lost time
accidents, despite increased man-hours.</P>
<P align=justify>During 2010, the Company&#146;s net financing activities generated
$56.3 million. The Company raised a net $49.3 million by issuing 8,710,000
common shares through a short form prospectus and $7.9 million through the
exercise of warrants and options during the year. In addition, the Company
provided redemption notice to all debenture holders resulting in all outstanding
debentures being converted into equity during the year and making the Company
debt free once again. The Company paid out $0.9 million in interest on the
convertible debentures during the year. </P>
<P align=justify><B><I>2009 </I></B></P>
<P align=justify>During 2009, Endeavour recorded its fourth consecutive year of
growing sales revenue and mine operating cash-flow in (during fiscal 2005 no
revenue was reported as the Company only held an option to purchase on the
Guanacevi project at that time). During 2009, Sales revenues increased 29% to
$50.8 million and mine operating cash-flow increase by 85% to $21.3 million over
the previous year. Cash costs declined and operating profit margins rose for the
second straight year resulting in the Company&#146;s best financial performance yet, with EBITDA turning positive
for the first time in Endeavour&#146;s five year operating history. </P>
<P align=center>6 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify>Endeavour reported its fifth consecutive year of growing silver
and gold production for 2009, increasing silver production by 11% to 2,598,518
oz silver and gold production by 66% to 13,398 oz gold. The Company successfully
opened two new mines during the year, one in each operating district, thereby
facilitating the next phase of growth at both operations. The Company commenced
production from the new Lucero mine at Guanajuato in Q1, 2009 and commenced
production from the new Porvenir Dos mine at Guanacevi in Q4, 2009. Capital
projects were completed on time and budget, and record silver recoveries and
gold grades each helped Endeavour&#146;s operating performance in 2009. </P>
<P align=justify>Endeavour achieved its fifth consecutive year of combined
reserve and resource growth in 2009. New high grade silver-gold discoveries were
made in both Guanacevi and Guanajuato, thereby confirming once again the
prolific exploration potential of these two historic mining districts. New
property acquisitions also helped Endeavour&#146;s exploration performance in
2009.</P>
<P align=justify>In 2009, the Company emphasized its primary focus on safety, as
demonstrated by over 13,000 hours of safety training. Mine rescue groups at both
operations went to their first mine rescue competition and Endeavour placed
3<SUP>rd</SUP> in the first aid division. Safety and mine rescue training
programs are held regularly at both operations and the direct results are safer
working environments.</P>
<P align=justify>Endeavour also continued its focus on maintaining high
environmental standards at both operations. New toxic waste storage facilities
were constructed in 2008, tailings water is routinely recycled and we have a
policy of zero emissions from our tailings facilities. </P>
<P align=justify>The Company remained very pro-active in its employee and
community relations in 2009. We instituted an enhanced employee bonus program in
order to retain and attract the best mine workers in Mexico. Endeavour also
maintained good relations with each of the local communities in which it
operates with community outreach programs, providing access to medical doctors
and introducing new employment opportunities and skills training programs. </P>
<P align=justify>During 2009, the Company&#146;s net financing activities generated
$30.0 million. The Company raised $10.0 million through the issuance of
convertible debentures (as described below), $19.4 million through equity issued
on a private placement and short form prospectus and $1.4 million through the
exercise of warrants and options during the year. The Company paid out $0.8
million in interest on the convertible debentures during the year. </P>
<P align=justify>On February 26, 2009, the Company completed CDN$14 million in
private placement financing of five year 10% subordinated unsecured,
convertible, redeemable debentures. The 10% per annum interest is payable
quarterly in arrears. At any time after the closing date and prior to maturity
date each debenture may be converted by the holder at a conversion price of
CDN$1.90 into one unit of the Company, consisting of approximately 526 of the
Company&#146;s common shares without par value and approximately 263 common share
purchase warrants. Each share purchase warrant will entitle the holder to
purchase one common share prior to the maturity date at an exercise price of
CDN$2.05. At any time after 18 months following the closing date and prior to
the maturity date, each debenture can be redeemed by the Company for cash, so
long as the volume weighted average price of the common shares on the Toronto
Stock Exchange (&#147;TSX&#148;) for a period of 30 consecutive trading days prior to the
date of the redemption notice is equal to or greater than CDN$2.85, and by
paying a 7% redemption fee to the holder.</P>
<P align=center>7 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify>The net proceeds from the debenture offering were used to
acquire mining equipment, develop underground access to mineralized zones and
upgrade certain plant circuits at the Company&#146;s Guanacevi and Guanajuato Mines
in Mexico, and for general corporate purposes. </P>
<P align=justify>On October 7, 2009, the Company received gross proceeds of
CDN$18.5 million from a prospectus offering of 6,152,500 units at CDN$3.00 per
unit. Each unit was comprised of one common share and one-half share purchase
warrant with each whole share purchase warrant exercisable to purchase one
common share at an exercise price of CDN$3.60 until October 7, 2011. The agents
received a cash commission of 6% totaling $1.1 million and 369,150 agent
warrants, each exercisable to purchase one common share at an exercise price of
CDN$3.00 until October 7, 2011. </P>
<P align=justify>On October 26, 2009 the Company completed a non-brokered
private placement for 1,299,843 units at CDN$3.00 per unit for gross proceeds of
CDN$3.9 million. Each unit consisted of one common share and one-half share
purchase warrant with each whole share purchase warrant exercisable to purchase
one common share at an exercise price of CDN$3.60 until October 26, 2011. </P>
<P align=justify><B><I>2008 </I></B></P>
<P align=justify>During 2008, the Company continued its focus on increasing
production, increasing proven and probable reserves, and upgrading
facilities.</P>
<P align=justify>On March 3, 2008 the Company released updated NI 43-101 Reserve
and Resource estimates as at December 31, 2007 for its three active silver
mining and exploration projects in Mexico, the Guanacevi Mines Project, the
Guanajuato Mines Project and the Parral Exploration Project, showing
significantly higher reserves and resources than at December 31, 2006 based on
the acquisition of the Guanajuato Mines Project and the results of drilling and
development undertaken during 2007.</P>
<P align=justify>In 2008, at the Guanacevi Mines Project the Company experienced
a 3% reduction in silver production. The main factors in the slight reduction
were lower ore grades, re-assignment of some mine personnel from production to
development and some down-time at the plant for repairs and various capital
projects. Some of the completed upgrade projects in 2008 were: mine development
of 5,048 metres, a ventilation shaft, pump station modification, leach circuit
expansion, electrical substation expansion, floatation circuit rehabilitation,
tailings dam phase 2 expansion, new silver refinery, new warehouse, new security
building and a new assay lab. During 2008, new zones were defined in San Pedro
which will require further drilling to develop resources. </P>
<P align=justify>At the Guanajuato Mines Project during 2008 the Company
experienced a 113% increase in silver production. In 2008, the average silver
grade increased due to a focus on mining higher grade material and reducing
dilution in the stopes and the average silver recovery rate increased due to an
optimization of the plant. At the beginning of 2008, the mines were operating at
minimal levels to upgrade the safety standards on the shafts and surrounding
work areas. During this rehabilitation time, mine output was limited to old
exposed workings. The mines came back on stream in June 2008 and mine production
output increased monthly during the rest of 2008. Some of the completed upgrade
projects in 2008 were: mine development of 2,197 metres, shaft safety upgrades,
mine equipment rehabilitation, crushing circuit rehabilitation, new concentrate
load-out, new assay lab, new mechanic&#146;s shop, tailings dam phase 2 expansion and
drill road/pad replanting of 2,000 trees. During 2008 there were three new
discoveries at Guanajuato: the 3785 zone, the San Jose vein and the Lucero vein.
</P>
<P align=justify>During 2008, the Company raised approximately $2.1 million
through the issuance of special warrants.</P>
<P align=center>8 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>3.2</B> </TD>
    <TD width="95%" align=left><B>Significant Acquisitions</B>
</TD></TR></TABLE>
<P align=justify>No significant acquisitions for which disclosure is required
under Part 8 of National Instrument 51-102 were completed by the Company during
its most recently completed financial year. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>ITEM 4:</B> </TD>
    <TD width="90%" align=left><B>DESCRIPTION OF THE BUSINESS</B>
  </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
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  <TR vAlign=top>
    <TD align=left ><B>4.1</B> </TD>
    <TD width="95%" align=left><B>General Description</B> </TD></TR></TABLE>
<P align=justify><B><I>The Business of the Company </I></B></P>
<P align=justify>The Company&#146;s principal business activities are the evaluation,
acquisition, exploration, development and exploitation of mineral properties.
The Company produces silver-gold from its underground mines at Guanacevi and
Guanajuato in Mexico. </P>
<P align=justify><B><I>Number of Employees </I></B></P>
<P align=justify>The Company has approximately 800 full and part-time employees.
</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
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  <TR vAlign=top>
    <TD align=left ><B>4.2</B> </TD>
    <TD width="95%" align=left><B>Risk Factors</B> </TD></TR></TABLE>
<P align=justify>The Company&#146;s ability to generate revenues and profits from its
mineral properties, or any other mineral property it may acquire, is dependent
upon a number of factors, including, without limitation, the following risk
factors. </P>
<P align=justify><B><I>Precious and Base Metal Price Fluctuations
<BR></I></B>The profitability of the precious and base metal operations in which
the Company has an interest will be significantly affected by changes in the
market prices of precious and base metals. Prices for precious and base metals
fluctuate on a daily basis, have historically been subject to wide fluctuations
and are affected by numerous factors beyond the control of the Company such as
the level of interest rates, the rate of inflation, central bank transactions,
world supply of the precious and base metals, foreign currency exchange rates,
international investments, monetary systems, speculative activities,
international economic conditions and political developments. The exact effect
of these factors cannot be accurately predicted, but the combination of these
factors may result in the Company not receiving adequate returns on invested
capital or the investments retaining their respective values. Declining market
prices for these metals could materially adversely affect the Company&#146;s
operations and profitability.</P>
<P align=justify><B><I>Fluctuations in the price of consumed commodities
<BR></I></B>Prices and availability of commodities consumed or used in
connection with exploration, development and mining, such as natural gas,
diesel, oil, electricity, cyanide and other reagents fluctuate affecting the
costs of production at our operations. These fluctuations can be unpredictable,
can occur over short periods of time and may have a materially adverse impact on
our operating costs or the timing and costs of various projects. Our general
policy is not to hedge our exposure to changes in prices of the commodities we
use in our business.</P>
<P align=justify><B><I>Foreign Exchange Rate Fluctuations <BR></I></B>Operations
in Mexico and Canada are subject to foreign currency exchange fluctuations. The
Company raises its funds through equity issuances which are priced in Canadian
dollars, and the majority of the exploration costs of the Company are
denominated in United States dollars and Mexican pesos. The Company may suffer
losses due to adverse foreign currency fluctuations.</P>
<P align=center>9 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify><B><I>Competitive Conditions <BR></I></B>Significant
competition exists for natural resource acquisition opportunities. As a result
of this competition, some of which is with large, well established mining
companies with substantial capabilities and significant financial and technical
resources, the Company may be unable to either compete for or acquire rights to
exploit additional attractive mining properties on terms it considers
acceptable. Accordingly, there can be no assurance that the Company will be able
to acquire any interest in additional projects that would yield reserves or
results for commercial mining operations.</P>
<P align=justify><B><I>Operating Hazards and Risks <BR></I></B>Mining operations
generally involve a high degree of risk, which even a combination of experience,
knowledge and careful evaluation may not be able to overcome. These risks
include, but are not limited to, the following: environmental hazards,
industrial accidents, third party accidents, unusual or unexpected geological
structures or formations, fires, power outages, labour disruptions, floods,
explosions, cave-ins, land-slides, acts of God, periodic interruptions due to
inclement or hazardous weather conditions, earthquakes, war, rebellion,
revolution, delays in transportation, inaccessibility to property, restrictions
of courts and/or government authorities, other restrictive matters beyond the
reasonable control of the Company, and the inability to obtain suitable or
adequate machinery, equipment or labour and other risks involved in the
operation of mines.</P>
<P align=justify>Operations in which the Company has a direct or indirect
interest will be subject to all the hazards and risks normally incidental to
exploration, development and production of precious and base metals, any of
which could result in work stoppages, delayed production and resultant losses,
increased production costs, asset write downs, damage to or destruction of mines
and other producing facilities, damage to life and property, environmental
damage and possible legal liability for any or all damages. The Company may
become subject to liability for pollution, cave-ins or hazards against which it
cannot insure or against which it may elect not to insure. Any compensation for
such liabilities may have a material, adverse effect on the Company&#146;s financial
position.</P>
<P align=justify>Our property, business interruption and liability insurance may
not provide sufficient coverage for losses related to these or other hazards.
Insurance against certain risks, including certain liabilities for environmental
pollution, may not be available to us or to other companies within the industry
at reasonable terms or at all. In addition, our insurance coverage may not
continue to be available at economically feasible premiums, or at all. Any such
event could have a material adverse affect on our business.</P>
<P align=justify><B><I>Mining Operations <BR></I></B>The capital costs required
by the Company&#146;s projects may be significantly higher than anticipated. Capital
and operating costs, production and economic returns, and other estimates
contained in the Company&#146;s current technical reports, may differ significantly
from those provided for in future studies and estimates and from management
guidance, and there can be no assurance that the Company&#146;s actual capital and
operating costs will not be higher than currently anticipated. In addition,
delays to construction and exploration schedules may negatively impact the net
present value and internal rates of return of the Company&#146;s mineral properties
as set forth in the applicable technical report. Similarly, there can be no
assurance that historical rates of production, grades of ore processed, rates of
recoveries or mining cash costs will not experience fluctuations or differ
significantly from current levels over the course of the mining operations
conducted by the Company.</P>
<P align=justify>In addition, there can be no assurance that the Company will be
able to continue to extend the production from its current operations through
exploration and drilling programs.</P>
<P align=justify><B><I>Infrastructure <BR></I></B>Mining, processing,
development and exploration activities depend, to one degree or another, on
adequate infrastructure. Reliable roads, bridges, power sources and water supply
are important determinants, which affect capital and operating costs. The lack
of availability on acceptable terms or the delay in the availability of any one
or more of these items could prevent or delay exploitation or development of the
Company&#146;s projects. If adequate infrastructure is not available
in a timely manner, there can be no assurance that the exploitation or
development of the Company&#146;s projects will be commenced or completed on a timely
basis, if at all; the resulting operations will achieve the anticipated
production volume, or the construction costs and ongoing operating costs
associated with the exploitation and/or development of the Company&#146;s advanced
projects will not be higher than anticipated. In addition, unusual or infrequent
weather phenomena, sabotage, government or other interference in the maintenance
or provision of such infrastructure could adversely affect the Company&#146;s
operations and profitability.</P>
<P align=center>10 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify><B><I>Exploration and Development <BR></I></B>There is no
assurance given by the Company that its exploration and development programs and
properties will result in the discovery, development or production of a
commercially viable ore body or yield new reserves to replace or expand current
reserves.</P>
<P align=justify>The business of exploration for minerals and mining involves a
high degree of risk. Few properties that are explored are ultimately developed
into producing mines. At this time, apart from the mineral reserves on the
Company&#146;s Guanacevi Mines Project and Guanajuato Mines Project, none of the
Company&#146;s properties have any defined ore-bodies with proven reserves.</P>
<P align=justify>The economics of developing silver, gold and other mineral
properties are affected by many factors including capital and operating costs,
variations of the tonnage and grade of ore mined, fluctuating mineral markets,
and such other factors as government regulations, including regulations relating
to royalties, allowable production, importing and exporting of minerals and
environmental protection. Depending on the prices of silver, gold or other
minerals produced, the Company may determine that it is impractical to commence
or continue commercial production. Substantial expenditures are required to
discover an ore-body, to establish reserves, to identify the appropriate
metallurgical processes to extract metal from ore, and to develop the mining and
processing facilities and infrastructure. The marketability of any minerals
acquired or discovered may be affected by numerous factors which are beyond the
Company&#146;s control and which cannot be accurately foreseen or predicted, such as
market fluctuations, conditions for precious and base metals, the proximity and
capacity of milling and smelting facilities, and such other factors as
government regulations, including regulations relating to royalties, allowable
production, importing and exporting minerals and environmental protection. In
order to commence exploitation of certain properties presently held under
exploration concessions, it is necessary for the Company to apply for an
exploitation concession. There can be no guarantee that such a concession will
be granted. Unsuccessful exploration or development programs could have a
material adverse impact on the Company&#146;s operations and profitability.</P>
<P align=justify><B><I>Calculation of Reserves and Resources and Precious Metal
Recoveries <BR></I></B>There is a degree of uncertainty attributable to the
calculation and estimates of reserves and resources and their corresponding
metal grades to be mined and recovered. Until reserves or resources are actually
mined and processed, the quantities of mineralization and metal grades must be
considered as estimates only. Any material change in the quantity of mineral
reserves, mineral resources, grades and recoveries may affect the economic
viability of the Company&#146;s properties.</P>
<P align=justify><B><I>Replacement of Reserves and Resources <BR></I></B>The
Guanacevi and Guanajuato mines are the Company&#146;s current sources of production.
Current life-of-mine plans provide for a defined production life for mining at
the Company&#146;s mines. If the Company&#146;s mineral reserves and resources are not
replaced either by the development or discovery of additional reserves and/or
extension of the life-of-mine at its current operating mines or through the
acquisition or development of an additional producing mine, this could have an
adverse impact on the Company&#146;s future cash flows, earnings, results of
operations and financial condition, including as a result of requirements to
expend funds for reclamation and decommissioning.</P>
<P align=justify><B><I>Acquisition Strategy <BR></I></B>As part of the Company&#146;s
business strategy, it has sought and will continue to seek new mining and
development opportunities in the mining industry. In pursuit of such
opportunities, it may fail to select appropriate acquisition candidates, negotiate appropriate
acquisition terms, conduct sufficient due diligence to determine all related
liabilities or to negotiate favourable financing terms. The Company may
encounter difficulties in transitioning the business, including issues with the
integration of the acquired businesses or its personnel into the Company. The
Company cannot assure that it can complete any acquisition or business
arrangement that it pursues, or is pursuing, on favourable terms, or that any
acquisitions or business arrangements completed will ultimately benefit its
business.</P>
<P align=center>11 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify><B><I>Integration of New Acquisitions <BR></I></B>The Company&#146;s
success at completing any acquisitions will depend on a number of factors,
including, but not limited to: identifying acquisitions which fit the Company&#146;s
strategy; negotiating acceptable terms with the seller of the business or
property to be acquired; and obtaining approval from regulatory authorities in
the jurisdictions of the business or property to be acquired.</P>
<P align=justify>If the Company does make further acquisitions, any positive
effect on the Company&#146;s results will depend on a variety of factors, including,
but not limited to: assimilating the operations of an acquired business or
property in a timely and efficient manner; maintaining the Company&#146;s financial
and strategic focus while integrating the acquired business or property;
implementing uniform standards, controls, procedures and policies at the
acquired business, as appropriate; and to the extent that the Company makes an
acquisition outside of markets in which it has previously operated, conducting
and managing operations in a new operating environment and under a new
regulatory regime where it has no direct experience.</P>
<P align=justify>Acquiring additional businesses or properties could place
increased pressure on the Company&#146;s cash flow if such acquisitions involve cash
consideration or the assumption of obligations requiring cash payments. The
integration of the Company&#146;s existing operations with any acquired business will
require significant expenditures of time, attention and funds. Achievement of
the benefits expected from consolidation would require the Company to incur
significant costs in connection with, among other things, implementing financial
and planning systems. The Company may not be able to integrate the operations of
a recently acquired business or restructure the Company&#146;s previously existing
business operations without encountering difficulties and delays. In addition,
this integration may require significant attention from the Company&#146;s management
team, which may detract attention from the Company&#146;s day-to-day operations. Over
the short-term, difficulties associated with integration could have a material
adverse effect on the Company&#146;s business, operating results, financial condition
and the price of the Company&#146;s common shares. In addition, the acquisition of
mineral properties may subject the Company to unforeseen liabilities, including
environmental liabilities.</P>
<P align=justify><B><I>Foreign Operations <BR></I></B>The Company&#146;s operations
are currently conducted through subsidiaries principally in Mexico and, as such,
its operations are exposed to various levels of political, economic and other
risks and uncertainties which could result in work stoppages, blockades of the
Company&#146;s mining operations and appropriation of assets. Some of the Company&#146;s
operations are located in areas where Mexican drug cartels operate. These risks
and uncertainties vary from region to region and include, but are not limited
to, terrorism; hostage taking; local drug gang activities; military repression;
expropriation; extreme fluctuations in currency exchange rates; high rates of
inflation; labour unrest; the risks of war or civil unrest; renegotiation or
nullification of existing concessions, licenses, permits and contracts; illegal
mining; changes in taxation policies; restrictions on foreign exchange and
repatriation; and changing political conditions, currency controls and
governmental regulations that favour or require the awarding of contracts to
local contractors or require foreign contractors to employ citizens of, or
purchase supplies from, a particular jurisdiction.</P>
<P align=justify>Local opposition to mine development projects could arise in
Mexico, and such opposition could be violent. There can be no assurance that
such local opposition will not arise with respect to the Company&#146;s Mexican
operations. If the Company were to experience resistance or unrest in connection
with its Mexican operations, it could have a material adverse effect on its
operations and profitability.</P>
<P align=center>12 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify>To the extent the Company acquires mineral properties in
jurisdictions other than Mexico, it may be subject to similar and additional
risks with respect to its operations in those jurisdictions.</P>
<P align=justify><B><I>Government Regulation <BR></I></B>The Company&#146;s
operations, exploration and development activities are subject to extensive
foreign federal, state and local laws and regulations governing such matters as
environmental protection, management and use of toxic substances and explosives,
management of natural resources, health, exploration and development of mines,
production and post-closure reclamation, safety and labour, mining law reform,
price controls import and export laws, taxation, maintenance of claims, tenure,
government royalties and expropriation of property. There is no assurance that
future changes in such regulation, if any, will not adversely affect the
Company&#146;s operations. The activities of the Company require licenses and permits
from various governmental authorities.</P>
<P align=justify>The costs associated with compliance with these laws and
regulations are substantial and possible future laws and regulations, changes to
existing laws and regulations and more stringent enforcement of current laws and
regulations by governmental authorities, could cause additional expenses,
capital expenditures, restrictions on or suspensions of the Company&#146;s operations
and delays in the development of its properties. Moreover, these laws and
regulations may allow governmental authorities and private parties to bring
lawsuits based upon damages to property and injury to persons resulting from the
environmental, health and safety practices of the Company&#146;s past and current
operations, or possibly even those actions of parties from whom the Company
acquired its mines or properties, and could lead to the imposition of
substantial fines, penalties or other civil or criminal sanctions. The Company
retains competent and well trained individuals and consultants in jurisdictions
in which it does business, however, even with the application of considerable
skill the Company may inadvertently fail to comply with certain laws. Such
events can lead to financial restatements, fines, penalties, and other material
negative impacts on the Company.</P>
<P align=justify><B><I>Mexican Tax Assessments <BR></I></B>As disclosed under
&#148;Regulatory Actions&#148; on page 49, one of the Company&#146;s subsidiaries in Mexico has
received a tax assessment from Mexican fiscal authorities while another
subsidiary&#146;s 2006 tax return is currently being audited by Mexican fiscal
authorities.</P>
<P align=justify>While the Company is of the view that the tax assessment has no
legal merit and is contesting this, there is no assurance that the Company will
be successful or that the Company will not have to pay the full amount of the
assessment plus interest and penalties. In the event the Company is
unsuccessful, this could negatively impact the Company&#146;s financial position and
create difficulties for the Company in the future in dealing with Mexican fiscal
authorities. </P>
<P align=justify>Although the audit of the subsidiary&#146;s 2006 tax return is
ongoing, the Company has estimated that there is no significant tax
exposure.</P>
<P align=justify><B><I>Obtaining and Renewing of Government Permits
<BR></I></B>In the ordinary course of business, the Company is required to
obtain and renew government permits for the operation and expansion of existing
operations or for the development, construction and commencement of new
operations. Obtaining or renewing the necessary governmental permits is a
complex and time-consuming process involving numerous jurisdictions and possibly
involving public hearings and costly undertakings on the Company&#146;s part. The
duration and success of the Company&#146;s efforts to obtain and renew permits are
contingent upon many variables not within its control including the
interpretation of applicable requirements implemented by the permitting
authority. The Company may not be able to obtain or renew permits that are
necessary to its operations, or the cost to obtain or renew permits may exceed
what the Company believes it can recover from a given property once in
production. Any unexpected delays or costs associated with the permitting
process could delay the development or impede the operation of a mine, which
could adversely impact the Company&#146;s operations and profitability.</P>
<P align=center>13 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify><B><I>Environmental Factors <BR></I></B>All phases of the
Company&#146;s operations are subject to environmental regulation in the various
jurisdictions in which it operates. Environmental legislation is evolving in a
manner which will require stricter standards and enforcement, increased fines
and penalties for non-compliance, more stringent environmental assessments of
proposed projects and a heightened degree of responsibility for companies and
their officers, directors and employees. There is no assurance that any future
changes in environmental regulation, will not adversely affect the Company&#146;s
operations. The costs of compliance with changes in government regulations have
the potential to reduce the profitability of future operations. Environmental
hazards that may have been caused by previous or existing owners or operators
may exist on the Company&#146;s mineral properties, but are unknown to the Company at
the present.</P>
<P align=justify><B><I>Title to Assets <BR></I></B>Although the Company has or
will receive title opinions for any properties in which it has a material
interest, there is no guarantee that title to such properties will not be
challenged or impugned. The Company has not conducted surveys of the claims in
which it holds direct or indirect interests and, therefore, the precise area and
location of such claims may be in doubt. The Company&#146;s claims may be subject to
prior unregistered agreements or transfers or native land claims and title may
be affected by unidentified or unknown defects. The Company has conducted as
thorough an investigation as possible on the title of properties that it has
acquired or will be acquiring to be certain that there are no other claims or
agreements that could affect its title to the concessions or claims. If title to
the Company&#146;s properties is disputed it may result in the Company paying
substantial costs to settle the dispute or clear title and could result in the
loss of the property, which events may affect the economic viability of the
Company.</P>
<P align=justify><B><I>Uncertainty of Funding <BR></I></B>The Company has
limited financial resources, and the mineral claims in which the Company has an
interest or an option to acquire an interest require financial expenditures to
be made by the Company. There can be no assurance that adequate funding will be
available to the Company so as to exercise its option or to maintain its
interests once those options have been exercised. Further exploration work and
development of the properties in which the Company has an interest or option to
acquire depend upon the Company&#146;s ability to obtain financing through joint
venturing of projects, debt financing or equity financing or other means.
Failure to obtain financing on a timely basis could cause the Company to forfeit
all or parts of its interests in mineral properties or reduce or terminate its
operations.</P>
<P align=justify><B><I>Agreements with Other Parties <BR></I></B>The Company has
entered into agreements with other parties relating to the exploration,
development and production of its properties. The Company may, in the future, be
unable to meet its share of costs incurred under agreements to which it is a
party, and the Company may have its interest in the properties subject to such
agreements reduced as a result. Furthermore, if other parties to such agreements
do not meet their share of such costs, the Company may be unable to finance the
costs required to complete recommended programs.</P>
<P align=justify><B><I>Employee Recruitment and Retention <BR></I></B>Recruiting
and retaining qualified personnel is critical to the Company&#146;s success. The
Company is dependent on the services of key executives including the Company&#146;s
President and Chief Executive Officer and other highly skilled and experienced
executives and personnel focused on managing the Company&#146;s interests. The number
of persons skilled in acquisition, exploration, development and operation of
mining properties are limited and competition for such persons is intense. As
the Company&#146;s business activity grows, the Company will require additional key
financial, administrative and mining personnel as well as additional operations
staff. We could experience increases in our recruiting and training costs and
decreases in our operating efficiency, productivity and profit margins. If we
are not able to attract, hire and retain qualified personnel, the efficiency of
our operations could be impaired, which could have an adverse impact on the
Company&#146;s future cash flows, earnings, results of operations and financial
condition.</P>
<P align=center>14 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify><B><I>Potential Conflicts of Interest <BR></I></B>The directors
and officers of the Company may serve as directors and/or officers of other
public and private companies, and may devote a portion of their time to manage
other business interests. This may result in certain conflicts of interest. To
the extent that such other companies may participate in ventures in which the
Company is also participating, such directors and officers of the Company may
have a conflict of interest in negotiating and reaching an agreement with
respect to the extent of each company&#146;s participation. The laws of British
Columbia, Canada, require the directors and officers to act honestly, in good
faith, and in the best interests of the Company and its shareholders. However,
in conflict of interest situations, directors and officers of the Company may
owe the same duty to another company and will need to balance the competing
obligations and liabilities of their actions.</P>
<P align=justify>There is no assurance that the needs of the Company will
receive priority in all cases. From time to time, several companies may
participate together in the acquisition, exploration and development of natural
resource properties, thereby allowing these companies to: (i) participate in
larger properties and programs; (ii) acquire an interest in a greater number of
properties and programs; and (iii) reduce their financial exposure to any one
property or program. A particular company may assign, at its cost, all or a
portion of its interests in a particular program to another affiliated company
due to the financial position of the company making the assignment. In
determining whether or not the Company will participate in a particular program
and the interest therein to be acquired by it, it is expected that the directors
and officers of the Company will primarily consider the degree of risk to which
the Company may be exposed and its financial position at that time.</P>
<P align=justify><B><I>Third Party Reliance <BR></I></B>The Company&#146;s rights to
acquire interests in certain mineral properties have been granted by third
parties who themselves may hold only an option to acquire such properties. As a
result, the Company may have no direct contractual relationship with the
underlying property holder.</P>
<P align=justify><B><I>Absolute Assurance on Financial Statements <BR></I></B>We
prepare our financial reports in accordance with accounting policies and methods
prescribed by Canadian generally accepted accounting principles. In the
preparation of financial reports, management may need to rely upon assumptions,
make estimates or use their best judgment in determining the financial condition
or results of operations of the Company. Significant accounting details are
described in more detail in the notes to our annual consolidated financial
statements for the year ended December 31, 2010. In order to have a reasonable
level of assurance that financial transactions are properly authorized, assets
are safeguarded against unauthorized or improper use and transactions are
properly recorded and reported, we have implemented and continue to analyze our
internal control systems for financial reporting. Although we believe our
financial reporting and financial statements are prepared with reasonable
safeguards to ensure reliability, we cannot provide absolute assurance in that
regard.</P>
<P align=center>15 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify><B><I>General Economic Conditions <BR></I></B>The unprecedented
events in global financial markets during the last few years have had a profound
effect on the global economy. Many industries, including the gold and silver
mining industry, are affected by these market conditions. Some of the key
effects of the current financial market turmoil include contraction in credit
markets resulting in a widening of credit risk, devaluations and high volatility
in global equity, commodity, foreign exchange and precious metal markets, and a
lack of market liquidity. A continued or worsened slowdown in the financial
markets or other economic conditions, including but not limited to, consumer
spending, employment rates, business conditions, inflation, fuel and energy
costs, consumer debt levels, lack of available credit, the state of the
financial markets, interest rates, and tax rates may adversely affect the
Company&#146;s growth and profitability.</P>
<P align=justify>Specifically:<br>
  &#149 &nbsp;the global credit/liquidity crisis could affect the cost
and availability of financing and our overall liquidity;&nbsp;<BR>
&#149 the
volatility of gold and silver prices affects our revenues, profits and cash
flow;&nbsp;<BR>
&#149 volatile energy prices, commodity and consumables prices and
currency exchange rates affect our production costs; and&nbsp;<BR>
&#149 the
devaluation and volatility of global stock markets affects the valuation of our
equity securities.</P>
<P align=justify>These factors could have a material adverse effect on the
Company&#146;s financial condition and results of operations.</P>
<P align=justify><B><I>Passive Foreign Investment Company Consequences
<BR></I></B>The Company has not made a determination as to whether it is
considered a &#147;passive foreign investment company&#148; (a &#147;PFIC&#148;) as such term is
defined in the U.S. Internal Revenue Code of 1986, as amended (the &#147;Code&#148;), for
U.S. federal income tax purposes for the current tax year and any prior tax
years. A non-U.S. corporation generally will be considered a PFIC for any
taxable year if either (1) at least 75% of its gross income is passive income or
(2) at least 50% of the value of its assets (based on an average of the
quarterly values of the assets during a taxable year) is attributable to assets
that produce or are held for the production of passive income.</P>
<P align=justify>In general, if the Company is or becomes a PFIC, any gain
recognized on the sale of securities and any &#147;excess distributions&#148; (as
specifically defined in the Code) paid on the securities must be rateably
allocated to each day in a U.S. taxpayer&#146;s holding period for the securities.
The amount of any such gain or excess distribution allocated to prior years of
such U.S. taxpayer&#146;s holding period for the securities generally will be subject
to U.S. federal income tax at the highest tax applicable to ordinary income in
each such prior year, and the U.S. taxpayer will be required to pay interest on
the resulting tax liability for each such prior year, calculated as if such tax
liability had been due in each such prior year.</P>
<P align=justify><B><I>Current market events and conditions <BR></I></B>In 2007,
2008 and into 2009, the U.S. credit markets experienced serious disruption due
to a deterioration in residential property values, defaults and delinquencies in
the residential mortgage market (particularly, sub-prime and non-prime
mortgages) and a decline in the credit quality of mortgage backed securities.
These problems led to a slow-down in residential housing market transactions,
declining housing prices, delinquencies in non-mortgage consumer credit and a
general decline in consumer confidence. These conditions continued and worsened
in 2008 and 2009, causing a loss of confidence in the broader U.S. and global
credit and financial markets and resulting in the collapse of, and government
intervention in, major banks, financial institutions and insurers and creating a
climate of greater volatility, less liquidity, widening of credit spreads, a
lack of price transparency, increased credit losses and tighter credit
conditions. In addition, general economic indicators have deteriorated,
including declining consumer sentiment, increased unemployment and declining
economic growth and uncertainty about corporate earnings.</P>
<P align=justify>These unprecedented disruptions in the credit and financial
markets have had a significant material adverse effect on a number of financial
institutions and have limited access to capital and credit for many companies. These disruptions could, among other things, make it
more difficult for the Company to obtain, or increase its cost of obtaining,
capital and financing for its operations. The Company&#146;s access to additional
capital may not be available on terms acceptable to it or at all.</P>
<P align=center>16 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify><B><I>Substantial Volatility of Share Price <BR></I></B>In
recent years, the securities markets in the United States and Canada have
experienced a high level of price and volume volatility, and the securities of
many mineral exploration companies have experienced wide fluctuations in price
which have not necessarily been related to the operating performance, underlying
asset values or prospects of such companies. The price of the Company&#146;s common
shares is also likely to be significantly affected by short-term changes in
mineral prices or in the Company&#146;s financial condition or results of operations
as reflected in its quarterly financial reports. Other factors unrelated to the
Company&#146;s performance that may have an effect on the price of its common shares
include the following: the extent of analytical coverage available to investors
concerning the Company&#146;s business may be limited if investment banks with
research capabilities do not follow the Company&#146;s securities; lessening in
trading volume and general market interest in the Company&#146;s securities may
affect an investor&#146;s ability to trade significant numbers of the Company&#146;s
common shares; the size of the Company&#146;s public float may limit the ability of
some institutions to invest in the Company&#146;s securities; and a substantial
decline in the price of the Company&#146;s common shares that persists for a
significant period of time could cause the Company&#146;s securities to be delisted
from the Toronto Stock Exchange and NYSE Amex, further reducing market
liquidity.</P>
<P align=justify><B><I>Differences in U.S. and Canadian reporting of reserves
and resources <BR></I></B>The Company&#146;s reserve and resource estimates are not
directly comparable to those made in filings subject to SEC reporting and
disclosure requirements, as the Company generally reports reserves and resources
in accordance with Canadian practices. These practices are different from those
used to report reserve and resource estimates in reports and other materials
filed with the SEC. It is Canadian practice to report measured, indicated and
inferred resources, which are not permitted in disclosure filed with the SEC by
United States issuers. 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. United States investors are cautioned
not to assume that all or any part of measured or indicated resources will ever
be converted into reserves.</P>
<P align=justify>Further, "inferred resources" have a great amount of
uncertainty as to their existence and as to whether they can be mined legally or
economically. Disclosure of "contained ounces" is permitted disclosure under
Canadian regulations; however, the SEC permits issuers to report "resources"
only as in-place tonnage and grade without reference to unit of metal
measures.</P>
<P align=justify>Accordingly, information concerning descriptions of
mineralization, reserves and resources contained in this AIF, or in the
documents incorporated herein by reference, may not be comparable to information
made public by United States companies subject to the reporting and disclosure
requirements of the SEC.</P>
<P align=justify><B><I>Adequacy of internal control over financial reporting as
per the requirements of the U.S. Sarbanes-Oxley Act <BR></I></B>The Company
documented and tested during its most recent fiscal year, its internal control
procedures in order to satisfy the requirements of Section 404 of the U.S.
Sarbanes-Oxley Act ("SOX"). SOX requires an annual assessment by management of
the effectiveness of the Company&#146;s internal control over financial reporting and
an attestation report by the Company&#146;s independent auditor addressing this
assessment. The Company may fail to achieve and maintain the adequacy of its
internal control over financial reporting as such standards are modified,
supplemented, or amended from time to time, and the Company may not be able to
ensure that it can conclude on an ongoing basis that it has effective internal
control over financial reporting in accordance with Section 404 of SOX. The
Company&#146;s 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 its financial statements, which in turn could harm the Company&#146;s
business and negatively affect the trading price of its common shares or market
value of its other securities. In addition, any failure to implement required
new or improved controls, or difficulties encountered in their implementation, could harm the Company&#146;s operating results or
cause it to fail to meet its reporting obligations. Future acquisitions of
companies may provide the Company with challenges in implementing the required
processes, procedures and controls in its acquired operations. Acquired
companies may not have disclosure controls and procedures or internal control
over financial reporting that are as thorough or effective as those required by
securities laws currently applicable to the Company.</P>
<P align=center>17 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify>No evaluation can provide complete assurance that the Company&#146;s
internal control over financial reporting will detect or uncover all failures of
persons within the Company to disclose material information required to be
reported. The effectiveness of the Company&#146;s control and procedures could also
be limited by simple errors or faulty judgments. In addition, as the Company
continues to expand, the challenges involved in implementing appropriate
internal control over financial reporting will increase and will require that
the Company continue to improve its internal control over financial reporting.
Although the Company intends to devote substantial time and incur substantial
costs, as necessary, to ensure ongoing compliance, the Company cannot be certain
that it will be successful in complying with Section 404 of SOX.</P>
<P align=justify><B><I>Potential dilution of present and prospective
shareholdings <BR></I></B>In order to finance future operations and development
efforts, the Company may raise funds through the issue of common shares or the
issue of securities convertible into common shares. The Company cannot predict
the size of future issues of common shares or the issue of securities
convertible into common shares or the effect, if any, that future issues and
sales of the Company&#146;s common shares will have on the market price of its common
shares. Any transaction involving the issue of shares, or securities convertible
into shares, could result in dilution, possibly substantial, to present and
prospective holders of shares.</P>
<P align=justify><B><I>Lack of Dividends <BR></I></B>No dividends on the
Company&#146;s common shares have been paid to date. The Company currently plans to
retain all future earnings and other cash resources, if any, for the future
operation and development of its business. Payment of any future dividends, if
any, will be at the discretion of the Board of Directors after taking into
account many factors, including the Company&#146;s operating results, financial
condition, and current and anticipated cash needs.</P>
<P align=justify><B><I>Future Sales of Common Shares by Existing Shareholders
<BR></I></B>Sales of a large number of the Company&#146;s common shares in the public
markets, or the potential for such sales, could decrease the trading price of
the common shares and could impair the Company&#146;s ability to raise capital
through future sales of common shares.</P>
<P align=justify><B><I>Claims Under U.S. Securities Laws <BR>
</I></B>The
enforcement by investors of civil liabilities under the federal securities laws
of the United States may be affected adversely by the fact that the Company is
incorporated under the laws of British Columbia, Canada, that the independent
registered chartered accountants who have audited the Company&#146;s financial
statements and some or all of the Company&#146;s directors and officers may be
residents of Canada or elsewhere, and that all or a substantial portion of the
Company&#146;s assets and said persons are located outside the United States. As a
result, it may be difficult for holders of the Company&#146;s common shares to effect
service of process within the United States upon people who are not residents of
the United States or to realize in the United States upon judgments of courts of
the United States predicated upon civil liabilities under the federal securities
laws of the United States.</P>
<P align=justify><B><I>Financial Instruments <BR></I></B>The Company currently
has an investment in Notes formerly asset backed commercial paper. There can be
no assurances that the value of the Notes will not experience fluctuations in
value.</P>
<P align=justify>From time to time, the Company may use certain financial
instruments to manage the risks associated with changes in silver prices,
interest rates and foreign currency exchange rates. The use of financial
instruments involves certain inherent risks including, among other things: (i)
credit risk, the risk of default on amounts owing to the Company by the
counterparties with which Company has entered into such transaction; (ii) market liquidity risk, the risk that the
Company has entered into a position that cannot be closed out quickly, either by
liquidating such financial instrument or by establishing an offsetting position;
(iii) unrealized mark-to-market risk, the risk that, in respect of certain
financial instruments, an adverse change in market prices for commodities,
currencies or interest rates will result in the Company incurring an unrealized
mark-to-market loss in respect of such derivative products.</P>
<P align=center>18 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify><B><I>Conversion to IFRS <BR></I></B>The Company&#146;s conversion
to International Financial Reporting Standards (&#147;IFRS&#148;) may materially impact
the Company&#146;s reported financial position and results of operations. The
conversion to IFRS may affect the Company&#146;s accounting policies, information
technology systems, internal controls and disclosure controls and procedures.
</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>4.3</B> </TD>
    <TD width="95%" align=left><B>Asset-Backed Securities Outstanding</B>
  </TD></TR></TABLE>
<P align=justify>The Company has not issued any asset-backed securities. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>4.4</B> </TD>
    <TD width="95%" align=left><B>Mineral Projects</B> </TD></TR></TABLE>
<P align=justify>To satisfy the reporting requirements of National Instrument
51-102F2 with respect to the Company&#146;s mineral projects, the Company has opted,
as allowed by the Instrument, to reproduce the summaries from the technical
reports on the respective material properties.</P>
<P align=justify><B><I><U>Guanacevi Mines Project, Durango State,
Mexico</U></I></B></P>
<P align=justify>The following summary of the Guanacevi Mines Project is
extracted from a technical report titled &#147;<I>NI 43-101 Technical Report Audit of
the Resource and Reserve Estimates for the Guanacevi Project, Durango State,
Mexico</I>&#148; prepared by William J. Lewis, BSc., P.Geo., Charley Z. Murahwi,
M.Sc., P.Geo, MAusIMM, Robert J. Leader, P. Eng. and Dibya Kanti Mukhopadhyay,
MAusIMM of Micon International Limited and dated March 15, 2011. The complete
report can be viewed on SEDAR at www.sedar.com. The detailed disclosure
contained in this technical report is incorporated by reference into this
AIF.</P>
<P align=justify>Endeavour Silver Corp. (Endeavour Silver) has retained Micon
International Limited (Micon) to conduct an audit of the updated resource and
reserve estimates for its Guanacev&#237; Mines project, located near the town of
Guanacev&#237; in the northwest part of the State of Durango in Mexico. This
Technical Report constitutes an audit of the December 31, 2010 mineral resource
and reserve estimates conducted on the property by Endeavour Silver. The audit
was performed to ensure that the mineral resources and reserves comply with the
Canadian Institute of Mining, Metallurgy and Petroleum (CIM) standards and
definitions referred to in Canadian National Instrument 43-101 (NI 43-101). </P>
<P align=justify>The previous December 31, 2009 resource and reserve estimates
were the subject of a March 15, 2010 Technical Report by Micon. The current
Micon audit incorporates the exploration and mining data gathered since the
publication of the March, 2010 report. The March, 2010 Endeavour Silver
Technical Report was posted on the System for Electronic Document Analysis and
Retrieval (SEDAR). SEDAR is the filing system developed for the Canadian
Securities Administrators (CSA). </P>
<P align=justify><B>Property Description </B></P>
<P align=justify>The Guanacev&#237; Mines project is located within the Municipality
of Guanacev&#237; in the State of Durango, Mexico, near its northern border with the
state of Chihuahua. The property is accessed by travelling from the city of
Durango, located 260 kilometres (km) southeast. Durango has a modern airport
with daily flights to and from Mexico City and portions of the United States.
The Guanacev&#237; Mines project is located on the edge of the Sierra Madre, a series
of rugged mountains with higher points reaching 3,300 metres (m) above sea
level. The Guanacev&#237; Mines project is located at approximately 105&#176;58'20"W
longitude and 25&#176;54'47"N latitude. </P>
<P align=center>19 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify>The Guanacev&#237; mining district covers an area measuring
approximately 5 km northeast -southwest by 10 km northwest - southeast and
contains more than 50 silver/gold mines. Although only three of the mines are
presently operating, there is considerable mining experience available in the
area. </P>
<P align=justify><B>Ownership </B></P>
<P align=justify>Endeavour Silver holds the Guanacev&#237; Mines project through its
100% owned Mexican subsidiary Endeavour Gold Corporation S.A. de C.V. (Endeavour
Gold). Endeavour Gold holds the project through its two 100% owned subsidiaries
Minera Plata Adelante S.A. de C.V. (Minera Plata Adelante) and Refinadora Plata
Guanacev&#237; S.A. de C.V. (Refinadora Plata Guanacev&#237;). At present, the project is
comprised of 40 mineral concessions. The mineral concessions are not all
contiguous and vary in size, for a total property area of 1,072.11 ha. The
annual 2011 concession tax for the Guanacev&#237; properties is approximately 219,570
Mexican pesos, which is equal to about US $17,566 at an exchange rate of 12.50
pesos to US $1.00. </P>
<P align=justify>On February 9, 2009, Endeavour Silver entered into a mining
exploration agreement with Minerales Monte Blanco S.A. de C.V. (Minerales Monte
Blanco), represented by Sergio Enrique Silva Franco, on the El Porvenir Cuatro
and La Brisa concessions totaling approximately 55.5518 ha. The El Porvenir
Cuatro and La Brisa agreement is an option to earn 100% of these properties over
two years for a total consideration of US $700,000. </P>
<P align=justify>In February, 2010, Endeavour Silver exercised its option to
purchase the El Porvenir Cuatro and La Brisa properties and has now acquired a
100% interest in these properties by paying a total consideration to the vendors
of US $100,000 cash and 136,054 shares on signing the option agreement, and an
additional 71,428 common shares and US $160,000 cash on the early exercise of
the option to purchase. </P>
<P align=justify>In July 2010, Endeavour Silver acquired 100% interest in the
Elizabeth (17.0 ha) and El Calvario (1.3 ha) properties in Guanacev&#237;. The
purchase price of these properties was US$50,000. The El Calvario property is
situated in the central part of San Pedro, adjacent to the historic, high grade
Noche Buena mine and transected by the Noche Buena vein. The Elizabeth property
is situated approximately 1 km east of Endeavour Silver&#146;s Porvenir Mine. </P>
<P align=justify>In addition to the mineral rights, Endeavour Silver has
agreements with various private ranch owners and local Ejidos (El Hacho and San
Pedro) that provide access for exploration and exploitation purposes. </P>
<P align=justify><B>History </B></P>
<P align=justify>It is not known if the indigenous peoples or the Spanish
colonists first began mining in the Guanacev&#237; district but mining extends back
to at least 1535 when the mines were first worked by the Spanish. By the start
of the 18th century, Guanacev&#237; had become an important mining centre in the
Nueva Vizcaya province of Nueva Espa&#241;a (New Spain), as reported by Alexander von
Humboldt in his travels through Nueva Espa&#241;a. However, the Guanacev&#237; mining
district is not as well known today. </P>
<P align=justify>The Guanacev&#237; mining district and the Guanacev&#237; project area
are riddled with mine openings and old workings, in a somewhat haphazard fashion
near surface, representing the earliest efforts at extraction, and more
systematic at depth, which is indicative of later, better organized and
engineered mining. Associated with these openings and workings is a number of
ruins, which represent the mine buildings, chapels and residences of the
inhabitants and indicate the wealth of the mining district during its past.</P>
<P align=justify>The vast bulk of the material which has been extracted from
underground operations through the tunnels, shafts and winzes is scattered over
the hillsides in waste dumps and beneath the foundations of the ruins and modern
buildings. Historically, individual veins or deposits had separate owners and,
in the case of some of the larger veins or deposits, had several owners along
the strike length which resulted in a surfeit of adits and shafts and very
inefficient operations. </P>
<P align=center>20 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify>During the late sixteenth century silver production accounted
for 80% of all exports from Nueva Espa&#241;a, although, by the mid-seventeenth
century silver production collapsed when mercury, necessary to the refining
process, was diverted to the silver mines of Potos&#237; in present day Bolivia.
Collapse of the seventeenth century mining led to widespread bankruptcy among
the miners and hacienda owners; however, in the latter half of the seventeenth
century silver mining began to recover in Nueva Espa&#241;a. By the start of the 18th
century, Guanacev&#237; had become an important mining centre in the Nueva Vizcaya
province. </P>
<P align=justify>The peasant uprisings of 1810 to 1821 were disastrous to the
Mexican mining industry with both the insurgents&#146; soldiers and royalist troops
all but destroying the mining production in Mexico, and the Guanacev&#237; mining
district was not spared during this period. </P>
<P align=justify>The district has experienced several periods of bonanza-grade
production, including the operation of a mint in 1844. The Guanacev&#237; mining
district, however, reached its greatest period of activity at the start of the
20th century, when five processing plants were in operation and more than 15
mines were in production. </P>
<P align=justify>J.R. Southworth in his 1905 volume entitled &#147;The Mines of
Mexico&#148; mentions that Guanacev&#237; is a very rich district and &#147;that many of the
largest capitalists of New York have enormous interests in its mines&#148;.
Southworth mentions that the Barrad&#225;n, Hacienda Wilson, El Carmen, Nueva
Australia and Hacienda Avila were all good mines and properties within the
Guanacev&#237; mining district. However, Southworth also mentioned that &#147;considering
the large number of once famous properties in Guanacev&#237;, there are comparatively
few now in operation. The cessation of development has been due to various
causes, though usually not from lack of ore.&#148; </P>
<P align=justify>The vast majority of production came prior to the 1910 Mexican
Revolution with the Guanacev&#237; mining district being known for its high silver
grades. Previous reports noted that the official production records indicate
that a total value of 500 million pesos, or approximately 500 million ounces of
silver and silver equivalents, with a present day value of about US $3.25
billion, had been extracted from this mining district. This makes the Guanacev&#237;
district one of the top five silver mining districts in Mexico on the basis of
past production. </P>
<P align=justify>The extent of historical exploration on the property is
relatively unknown. Prior to management by Endeavour Silver, production was
coming from three mines without the benefit of any systematic exploration
drilling, geological mapping or mine planning. </P>
<P align=justify><B>Geology and Mineralization </B></P>
<P align=justify>The Guanacev&#237; mineral deposits occur as an epithermal low
sulphidation, quartz-carbonate, fracture-filling vein hosted by a structure that
trends approximately N45&#176;W and dips 55&#176; southwest. The fault and vein comprise a
structural system referred to locally as the Santa Cruz vein structure or Santa
Cruz vein fault. The Santa Cruz vein itself has been traced for 5 km along the
trend and averages approximately 3.0 m in width. High-grade mineralization in
the system is not continuous, but occurs in steeply northwest-raking shoots up
to 200 m in strike length. A second vein is located sub-parallel and subjacent
(located in the footwall) to the Santa Cruz vein but is less continuous. The
footwall vein is economically significant in the Porvenir Dos zone and in the
northern portion of deep North Porvenir. </P>
<P align=justify>The Santa Cruz vein is a silver-rich structure with lesser
amounts of gold, lead and zinc. Based on historic production, mineralization has
averaged 500 grams per tonne (g/t) silver and 1 g/t gold over 3 m true width.
The minerals encountered are argentite-acanthite with limited gold, galena,
sphalerite, pyrite and manganese oxides. Gangue minerals noted are barite,
rhodonite, rhodochrosite, calcite, fluorite and quartz. The mineralization down
to Level 6 in the Santa Cruz mine is mainly oxidized with a transition zone of
oxides to sulphides occurring between Levels 6 to 8, although some sulphide ore
was mined above Level 6. Mineralization exhibits evidence of episodic
hydrothermal events which generated finely banded textures. High-grade
mineralization in the district is commonly associated with multiple phases of banding and brecciation. In the Porvenir Dos area and in the
deeper portion of North Porvenir, a footwall-hosted vein is associated with the
Santa Cruz vein structure. In both areas, this footwall vein is either within
Guanacev&#237; Formation footwall rocks or is at the structural contact between the
Guanacev&#237; Formation and Lower Volcanic Sequence andesite. It is banded to
brecciated quartz plus carbonate and contains local scatterings (&lt; 1%) of
sulphides (pyrite&gt;sphalerite &gt;galena&gt;chalcopyrite) and rare pods (&lt;
50 cm) of sulphides. </P>
<P align=center>&nbsp;21 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify><B>Exploration</B></P>
<P align=justify>Exploration data for the Guanacev&#237; Mines project are kept on
file at both the project geological/engineering and exploration offices. The
data are also on file at Endeavour&#146;s exploration administration office,
currently located in the city of Durango, Mexico. The data handling system
includes a Microsoft Excel database, ACAD drafting software and Maptek&#146;s Vulcan
deposit modelling software.</P>
<P align=justify>During 2010, Endeavour Silver spent US $3,930,487 (including
property holding costs) on exploration activities on Porvenir Cuatro, San Pedro
and La Brisa. </P>
<P align=justify>On the whole, exploration results in all the areas investigated
were encouraging. Follow-up work is planned for 2011. </P>
<P align=justify><B>Resource and reserve Estimation </B></P>
<P align=justify><B>Operations Division </B></P>
<P align=justify>For the December 31, 2010 reserve and resource estimates, two
different methodologies have been employed by the Operations Division for the
Guanacev&#237; Mines project. </P>
<P align=justify>The two methodologies used, and the mineralized areas to which
they have been applied are: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>Block modelling for Santa Cruz. </P>
  <LI>
  <P>A separate methodology for Porvenir North, Porvenir Dos, Porvenir Cuatro
  and Alex Breccia as described below. </P></LI></UL>
<P align=justify>For the Porvenir North, Porvenir Dos, Porvenir Cuatro and Alex
Breccia mines, the resource and reserve estimates were completed in a 2-D
horizontal plane. The model was then rotated back to 3-D. Drill holes and
composites were converted into point data with a single 3-D UTM coordinate.
These data were rotated twice: first, a clockwise rotation was applied to align
to the local grid and, second, the data were rotated to horizontal. These point
data, particularly accumulation and thickness, were used for estimation.
Compositing of the drill holes was done in an Excel spreadsheet to vein width.
The composite grades and thicknesses were used in the modelling process. The
footwall surface was then modelled to coincide with the footwall composite
boundary. The modelled thickness was added to the footwall grid on a
cell-by-cell basis to create the hanging wall surface. These two modelled
surfaces were joined together to create a wireframe of the mineralized zone.
Un-estimated blocks were given a vein thickness based on the average thickness
of nearby cells. </P>
<P align=justify><B>Exploration Division </B></P>
<P align=justify>Due to the limited number of data/drill holes, Endeavour
Silver&#146;s Exploration Division has used the traditional polygonal approach for
the estimation of the December 31, 2010 resources for most of the veins or
deposits. The 2-D polygonal method is based on the use of a longitudinal section
to estimate the mineral resources for the Noche Buena, Buena F&#233;, Epsilon-Soto,
La Blanca-Mi Ni&#241;a and Milache deposits in the San Pedro sub-district. Mineral
resource blocks are defined by drawing a polygon around each drill intercept on
a longitudinal section. Before a polygon is drawn, the intercept must be above
the established cut-off grade and meet the 1.5 m minimum width
criterion. A 25 m projection from the centroid of the drill intercept is then
made for indicated resource blocks. When the continuity of mineralization is
determined, an additional 25 m projection is made for inferred resources. Block
volumes are estimated by drawing each block area on a longitudinal section and
measuring this area using AutoCAD. The area of the block is then multiplied by
the average horizontal width of the composited drill intercept to estimate the
volume. </P>
<P align=center>22 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify><B>Audited Reserve and Resource Figures </B></P>
<P align=justify>Micon has audited Endeavour Silver&#146;s updated reserve and
resource estimates for the period ending December 31, 2010. Following the audit,
the accepted figures of the reserve estimate are presented in Table 1.1, while
the accepted figures for Indicated and Inferred mineral resources are presented
in Tables 1.2 and 1.3, respectively. Currently (i.e. as at December 31, 2010),
there are no Measured resources. The mineral reserve figures reported here are
in addition to the reported mineral resources </P>
<P align=justify><B>Table 1.1 <BR></B>December 31, 2010 Proven and Probable
Mineral Reserve Estimate, Guanacev&#237; Mines Project </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="100%">

  <TR vAlign=top>
    <TD bgColor=#eeeeee align=center><B>Reserve Category</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Tonnes</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Silver</B>
      <BR><B>(g/t)</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Gold</B> <BR><B>(g/t)</B>
    </TD>
    <TD bgColor=#eeeeee width="11%"
      align=center><B>Silver<BR></B><B>Equivalent</B> <BR><B>(g/t)</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Silver</B> <BR><B>(oz)</B>
    </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Gold</B> <BR><B>(oz)</B>
    </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Silver</B>
      <BR><B>Equivalent</B> <BR><B>(oz)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Proven </TD>
    <TD width="11%" align=right>466,000 </TD>
    <TD width="11%" align=center>313 </TD>
    <TD width="11%" align=center>0.64 </TD>
    <TD width="11%" align=center>353 </TD>
    <TD width="11%" align=right>4,689,000 </TD>
    <TD width="11%" align=right>&nbsp;9,600 </TD>
    <TD width="11%" align=right>5,283,000 </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff align=left>Probable </TD>
    <TD bgColor=#ffffff width="11%" align=right>816,000 </TD>
    <TD bgColor=#ffffff width="11%" align=center>237 </TD>
    <TD bgColor=#ffffff width="11%" align=center>0.40 </TD>
    <TD bgColor=#ffffff width="11%" align=center>262 </TD>
    <TD bgColor=#ffffff width="11%" align=right>6,218,000 </TD>
    <TD bgColor=#ffffff width="11%" align=right>10,000 </TD>
    <TD bgColor=#ffffff width="11%" align=right>6,866,000 </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Total Proven and Probable</B> </TD>
    <TD width="11%" align=right><B>1,282,000</B> </TD>
    <TD width="11%" align=center><B>265</B> </TD>
    <TD width="11%" align=center><B>0.49</B> </TD>
    <TD width="11%" align=center><B>295</B> </TD>
    <TD width="11%" align=right><B>10,907,000</B> </TD>
    <TD width="11%" align=right><B>20,000</B> </TD>
    <TD width="11%" align=right><B>12,149,000</B> </TD></TR></TABLE></DIV>
<P align=justify><B>Table 1.2 <BR></B>December 31, 2010 Indicated Mineral
Resource Estimate, Guanacev&#237; Mines Project </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="100%">

  <TR vAlign=top>
    <TD bgColor=#eeeeee align=center><BR><BR><B>Resource Category</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><BR><BR><B>Tonnes</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Silver</B> <BR><B>(g/t)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Gold</B> <BR><B>(g/t)</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Silver</B>
      <BR><B>Equivalent</B> <BR><B>(g/t)</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Silver</B> <BR><B>(oz)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Gold</B> <BR><B>(oz)</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Silver</B>
      <BR><B>Equivalent</B> <BR><B>(oz)</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Measured </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>---</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>---</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>---</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>---</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>---</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>---</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>---</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Indicated </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>2,309,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>232 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>0.46 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>259 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>17,215,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>&nbsp; &nbsp;34,200 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>19,247,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Total Measured
      and Indicated</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>2,309,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>232</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>0.46</B> </TD>
    <TD width="11%" align=right><B>259</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>17,215,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right>&nbsp; &nbsp;<B>34,200</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>19,247,000</B> </TD></TR></TABLE></DIV>
<P align=justify><B>Table 1.3 <BR></B>December 31, 2010 Inferred Mineral
Resource Estimate, Guanacev&#237; Mines Project </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="100%">

  <TR vAlign=top>
    <TD bgColor=#eeeeee align=center><BR><BR><B>Resource Category</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><BR><BR><B>Tonnes</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Silver</B> <BR><B>(g/t)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Gold</B> <BR><B>(g/t)</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Silver</B>
      <BR><B>Equivalent</B> <BR><B>(g/t)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Silver</B> <BR><B>(oz)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Gold</B> <BR><B>(oz)</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Silver</B>
      <BR><B>Equivalent</B> <BR><B>(oz)</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Inferred </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>2,070,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>219 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>0.46 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>246 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>14,564,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>30,400 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>16,349,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left><B>Total Inferred</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>2,070,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>219</B> </TD>
    <TD bgColor=#ffffff width="11%" align=right><B>0.46</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>246</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>14,564,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>30,400</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>16,349,000</B> </TD></TR></TABLE></DIV>
<P align=justify>In addition to these reserves and resources, Guanacev&#237; has a
stockpile as detailed in Table 1.4. Although the stockpile was inspected during
Micon&#146;s June, 2010 site visit, it was not subject to the Micon audit. </P>
<P align=justify><B>Table 1.4 <BR></B>December 31, 2010 Stockpile Reserves,
Guanacev&#237;Mines Project </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="100%">

  <TR vAlign=top>
    <TD bgColor=#eeeeee align=center><BR><BR><B>Resource Category</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><BR><BR><B>Tonnes</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Silver</B> <BR><B>(g/t)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Gold</B> <BR><B>(g/t)</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Silver</B>
      <BR><B>Equivalent</B> <BR><B>(g/t)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Silver</B> <BR><B>(oz)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Gold</B> <BR><B>(oz)</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Silver</B>
      <BR><B>Equivalent</B> <BR><B>(oz)</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Proven </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>110,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>313 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>0.50 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>338 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>1,107,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>1,800 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>&nbsp; &nbsp;1,215,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left><B>Total Stockpile</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>110,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>313</B> </TD>
    <TD bgColor=#ffffff width="11%" align=right><B>0.50</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>338</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>1,107,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>1,800</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>&nbsp; &nbsp;<B>1,215,000</B> </TD></TR></TABLE></DIV>
<P align=center>23 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_27></A>
<P align=justify>The process of mineral resource and reserve estimation includes
technical information which requires subsequent calculations or estimates to
derive sub-totals, totals and weighted averages. Such calculations or
estimations inherently involve a degree of rounding and consequently introduce a
margin of error. Where these occur, Micon does not consider them to be material.
The reserve and resource figures in Tables 1.1 through 1.4 have been rounded in
most cases to reflect that the numbers are estimates. Mineral resources that are
not mineral reserves do not have demonstrated economic viability.<B> </B></P>
<P align=justify><B>Development and Operations </B></P>
<P align=justify>For the year ending December 31, 2010, silver production was
2,448,826 oz and gold production was 6,272 oz. Plant throughput for 2010 was
312,087 tonnes at an average grade of 323 g/t silver and 0.73 g/t gold. In 2010,
mill recoveries averaged 75.5% for silver and 85.2% for gold. </P>
<P align=justify>For 2011, Endeavour Silver is forecasting to produce 2.616
million ounces of silver and 5,325 ounces of gold from the Guanacev&#237; Mines
project. Plant throughput for 2011 is forecast at 353,000 t at an estimated
average grade of 304 g/t silver and 0.53 g/t gold. Recoveries are forecast to
average 78% and 82% for silver and gold, respectively. Plant throughput is based
on production from the Porvenir North mine, Porvenir Dos mine and third party
ore bought from local miners. </P>
<P align=justify>Endeavour Silver mine management is currently working on
projects to access the deeper portions of already developed ore zones, as well
as opening up new mineralized zones. </P>
<P align=justify>Two ramps are currently being driven from the Porvenir mine,
one into the deep part of the North Porvenir ore zone, where production has
already begun, and the other into the deeper portion of the Santa Cruz mine ore
zone. The first development headings in Santa Cruz were opened in mid to late
2010. </P>
<P align=justify>A ramp driven into Porvenir Dos in 2009 has been completed.
Seven production levels were in operation in 2010. Endeavour Silver started a
ramp into the Porvenir Cuatro zone in 2010. The development of the first two
levels was complete at the end of 2010. </P>
<P align=justify>Endeavour Silver is continuing to seek additional improvements
and to expand the mineral resources at it operations at the Guanacev&#237; Mines
project. </P>
<P align=justify>The Guanacev&#237; Mines project produces dor&#233; silver bars. However,
potentially economic base metals in new deposits currently under development
(Alex Breccia and Santa Cruz) may be recovered from Endeavour Silver&#146;s
re-commissioned flotation circuit. </P>
<P align=justify><B>Interpretation and Conclusions</B></P>
<P align=justify><B>General Statement </B></P>
<P align=justify>Endeavour Silver&#146;s Guanacev&#237; Mines project has an extensive
mining history and well known silver and gold bearing vein systems. The ongoing
exploration programs have continued to demonstrate the potential for the
discovery of additional resources and reserves as development and exploration at
the mine continue. </P>
<P align=justify>In addition, since taking over the day-to-day operation of the
mine, Endeavour Silver has continued to implement measures in a number of areas
which have culminated in increased productivity and efficiency, leading to cost
savings. Further improvements in implementing low cost mining techniques should
allow mining to be expanded beyond the boundaries of previously mined areas and
extend into new areas. </P>
<P align=center>24 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_28></A>
<P align=justify><B>The Audit Process </B></P>
<P align=justify>Micon&#146;s audit of the reserves/resources for Endeavour Silver
was carried out in two stages: (a) verification of data and associated in-house
protocols and (b) analysis of data, its manipulation and results. </P>
<P align=justify>For verification of data and in-house protocols, Micon relied
on the evidence gathered from the site visits, during which first-hand
information was gathered on reserve/resource blocks, QA/QC protocols, level of
geological/mineralization understanding, visual confirmation of mineralization
in drill cores and underground exposures and resource/reserve database
construction. With respect to the reserve/resource tonnages and grades, Micon&#146;s
audit focused on drilling/sampling density, choice and suitability of estimation
methodology, reasonableness of estimates including accuracy of
calculations/computations.</P>
<P align=justify><B>Reserve/Resource Audits </B></P>
<P align=justify>Following its review, Micon is satisfied that the
geology/exploration teams at Guanacev&#237; have acquired a good understanding of the
geology and mineralization controls which have an important bearing on resource
estimates and future exploration programs. Thus, the resource estimation process
(in particular for new reserve/resource blocks) is well supported by a good
geological/mineralization model. The acquisition of the Ballmark Core
Orientation System has enhanced the abilities of Endeavour&#146;s Silver&#146;s
exploration division in determining the geometry of the manto type deposits at
Buena F&#233; and other structurally complex targets.</P>
<P align=justify>Endeavour Silver<B> </B>has a robust QA/QC system which is
enhanced by the Century Systems Technology data management software. Based on
its verification process, Micon is satisfied that the database used in the
reserve/resource estimate is credible.</P>
<P align=justify>Micon has conducted an audit of the Endeavour Silver resource
and reserve estimates for the period ending December 31, 2010 and considers
these estimates to have been reasonably prepared and to conform to the current
CIM standards and definitions for estimating resources and reserves as required
under NI 43-101 regulations. Micon also considers that all the estimation
techniques used by Endeavour Silver are appropriate and commensurate with the
data levels. Accordingly, Micon accepts Endeavour Silver&#146;s resource and reserve
estimates as an appropriate basis for the ongoing mining operations at the
Guanacev&#237; Mines project. In Micon&#146;s opinion, there are no significant technical,
legal, environmental or political considerations which would affect the
extraction and processing of the resources and reserves at the Guanacev&#237; Mines
project. </P>
<P align=justify><B>Future Potential </B></P>
<P align=justify>Micon believes that the land controlled by Endeavour Silver
continues to be highly prospective both along strike and down dip of the
existing mineralization and that further resources could be converted into
reserves with additional exploration and development. </P>
<P align=justify>Endeavour Silver is in the position of being able to apply
modern exploration concepts and technology to one of the major historical mining
districts in Mexico which previously had experienced only limited exploration.
Therefore, Micon believes that the property continues to hold the potential for
the discovery of deposits of similar character and grade as those currently
being exploited or mined in the past, either along the trend of the vein or at
depth below the presently exploited areas. </P>
<P align=justify>In the case of the Guanacev&#237; Mines project, although a number
of mineralized areas have been exploited in the past, improvements in mining
techniques have allowed mining to be expanded within the boundaries of
previously mined areas and extended into new areas. </P>
<P align=center>25 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_29></A>
<P align=justify>Micon is satisfied that Endeavour Silver&#146;s exploration and
development objectives for the year ended December 31, 2010 have been met, as
evidenced by the discovery of the Epsilon-Soto and La Blanca-Mi Nina deposits
and a significant increase in resources/reserves in other areas. Micon believes
that the program for further exploration on the Guanacev&#237; Mines project proposed
by Endeavour Silver is both warranted and justified as the potential for the
continuing discovery of additional resources is good. </P>
<P align=justify><B>Recommendations </B></P>
<P align=justify><B>Exploration Programs </B></P>
<P align=justify>Endeavour Silver&#146;s exploration programs are ongoing and
exploration efficiencies appear to be improving progressively as new resources
are being discovered. </P>
<P align=justify>In 2011, Endeavour Silver plans a follow-up exploration program
focused on several of the new discoveries made in the San Pedro sub-district
near Endeavour Silver's mining operation at Guanacev&#237; and testing several new
prospective targets within the district. The primary long-term goal of this
program is to expand reserves and resources and to identify properties for
potential acquisition in the Guanacev&#237; district for future growth. </P>
<P align=justify>The 2011 exploration program is planned to include 10,000 m of
core in 35 surface diamond drill holes to test mantos, stockworks and veins in
the San Pedro area in the Guanacev&#237; district. The manto style mineralization in
the Buena F&#233; area (San Pedro) represents an area with considerable potential and
could be prioritized in the 2011 drilling plans. The estimated cost of diamond
drilling is approximately US $170/m. </P>
<P align=justify>Drilling proposed for the San Pedro area will mainly test high
grade veins and mantos in the Epsilon-Soto vein and Santa Isabel areas.
Mineralized zones are principally comprised of quartz, carbonate and adularia
veins with sphalerite, galena and pyrite, hosted in Tertiary-age volcaniclastic
andesite. </P>
<P align=justify>Given that (1) the known mineralization on the Santa Cruz vein
extends some 4,500 m along strike, (2) the mineralized zones in the Deep Santa
Cruz, Porvenir, Porvenir Dos and Alex Breccia areas are open at depth, and (3)
the down-dip potential of the Deep Santa Cruz, Porvenir, Porvenir Dos and Alex
Breccia areas does not appear to be constrained by the increase in base-metal to
silver and gold ratios, Endeavour Silver could reasonably expect that further
exploration may yield additional mineralized areas which could have a positive
impact on the resources and possibly on the reserves as exploration and
development continue at the Guanacev&#237; Mines project. Micon believes that the
program for further exploration on the Guanacev&#237; Mines project proposed by
Endeavour Silver is both warranted and justified as the potential for the
continuing discovery of additional resources is good. </P>
<P align=justify>The proposed exploration program will focus on expanding the
highest priority discovery areas in order to prepare them for an updated
reserve/resource report at year-end 2011. </P>
<P align=justify>Table 1.5 summarizes the planned 2011 exploration budget for
the Guanacev&#237; Mines project. </P>
<P align=justify><B>Table 1.5 <BR></B><B>Guanacev&#237; Exploration Priority Targets
&#150; 2011 </B></P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="80%">

  <TR vAlign=top>
    <TD bgColor=#eeeeee rowSpan=2 align=center><B>Project Area</B> <BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="39%"
    colSpan=3 align=center><B>2011 Program</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee rowSpan=2
    width="13%" align=center><B>Budget</B> <BR><B>US $</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="13%"
    align=center><B>Holes</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="13%"
    align=center><B>Metres</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="13%"
    align=center><B>Samples</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Priority Target Areas </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>San Pedro Surface </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=right>35 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=right>10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=right>4,675 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=right>1,780,700 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Porvenir Mine Surface &amp; Underground </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=right>15 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=right>5,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=right>1,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=right>791,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left><B>Totals</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=right><B>50</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=right><B>15,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=right><B>6,175</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=right><B>2,571,700</B> </TD></TR></TABLE></DIV>
<P style="MARGIN-LEFT: 10%" align=justify>Table provided by Endeavour Silver
Corp. </P>
<P align=center>26 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_30></A>
<P align=justify><B>Further Recommendations </B></P>
<P align=justify>Micon makes the following additional recommendations to assist
Endeavour Silver in its exploration and resource/reserve estimation processes:
</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1) </TD>
    <TD>
      <P align=justify>Micon recommends that future budgets should include
      modern-day technology sampling tools to improve the quality of the
      underground samples used for evaluation.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2) </TD>
    <TD>
      <P align=justify>Micon recommends that Endeavour Silver continues to
      develop an effective reconciliation plan for the Guanacev&#237; Mines project.
      The ability to be able to reconcile the ore mined and milled on a
      stope-by-stope basis to the original estimates for the stope will be a
      critical factor in future resource and reserve estimations. The
      reconciliations will form the basis of reviewing dilution estimates,
      mining loss and gain estimates, and will assist in reviewing the
      classification categories of the resources.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3) </TD>
    <TD>
      <P align=justify>Micon recommends that, as further data are generated from
      mining, more detailed examination of the modelling parameters should be
      undertaken to develop better estimation protocols.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">4) </TD>
    <TD>
      <P align=justify>Micon recommends that the new method of grade
      interpolation applied to Porvenir Dos and Porvenir Cuatro be stabilized by
      relating it to a linear method of estimation.</P></TD></TR></TABLE>
<P align=justify><B><I><U>Guanajuato Mines Project, Guanajuato State,
Mexico</U></I></B><B><I> </I></B></P>
<P align=justify>The following summary of the Guanajuato Mines Project is
extracted from the technical report titled &#147;NI 43-101 Technical Report Audit of
the Resource and Reserve Estimates For the Guanajuato Mines Project Guanajuato
State Mexico&#148; prepared by William J. Lewis, BSc., P.Geo., Charley Murahwi,
M.Sc., P.Geo, MAusIMM, and Robert J. Leader, P. Eng. of Micon International
Limited, and dated March 15, 2011. The complete report can be viewed on SEDAR at
www.sedar.com. The detailed disclosure contained in this technical report is
incorporated by reference into this AIF.</P>
<P align=justify>Endeavour Silver Corp. (Endeavour Silver) has retained Micon
International Limited (Micon) to conduct an audit of the updated resource and
reserve estimates for its Guanajuato Mines project, located near the city of
Guanajuato in the State of Guanajuato, Mexico. This Technical Report constitutes
an audit of the December 31, 2010 mineral resource and reserve estimate
conducted on the property by Endeavour Silver. The audit was performed to ensure
that the resources and reserves comply with the Canadian Institute of Mining,
Metallurgy and Petroleum (CIM) standards and definitions referred to in Canadian
National Instrument 43-101 (NI 43-101). </P>
<P align=justify>The previous December 31, 2009 resource and reserve estimate
was the subject of a March, 2010, NI 43-101 Technical Report prepared by Micon.
The current Micon audit incorporates the exploration data gathered since the
publication of the March, 2010 report. The March, 2010 Technical Report was
electronically posted on the System for Electronic Document Analysis and
Retrieval (SEDAR). SEDAR is the filing system developed for the Canadian
Securities Administrators (CSA). </P>
<P align=justify><B>Property Description </B></P>
<P align=justify>The Guanajuato Mines project consists of three operating mines
in two areas. Mina Cebada is located about 5 km north of the city of Guanajuato.
The Bola&#241;itos mine and the processing plant are situated approximately 5 km west
of Cebada, and both properties are readily accessed by paved and gravel roads.
The Golondrinas mine is 3.5 km to the southwest of Cebada. Endeavour Silver did
not operate the Golondrinas mine during 2009 and 2010. The Bola&#241;itos and
Golondrinas mines are located near the town of La Luz, about 12 km to the
northeast of Guanajuato. </P>
<P align=center>27 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify>The State of Guanajuato is situated within the Central Plateau
of Mexico in the Sierra de Guanajuato at elevations ranging from 2,000 to 2,600
m. From Guanajuato, the properties are accessible via a gravel road, with about
a 15 minute drive to Mina Cebada and a 35 minute drive to the Bola&#241;itos or
Golondrinas mines. The gravel road is heavily eroded by the intense
thunderstorms which occur in the area and it receives sporadic maintenance by a
grader. The road is highly washboarded which keeps driving speeds to generally
less than 50 km/h. </P>
<P align=justify>Most of the supplies and labour required for the exploration
programs and mining operations are purchased in either the city of Guanajuato or
Leon. The area has a rich tradition of mining and there is an ample supply of
skilled personnel sufficient for both the underground mining operations and the
surface facilities. Power supply to the Guanajuato Mines project is provided by
the national grid (Comisi&#243;n Federal de Electricidad). </P>
<P align=justify><B>Ownership </B></P>
<P align=justify>Endeavour Silver advises that it holds the Guanajuato Mines
project through its 100% owned Mexican subsidiary Mina Bola&#241;itos S.A. de C.V.
</P>
<P align=justify>In 2007, Endeavour Silver acquired the Guanajuato Mines project
from Industrias Pe&#241;oles S.A. de C.V. (Pe&#241;oles), the owner at the time, and Minas
de la Luz, S.A. de C.V. (Minas de la Luz), the operator at the time. The
acquisition included the Mina Cebada, Mina Bola&#241;itos, Mina Golondrinas and Mina
Asuncion (as well as a few other currently closed mines). Minas de la Luz
continued as the operator of the mines until June, 2007, when Endeavour Silver
assumed control. The Mina Asuncion is very close to the Mina Bola&#241;itos and has
recently been connected underground. </P>
<P align=justify>The Guanajuato Mines project consists of 17 properties which
are not all contiguous and vary in size for a total of 2,314 hectares (ha). The
project includes three operating silver (gold) mines (Bola&#241;itos, Lucero and
Cebada), several past-producing silver (gold) mines, and the 600 t/d Bola&#241;itos
processing plant. </P>
<P align=justify>The exploitation lease was held by Minas de la Luz and
purchased by Endeavour Silver in conjunction with the asset purchase from
Pe&#241;oles. Endeavour Silver previously reported that some licensing issues were
inherited with the properties. These have now been resolved and the transfer of
the water license and the explosive permit to Endeavour Silver&#146;s Mina Bola&#241;itos
S.A. de C.V. has been completed as well. </P>
<P align=justify>The annual 2011 concession tax payment for the Guanajuato Mines
property is approximately 524,504 Mexican pesos (pesos), which is equal to about
US $43,347 at an exchange rate of 12.10 pesos to US $1.00 dollar. All
concessions are subject to a bi-annual fee (i.e., twice per year) and the filing
of reports in May of each year covering the work accomplished on the property
between January and December of the preceding year. It should be noted that as
of December 21, 2005 (by means of an amendment made on April 28, 2005 to the
Mexican mining law), there is only one type of mineral concession in Mexico.
</P>
<P align=justify>In addition to the mineral rights, Endeavour Silver has
agreements with various private ranch owners and a local ejido (Mesa Cuata) that
provide surface access for exploration and exploitation purposes. The current
cost of maintaining the surface access rights is 399,000 pesos per annum which
is equivalent to approximately US $32,975. </P>
<P align=justify><B>History </B></P>
<P align=justify>The Guanajuato mining district is located at the southern end
of what used to be the Chichimeca Empire which was colonized by Nu&#241;o de Guzm&#225;n
in 1540. </P>
<P align=justify>It is not known if the indigenous peoples or the Spanish
colonists first began mining in the Guanajuato district but mining extends back
to at least 1548 when the silver veins began to be exploited by the Spanish.
Guanajuato was one of the premier mining districts of Nueva Espa&#241;a (New Spain).
</P>
<P align=center>28 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify>Although the Spanish began mining as early as 1548 and worked
the mines until 1700, it was not until after the latter date that they commenced
to work them strongly, continuing to do so until 1810 with the start of the War
of Independence. </P>
<P align=justify>During the war many of the mines were abandoned and either
filled with water or caved in, and so they remained until 1824. In 1824 a number
of English capitalists took the rehabilitation of the principal mines in hand
and worked them for approximately 10 years. However, during this period they
sustained great losses that were principally due to the lack of railroads which
necessitated the transportation of all heavy machinery to the mines on the backs
of mules. In some cases, it took a couple of years to transport the equipment
from England to the mines in Mexico. </P>
<P align=justify>Mining in Mexico became more prevalent again from the 1880s
until the early 1900s when many of the mining districts were in decline due to
low prices. The Civil War in 1910 for the most part paralyzed mining in Mexico
and in many districts it did not recover until late in the 20<SUP>th</SUP>
century. </P>
<P align=justify>It is impossible to state with even approximate accuracy what
the production of precious metals was in the early days. When the Spanish
arrived in Mexico there were no Aztec records and, although accurate records
were kept up until 1810, smuggling prevailed to such an extent, owing to the
heavy tax on silver, as to render it impossible to arrive at exact figures.
However, mining of the silver-gold veins has occurred for more than 450 years
and is estimated to have produced more than 130 tonnes of gold and 30,000 tonnes
of silver. </P>
<P align=justify>In 1906, Percy Martin noted in his book on the mines of
Guanajuato that the principal or &#147;mother vein has yielded the sum of one billion
dollars as proven by the mint and government records. The Valenciana mine proved
to be the greatest silver producer, with workings down to 2,400 feet on the
incline and producing over $300 million dollars of silver or approximately 60
million British pounds&#148;. </P>
<P align=justify><B>Geology and Mineralization </B></P>
<P align=justify>The mining district of Guanajuato is located on the southern
and eastern flanks of the Sierra Madre Occidental geological province, a
north-northwesterly trending linear volcanic belt of Tertiary age. It is
approximately 1,200 km long and 200 to 300 km in width. The project area is
located in the southern portion of the Sierra de Guanajuato, an anticlinal
structure about 100 km long and 20 km wide. The Guanajuato district is located
on the northeast side of this structure where the typical primary bedding
textures dip 10&#176; to 20&#176; to the north-northeast. </P>
<P align=justify>The stratigraphy of the Guanajuato mining district can be
divided into a Mesozoic basement and overlying Cenozoic units. The lower
Mesozoic lithological units are the Esperanza and La Luz Formations which are
composed of rocks of marine origin, weakly to moderately metamorphosed and
intensely deformed by shortening. These rocks are unconformably overlain by the
Tertiary Conglomerado Rojo de Guanajuato, and the Loseros, Bufa, Calderones,
Cedros and Chich&#237;ndaro Formations. The Tertiary rocks consist of continental
sediments and sedimentary rocks, which generally occupy lower topographical
zones, and subaerial volcanic rocks, which are principally exposed in the ranges
and higher plateaus. The rocks of the Cenozoic cover have experienced only
extensional deformation and in some places are gently tilted. Tertiary-aged
rocks correspond to a period of tectonism accompanied by volcanism and intrusive
magmatic activity. </P>
<P align=justify>Randall et al (1994) originally proposed a caldera structure
for the Guanajuato mining district, siting the presence of a megabreccia in the
Calderones Formation and the distribution of the Oligocene volcanic formations described above. The hypothesis
states that the caldera collapse occurred in at least two stages and the
collapse was a trap-door type. The presence of a peripheral three-quarter ring
of rhyolite domes intruding along bounding faults, the location of the Oligocene
volcanic formations ponded within this ring, megabreccia and topographic rim,
all contribute evidence to support this hypothesis. </P>
<P align=center>29 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify>Subsequent normal faulting combined with hydrothermal activity
around 27 Ma resulted in many of the silver-gold deposits found in the district.
There are four principal orientations of normal faults: northwest, north-south,
east-west and northeast but the economic mineralization is generally related to
the north and northwesterly trending structures. Within the Guanajuato mining
district there are three major mineralized fault systems, the La Luz, Sierra and
the Veta Madre systems. Veta Madre is a north-northwest trending fault system
and the largest at 25 km long. </P>
<P align=justify>Most of the production has been extracted from three principal
vein systems on normal faults, the La Luz, Veta Madre and La Sierra. Economic
concentrations of precious metals are present in isolated packets (known as
bonanzas, or &#147;spikes&#148;) distributed vertically and laterally between
non-mineralized segments of the veins. There is a vertical mineralogical
zonation within these veins. The upper-levels are acanthite + adularia + pyrite
+ electrum + calcite + quartz and the lower-levels are chalcopyrite + galena +
sphalerite + adularia + quartz + acanthite. The Veta Madre has been the most
productive vein and it is by far the most continuous, having been traced on the
surface for approximately 20 km. The vein dips from 35&#176; to 55&#186; to the southwest
and it has measured displacements of around 1,200 m near the Las Torres mine and
1,700 m near La Valenciana mine. Most of the other productive veins in the
district strike parallel to the Veta Madre. </P>
<P align=justify>In addition to the epithermal veins near Guanajuato, small
deposits of stratabound massive sulphides have been reported in the Mesozoic
volcano-sedimentary association (Los Mexicanos). Similarly, there is gold
mineralization in the Comanja granite, and in its contact aureole small tungsten
deposits have been found. In the Tertiary volcanic rocks, principally in the
topaz rhyolites, there are small tin prospects. </P>
<P align=justify><B>Exploration </B></P>
<P align=justify>In 2010 Endeavour Silver spent US $2,694,577 (excluding
property holding costs) on exploration activities on the Guanajuato Mines
project. The bulk of this amount was devoted to diamond drilling involving 67
surface holes totalling 21,201 m in the Bola&#241;itos and Cebada areas, plus the
associated sampling, as shown in Table 1.1. </P>
<P align=justify><B>Table 1.1 <BR></B><B>Guanajuato Mines Project Surface
Exploration Drilling Activities in 2010 </B></P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee
      align=center><B>Project Area</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="25%"
    align=center><B>Number of Holes</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="25%"
    align=center><B>Total Metres</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="25%"
    align=center><B>Number of Samples Taken</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Bola&#241;itos (core)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="25%" align=center>61
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="25%"
      align=center>17,970.10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="25%"
      align=center>4,866 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=center>Cebada </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="25%"
    align=center>6 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="25%"
    align=center>3,230.65 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="25%"
    align=center>700 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>Total</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="25%"
      align=center><B>67</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="25%"
      align=center><B>21,200.75</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="25%"
      align=center><B>5,566</B> </TD></TR></TABLE></DIV>
<P style="MARGIN-LEFT: 10%" align=justify>Table provided by Endeavour Silver
Corp. </P>
<P align=center>30 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify>Other 2010 exploration activities included surface mapping,
rock and soil geochemical sampling. The areas mapped and sampled are the
Bola&#241;itos North area and the Bel&#233;n properties which are off the main trends of
the Veta Madre and La Luz vein systems. Rock chip samples on the Bola&#241;itos vein
returned significant assays of up to 103 g/t Ag and 4.25 g/t Au. Rock chip
samples on the Bel&#233;n property returned significant assays of up to 153 g/t Ag
and 1.67 g/t Au. Evidently, new targets for diamond drilling were generated.</P>
<P align=justify>The 2011 exploration program is planned to include 20,920 m of
core in more than 60 surface and underground diamond drill holes to target vein
discoveries and new prospective areas in the Bola&#241;itos, La Luz and Cebada areas
of the Guanajuato district. Endeavour Silver is budgeting to spend US
$3,316,400, mainly on surface diamond drilling, in an effort to continue to
expand the resource base through both exploration and development on its
properties during 2011. The estimated cost of diamond drilling is US $160/m. The
underground program will focus on expanding the resources and reserves at the
Cebada mine, as well as continuing to explore for new sources of mineralization
within the property. </P>
<P align=justify>Table 1.2 summarizes the planned 2011 surface and underground
exploration budgets for the Guanajuato Mines project. </P>
<P align=justify><B>Table 1.2 <BR></B><B>Summary of the Total 2011 Expenditures
for the Guanajuato Mines Project Exploration Programs </B></P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee rowSpan=2
    align=center><BR><B>Project Area</B> <BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="39%"
    colSpan=3 align=center>&nbsp; &nbsp; &nbsp; &nbsp;<B>2011 Exploration
      Programs</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee rowSpan=2
    width="13%" align=center><BR><B>Budget (US $)</B> <BR></TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="13%"
    align=center><B>Drill Holes</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="13%"
    align=center><B>Metres</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="13%"
    align=center><B>Samples</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Lucero-Karina-La Joya </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>12 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>3,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>1,900 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>633,700 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Bel&#233;n </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>13 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>3,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>1,400 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>619,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Bola&#241;itos North </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>5 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>1,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>1,200 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>296,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff align=left>La
      Luz &#150; Asuncion </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>3,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>1,200 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>523,500 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Soledad </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>5 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>1,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>249,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Golondrinas South </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>5 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>1,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>1,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>315,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Cebada Mine Exploration </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>12 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>6,420 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>1,200 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center>680,200 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left><B>Total</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center><B>62</B> </TD>
    <TD bgColor=#ffffff width="13%" align=center><B>20,920</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center><B>8,900</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="13%"
    align=center><B>3,316,400</B> </TD></TR></TABLE></DIV>
<P style="MARGIN-LEFT: 10%" align=justify>Table provided by Endeavour Silver
Corp. </P>
<P align=justify><B>Resource and reserve estimation </B></P>
<P align=justify>Prior to this report, three previous resource and reserve
estimates for the Guanajuato Mines project were reported by Endeavour Silver.
All of these previous mineral resource and reserve estimates were contained in
Technical Reports filed on the System for Electronic Document Analysis and
Retrieval (SEDAR). </P>
<P align=justify>The first Technical Report was issued by SRK Consulting (SRK).
This Technical Report was entitled &#147;NI 43-101 Technical Report for the
Guanajuato Mines Project, Guanajuato State, Mexico&#148; and dated March, 2008. </P>
<P align=justify>The second and third Technical Reports were issued by Micon.
The reports were entitled &#147;NI 43-101 Technical Report, Audit of the Resource and
Reserve Estimate for the Guanajuato Mines Project, Guanajuato State, Mexico&#148;
dated March 18, 2009 and March 15, 2010. </P>
<P align=justify>The December 31, 2010 mineral resource estimates from Endeavour
Silver&#146;s Exploration Division, discussed in this present report, used the
following parameters: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>Cut-off grade for indicated and inferred resources is 100 g/t silver
  equivalent. </LI></UL>
<P align=center>31 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<UL style="TEXT-ALIGN: justify">
  <LI>Silver equivalents in the resource tables were estimated using a 50:1
  ratio based on prices of US $24/oz silver and US $1,200/oz gold with no base
  metal credits. </LI></UL>
<P align=justify>The December 31, 2010 mineral reserve estimates from Endeavour
Silver&#146;s Operations Division (i.e. mines) used the following parameters: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>Cut-off grade for proven and probable reserves is 102 g/t silver. </P>
  <LI>
  <P>Silver equivalents in the reserve tables were estimated using a 62:1 ratio
  based on 3 year trailing average prices of gold and silver. No base metal
  credits were used. </P></LI></UL>
<P align=justify>The mineral resources are exclusive of the mineral reserves.
The summary of the resource and reserve estimates, as contained in Tables 1.3,
1.4 and 1.5, is effective December 31, 2010. </P>
<P align=justify><B>Table 1.3 <BR></B><B>December 31, 2010, Proven and Probable
Mineral Reserve Estimate, Guanajuato Mines Project </B></P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="100%">

  <TR vAlign=top>
    <TD bgColor=#eeeeee align=center><BR><BR><B>Reserve Category</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><BR><BR><B>Tonnes</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Silver</B> <BR><B>(g/t)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Gold</B> <BR><B>(g/t)</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Silver</B>
      <BR><B>Equivalent</B> <BR><B>(g/t)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Silver</B> <BR><B>(oz)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Gold</B> <BR><B>(oz)</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Silver</B>
      <BR><B>Equivalent</B> <BR><B>(oz)</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Proven </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right>141,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right>189
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right>2.50
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right>344
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right>&nbsp;856,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right>11,300 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right>1,557,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Probable </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>100,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>158 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>2.20 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>295 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>&nbsp;508,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>&nbsp;7,100 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>946,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Total Proven
      &amp; Probable</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>241,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>176</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>2.37</B> </TD>
    <TD width="11%" align=right><B>324</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>1,364,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>18,400</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>2,503,000</B> </TD></TR></TABLE></DIV>
<P align=justify><B>Table 1.4 <BR></B><B>December 31, 2010, Indicated Mineral
Resource Estimate, Guanajuato Mines Project </B></P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="100%">

  <TR vAlign=top>
    <TD bgColor=#eeeeee align=center><BR><BR><B>Resource Category</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><BR><BR><B>Tonnes</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Silver</B> <BR><B>(g/t)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Gold</B> <BR><B>(g/t)</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Silver</B>
      <BR><B>Equivalent</B> <BR><B>(g/t)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Silver</B> <BR><B>(oz)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Gold</B> <BR><B>(oz)</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Silver</B>
      <BR><B>Equivalent</B> <BR><B>(oz)</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Measured </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>---</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>---</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>---</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>---</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>---</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>---</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>---</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Indicated </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>1,443,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>163 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>2.18 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>283 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>7,554,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>101,100 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>13,138,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Total Measured
      and Indicated</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>1,443,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right>&nbsp;<B>163</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>2.18</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>283</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>7,554,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>101,100</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>13,138,000</B> </TD></TR></TABLE></DIV>
<P align=justify><B>Table 1.5 <BR></B><B>December 31, 2010, Inferred Mineral
Resource Estimate, Guanajuato Mines Project </B></P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="100%">

  <TR vAlign=top>
    <TD bgColor=#eeeeee align=center><BR><BR><B>Resource Category</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><BR><BR><B>Tonnes</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Silver</B> <BR><B>(g/t)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Gold</B> <BR><B>(g/t)</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Silver</B>
      <BR><B>Equivalent</B> <BR><B>(g/t)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Silver</B> <BR><B>(oz)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><BR><B>Gold</B> <BR><B>(oz)</B> </TD>
    <TD bgColor=#eeeeee width="11%" align=center><B>Silver</B>
      <BR><B>Equivalent</B> <BR><B>(oz)</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Inferred </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>1,475,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>155 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>2.11 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>270 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>7,345,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>100,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right>12,787,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left><B>Total Inferred</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>1,475,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>155</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>2.11</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>270</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>7,345,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>100,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=right><B>12,787,000</B> </TD></TR></TABLE></DIV>
<P align=justify>The process of mineral resource and reserve estimation includes
technical information which requires subsequent calculations or estimates to
derive sub-totals, totals and weighted averages. Such calculations or
estimations inherently involve a degree of rounding and consequently introduce a
margin of error. Where these occur, Micon does not consider them to be material.
The final reserve and resource figures in Tables 1.1 through 1.3 have been
rounded, in part, to provide a mineral resource and reserve statement which
implies an appropriate level of accuracy, in order to reflect that the numbers
are estimates. </P>
<P align=justify>Micon has conducted an audit of the Endeavour Silver resource
and reserve estimates for the period ending December 31, 2010 and considers
these estimates to have been reasonably prepared and to conform to the current CIM standards and definitions for
estimating reserves and resources as required under NI 43-101 regulations.
Accordingly, Micon accepts Endeavour Silver&#146;s resource and reserve estimate as
an appropriate basis for the ongoing mining operations at the Guanajuato Mines
project. In Micon&#146;s opinion, there are no significant technical, legal,
environmental or political considerations which would affect the extraction and
processing of the resources and reserves at the Guanajuato Mines project. </P>
<P align=center>32 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_36></A>
<P align=justify>Micon believes that the land controlled by Endeavour Silver is
highly prospective both along strike and down dip of the known mineralization
and that further resources could be converted into reserves with additional
exploration and development. According to historical production, the Guanajuato
mining district has the potential to be a significant silver producing district
in Mexico once again. </P>
<P align=justify><B>Development and Operations </B></P>
<P align=justify>In 2006, before Endeavour Silver took control, the previous
operator Minas de la Luz produced 255,766 oz silver and 3,349 oz gold from
76,532 tonnes of ore grading 128 g/t silver and 1.62 g/t gold from the
Bola&#241;itos, Cebada and Golondrinas mines. The Bola&#241;itos plant operated at about
43% of its capacity. Endeavour Silver has made a number of improvements and
efficiencies which have increased the throughput of the plant. </P>
<P align=justify>In 2010, the Bola&#241;itos plant produced 943,423 oz silver and
12,914 oz gold from 194,923 t ore grading 177 g/t silver and 2.40 g/t gold.
Silver and gold recoveries averaged 85.5 and 86.0%, respectively. Recent
production statistics (2006 to 2010) are summarized in Table 1.6. </P>
<P align=justify><B>Table 1.6 <BR></B><B>Production Statistics for the
Guanajuato Mines Project </B></P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="90%">

  <TR vAlign=top>
    <TD bgColor=#eeeeee rowSpan=2 align=center><B>Operator</B> <BR></TD>
    <TD bgColor=#eeeeee rowSpan=2 width="11%" align=center><B>Year</B> <BR></TD>
    <TD bgColor=#eeeeee rowSpan=2 width="11%" align=center><B>Tonnes</B>
    <BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="22%"
    colSpan=2 align=center>&nbsp; &nbsp;<B>Grade (g/t)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="22%"
    colSpan=2 align=center><B>Production (ounces)</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><B>Gold</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><B>Silver</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><B>Gold</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="11%"
    align=center><B>Silver</B> </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff rowSpan=2 align=center>Minas de la Luz <BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>2006 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>76,532 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>1.62 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>128 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>3,349 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>255,766 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>2007 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>------ </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>---- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>---- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>----- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>------ </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff rowSpan=4 align=center><BR>Endeavour Silver
<BR><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>2007 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>58,077 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>1.50 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>136 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>2,152 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>195,696 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>100,312 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>1.35 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>170 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>3,660 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>465,867 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>154,196 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>2.13 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>188 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>8,775 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>784,974 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>194,923 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>2.40 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>177 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>12,914 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center>943,423 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=center><B>Total</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center><B>584,040</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center><B>1.64</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center><B>141</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center><B>30,850</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="11%"
    align=center><B>2,645,726</B> </TD></TR></TABLE></DIV>
<P style="MARGIN-LEFT: 5%" align=justify>Table provided by Endeavour Silver
Corp. </P>
<P align=justify>Endeavour Silver is continuing to seek additional improvements
and expand the mineral resources at its operations at the Guanajuato Mines
project. </P>
<P align=justify>The Guanajuato Mines project produces a concentrate which it
ships to Endeavour Silver&#146;s Guanacev&#237; Mines project in Durango for refining into
dor&#233; silver-gold bars. </P>
<P align=justify><B>Conclusions and Recommendations </B></P>
<P align=justify>Micon has reviewed Endeavour Silver&#146;s proposal for further
exploration on its Guanajuato Mines property and recommends that Endeavour
Silver conducts the exploration program as proposed, subject to funding and any
other matters which may cause the proposed exploration program to be altered in
the normal course of its business activities or alterations which may affect the
program as a result of exploration activities themselves. </P>
<P align=center>33 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_37></A>
<P align=justify>Through its acquisition of the Guanajuato Mines project,
Endeavour Silver has acquired an operating project in one of the major silver
producing districts in Mexico. Micon has reviewed Endeavour Silver&#146;s proposal
for further exploration and has conducted its third audit of the resource and
reserve estimates for the project. Micon has accepted the estimates as appropriate.
Micon makes the following additional recommendations to assist Endeavour Silver
in its exploration and resource and reserve estimation processes: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1) </TD>
    <TD>
      <P align=justify>Micon recommends that Endeavour Silver continues to
      develop a reconciliation plan for the Guanajuato Mines project. The
      ability to be able to reconcile the ore mined and milled on a
      stope-by-stope basis to the original estimates for the stope will be a
      critical factor in future resource and reserve estimations. The
      reconciliations will form the basis for reviewing dilution estimates,
      mining loss and gain estimates, and will assist in reviewing the
      classification categories of the resources.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2) </TD>
    <TD>
      <P align=justify>Micon recommends that Endeavour Silver continues to have
      its on-site laboratory participate in a proficiency program of round-robin
      laboratory testing such as the one run by CanMet. This will continue to
      assist the on-site laboratory in assessing its performance for one or more
      analytical methods independently of internal quality control. Coupled with
      this program, a total of between 5% and 10% of the samples submitted to
      the on-site assay laboratory should continue to be sent out to a secondary
      accredited laboratory.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3) </TD>
    <TD>
      <P align=justify>Micon recommends that the computerization programs
      planned for Guanajuato should be speeded up to achieve better efficiency
      and enable Endeavour Silver to standardize practices at all of its
      operations.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">4) </TD>
    <TD>
      <P align=justify>Micon recommends that Endeavour Silver continues sending
      out representative samples of the various mineralized zones encountered in
      the drilling for bulk density determinations and that this information is
      used in conducting future resource and reserve estimates on the Guanajuato
      Mines project. At the same time representative samples of the mineralized
      material from the various zones could be sent out for metallurgical and
      mineralogical testwork.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">5) </TD>
    <TD>
      <P align=justify>Micon recommends that Endeavour Silver completes its
      conversion of the existing paper database. As further data are generated
      from the mining, more detailed examination of the block modelling
      parameters should be done to develop better estimation protocols. This
      would help in both future exploration and in infill drilling.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">6) </TD>
    <TD>
      <P align=justify>Micon recommends that future budgets for the operations
      should include modern-day technology sampling tools to improve the quality
      of the samples used for evaluation and thereby achieve a more accurate
      base for reconciliation with the mill output.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">7) </TD>
    <TD>
      <P align=justify>Micon recommends that Endeavour Silver continues to
      nurture its talented Exploration Division and to equip it with a broader
      range of skills to ensure growth through the continuous generation of
      resources.</P></TD></TR></TABLE>
<P align=justify>Given the amount of historical mining conducted on the
Guanajuato Mines project, the extent of the remaining mineralization within the
known mining areas, and the lack of a modern comprehensive exploration program
covering the entire property in the past, the property has the potential to host
further zones of silver and gold mineralization, similar in character and grade
to those exploited in the past, outside the present resource and reserve base.
</P>
<P align=justify><B><I><U>Parral Project (El Cometa Property), Chihuahua State,
Mexico</U></I></B><B><I> </I></B></P>
<P align=justify>The following summary of the Parral Project is extracted from
the technical report titled &#147;NI 43-101 Technical Report Audit of the Mineral
Resource Estimate for the Parral Project (El Cometa Property), Chihuahua State,
Mexico&#148; prepared by William J. Lewis, BSc., P.Geo., Charley Z. Murahwi, M.Sc.,
P.Geo, MAusIMM and Dibya Kanti Mukhopadhyay, M.Sc, MAusIMM, of Micon
International Limited, and dated December 15, 2010 (the &#147;Parral Project
Report&#148;). The complete report can be viewed on SEDAR at www.sedar.com. The detailed disclosure contained in
this technical report is incorporated by reference into this AIF.</P>
<P align=center>34 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify>Micon International Limited (Micon) has been retained to
provide an independent audit of the October, 2010, mineral resource estimate for
the Parral Project located in the State of Chihuahua, Mexico and owned by
Endeavour Silver Corp. (Endeavour Silver). This Technical Report is an update of
the Micon&#146;s previous Technical Report dated March 15, 2010, which constituted an
audit of Endeavour Silver&#146;s December 31, 2008, in-house mineral resource
estimate conducted on the El Cometa property. The March, 2010, Technical Report
was posted on the System for Electronic Document Analysis and Retrieval (SEDAR).
</P>
<P align=justify>The Parral Project Report constitutes an audit of the October
27, 2010, mineral resource estimate conducted on the Parral Project by Endeavour
Silver. Endeavour Silver&#146;s mineral resource estimate is an in-house estimate
based on further exploration conducted in 2009 and 2010. Micon&#146;s audit was
performed to ensure that the resource estimate complied with the Canadian
Institute of Mining, Metallurgy and Petroleum (CIM) standards and definitions,
as required by Canadian National Instrument 43-101 (NI 43-101). </P>
<P align=justify>The term &#147;El Cometa property&#148; refers to the El Cometa
concession and &#147;San Juanico property&#148; refers to the Ampliacion de San Juanico,
Dolores and El Jazmin concessions. These are the concessions on which Endeavour
Silver conducted its exploration programs and resource estimates in 2007/2008
and 2010, respectively. The term &#147;Parral Project&#148; refers to the entire land
package acquired or held by Endeavour Silver in the Parral area. </P>
<P align=justify>The Parral Project Report includes technical information which
requires subsequent calculations or estimates to derive sub-totals, totals and
weighted averages. Such calculations or estimations inherently involve a degree
of rounding and consequently introduce a margin of error. Where these occur,
Micon does not consider them to be material. </P>
<P align=justify><B>Property Description </B></P>
<P align=justify>The El Cometa property consists of one roughly 19.6 hectare
(ha) mineral concession and the San Juanico property consists of three mineral
concessions totaling 17.1 hectares. The mineral concessions are bisected by a
southwest trending highway that serves as access for the small mining city of
Santa Barbara, about 20 km distant. The southern and eastern portions of the El
Cometa property are beneath a residential district and surface access is
restricted in those areas. The northern half of the Parral Project and the area
to the west underneath which the vein dips are open ground. </P>
<P align=justify>The Parral Project is registered in the municipality of Hidalgo
del Parral (Parral), a city of approximately 100,000 inhabitants in the southern
portion of the State of Chihuahua, Mexico. The Parral Project concessions are
approximately 4 km from the centre of Parral. The site is within the mining
district of Parral, a roughly 10 km by 10 km area north and west of Parral. The
mining district is further subdivided into sub-districts; Endeavour Silver&#146;s
Parral Project is part of the Nueva Minas sub-district, named for a small town
built in 1645 around a thriving silver mining industry exploiting the Veta
Colorada. </P>
<P align=justify><B>Ownership </B></P>
<P align=justify>Endeavour Silver acquired the El Cometa property in 2006 and it
is part of the Parral exploration project. Endeavour Silver carried out three
phases of surface exploration drilling from 2006 through 2008 on the Cometa
property. </P>
<P align=justify>The El Cometa concession was held under a mining option
agreement (Contrato de Explotacion y Opcion Minera) by Minera Plata Adelante,
S.A. de C.V. (Minera Plata), a wholly-owned subsidiary of Endeavour Silver. The
option agreement was signed on August 7, 2006. In August, 2009, Minera Plata
exercised its purchase option by making the final option payment. Minera
Plata currently holds a 100% undivided interest in the El Cometa concession.</P>
<P align=center>35 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify>On August 14, 2009, Endeavour Silver acquired an option to
purchase the San Juanico property, located adjacent to the El Cometa concession.
</P>
<P align=justify>The San Juanico mine property includes the Ampliacion de San
Juanico, Dolores and El Jazmin concessions and covers an area of 17.1157 ha.
These concessions straddle approximately 800 m of the mineralized San
Juanico-Cometa vein structure to the north of and adjoining the El Cometa
property. </P>
<P align=justify>Endeavour Silver can acquire a 100% interest in the San Juanico
property by paying a total of US $130,000 in four installments over 18 months
and a final payment 24 months after signing the option agreement. The final
payment amount ranges from a minimum of US $300,000 to a maximum of US $1.9
million and is dependent upon the silver equivalent metal content of a NI 43-101
compliant mineral reserve and mineral resource estimate (excluding inferred
resources). Only gold and silver grades will be used to calculate the silver
equivalent based on the ratio of silver and gold prices. </P>
<P align=justify>Endeavour Silver has also entered into a joint venture
agreement with the current owner of San Juanico to share in the development of
and production from the properties during the 24-month option period. Endeavour
Silver&#146;s subsidiary Minera Plata has advanced the owner US $150,000 as a loan to
rent or purchase mining equipment and supplies sufficient to redevelop the San
Juanico mine back into small scale production. The loan is secured by a first
mortgage on the San Juanico property. The parties shall participate in the
profits and losses resulting from the operations that constitute the joint
venture agreement on a 50:50 basis. </P>
<P align=justify>At present, the Parral Project consists of 4 mineral
concessions. The mineral concessions vary in size and are nearly contiguous,
with a total property area of 36.6693 ha. The annual 2011 concession tax for the
Parral Project properties is estimated to be approximately 5,662 Mexican pesos
(pesos), which is equal to about US $457 at an exchange rate of 12.40 pesos to
US $1.00 dollar. </P>
<P align=justify><B>History </B></P>
<P align=justify>The city of Parral was established in 1600 with the first
records in the archives dating to 1612. The first official register of mines, in
the year 1632, is a volume of 485 pages. </P>
<P align=justify>In 1820, a commission was appointed to report on the condition
of the mining region of Parral. The object of the inquiry was to provide
information to support a project to reopen some of the mines which, two
centuries previously, had produced a large amount of silver. While the plan
failed, a large amount of historical information was obtained. </P>
<P align=justify>The principal mines in the Villa del Parral in 1820 were those
in the hills nearest the villa. It was noted that, although the mines were rich,
they were abandoned when the water table was reached due to the lack of proper
equipment to pump the water and sink the shafts to the required depths. </P>
<P align=justify>Transportation was another problem for the Parral mining
district and, prior to the advent of the railroad, ores were hauled by wagon to
Jimenez and shipped from there to Socorro, New Mexico, El Paso, Texas or Mapimi,
for treatment. In 1880, the Mexican Central line reached the state and in 1898
the Parral branch of the Mexican Central was completed, with branch lines built
to service other mining camps and timber belts. However, with the exception of a
few rich mining camps, the more mountainous districts of Chihuahua were not
revived until the building of the Chihuahua and Pacific Railway, which was
completed to Mi&#241;aca in 1900. </P>
<P align=justify>In 1905 and afterwards a number of smelters were built in the
State of Chihuahua which reduced the high freight rates and smelting charges,
making the mines more economic. </P>
<P align=center>36 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify>Records of the pre-1929 production are sporadic, although it is
estimated that a few hundred million ounces of silver were produced during this
period. </P>
<P align=justify>The district-wide production between 1929 and 1990 is reported
to have been 24 Mt at an average grade of 200 g/t silver. If correct, this
period would have produced approximately 150 million ounces (Moz) of silver.
</P>
<P align=justify>Two large polymetallic mines continue to operate at the south
end of the district, the Santa Barbara mine (6,000 t/d) owned by the Grupo
Mexico and the San Francisco mine (3,000 t/d) owned by the Grupo Frisco. A
number of smaller mines are being exploited in the area surrounding the El
Cometa property. </P>
<P align=justify><B>Geology and Mineralization </B></P>
<P align=justify>The Parral mining district is in the heart of the Mexican
silver belt. The geology of this belt is characterized by two volcanic sequences
of Tertiary age, discordantly overlying deeply eroded Mesozoic sediments and
older metamorphic rocks. The physiography of the belt resembles the basin and
range area in the western United States, with wide, flat valleys and narrow,
relatively low mountain ranges and hills. </P>
<P align=justify>The precious metal-bearing fissure vein type of mineral deposit
is the most widespread and economically important type of deposit found in the
belt. The belt has been recognized as a significant metallogenic province which
has reportedly produced more silver than any other equivalent area in the world.
</P>
<P align=justify>The Parral mining district is underlain by three packages of
rocks, ranging from Cretaceous to Tertiary. The oldest is the Parral Formation,
a deformed series of low-metamorphic grade marine sediments, intruded by
hypabyssal andesites which are overlain by a Tertiary volcanic sequence named
the Escobedo Volcanic group. It is likely that the hypabyssal intrusions are
co-genetic with Escobedo Volcanics. Elsewhere in the Parral district, a quartz
monzonite pluton intrudes the Parral Formation, but this has not been observed
on the El Cometa concession. </P>
<P align=justify><B>Exploration </B></P>
<P align=justify>Drilling commenced at the El Cometa property in December, 2006,
after Endeavour Silver completed a survey of the old mine infrastructure,
buildings and roads on the mineral concession. By the end of 2007, a total of 27
diamond drill holes had been completed for a total of 9,335.83 m. Endeavour
Silver spent US $1,178,494 on exploration activities during the 2006 and 2007
work seasons. </P>
<P align=justify>The mineralization intersected by Endeavour Silver&#146;s 2006 to
2007 drilling program on the El Cometa property is between 120 m and 430 m below
surface over a 400 m strike length. </P>
<P align=justify>In 2008, Endeavour Silver conducted a limited surface diamond
drilling program on the El Cometa property. The purpose of this program was to
tighten up the drill spacing to approximately 40 m centres in a portion of the
El Cometa deposit, to permit preliminary mine planning and economic analysis.
All of these in-fill holes intersected polymetallic mineralization and helped to
further define the El Cometa vein system. Six holes totaling 1,800.20 m were
completed in 2008, bringing the total to 33 holes and 11,136.03 m drilled by
Endeavour Silver on the El Cometa property. </P>
<P align=justify>No exploration drilling was conducted on the property in 2009.
</P>
<P align=justify>The San Juanico drilling program commenced in March, 2010, and
was completed in July, 2010. The objective was to extend the resources on the El
Cometa property onto the San Juanico property. Endeavour Silver believed that,
if the current resources could be doubled, these properties could have
sufficient critical mass to conduct a preliminary economic assessment. The El
Cometa and San Juanico properties have excellent access and infrastructure,
being located on the outskirts of the city of Parral, and less than 2 km from
the government processing plant. </P>
<P align=justify>Endeavour Silver commenced a Phase 1 exploration drilling
  program at San Juanico in the first quarter of 2010. A total of 9,000 m of
  drilling was planned at an estimated cost of US $1,543,500. </P>
<P align=center>37 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify><B>Resource Estimation for the Parral project </B></P>
<P align=justify>The last mineral resource estimate conducted on the property
was Endeavour Silver&#146;s December 31, 2008, estimate which was audited by Micon
with the results disclosed in a March, 2010, Technical Report. Subsequent to the
December, 2008, estimate Endeavour Silver conducted work on the Parral Project
in 2010. As a result of the most recent exploration program, Endeavour Silver
prepared a new mineral resource estimate for the Parral Project. The new mineral
resource estimate has been audited by Micon and has an effective date of October
27, 2010. </P>
<P align=justify>The Parral Project mineralization is polymetallic and, for this
reason, each sampled intersection was assigned a value based on the estimated
net smelter return (NSR). The economic assumptions used to calculate the NSR are
summarized in Table 1.1. Metal prices were based on the budget numbers for gold
and silver that Endeavour used for 2010 and the London lead and zinc prices in
July, 2010. The metallurgical recovery is based on the metallurgical testwork
described in Section 16. Endeavour Silver plans to produce zinc and lead
concentrates for sale to a Mexican smelter, if the property is brought to
production. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>Table 1.1</B> </TD>
    <TD width="90%" align=left><B>Net Smelter Return (NSR) Cut-off Parameters
      for the Parral Project</B> </TD></TR></TABLE><BR>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="60%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee
      align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp;<B>Description</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="50%"
    align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp;<B>Parameter</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Gold Price </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%" align=left>US
      $1,000 per oz </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Silver Price </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="50%"
    align=left>US $16 per oz </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Lead Price </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="50%"
    align=left>US $0.65 per lb </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Zinc Price </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="50%"
    align=left>US $0.65 per lb </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Gold Recovery (Overall) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="50%"
    align=left>75% </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Silver Recovery (Overall) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="50%"
    align=left>71% </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Lead Recovery (Overall) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="50%"
    align=left>80% </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Zinc Recovery (Overall) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="50%"
    align=left>74% </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>Smelter Terms </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="50%"
    align=left>Based on generic contract </TD></TR></TABLE></DIV>
<P align=justify>The cut-off NSR value for reporting mineral resources was based
on a review of operating costs at existing Endeavour Silver operations. The
review indicated that a total operating cost of approximately US $55/t, and a
direct operating cost of approximately US $40/t, can be expected for Endeavour
Silver&#146;s Parral Project. </P>
<P align=justify>The mineral resource estimate for the Parral Project is
summarized in Table 1.2. </P>
<P align=justify><B>Table 1.2 <BR></B><B>Summary of the Parral Project Mineral
Resource Estimate as of October 27, 2010 (NSR Cut-off US $40/t) </B></P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="90%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee
      align=center><B>Resource</B> <BR><B>Category</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="12%"
    align=center><B>Thousand</B> <BR><B>Tonnes</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="12%"
    align=center><B>Ag</B> <BR><B>(g/t)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="12%"
    align=center><B>Au</B> <BR><B>(g/t)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="12%"
    align=center><B>Cu</B> <BR><B>(%)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="12%"
    align=center><B>Pb</B> <BR><B>(%)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="12%"
    align=center><B>Zn</B> <BR><B>(%)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="12%"
    align=center><B>NSR/Tonne</B> <BR><B>($US)</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=center><B>Indicated</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=center><B>1,631.0</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=center><B>49.39</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=center><B>0.90</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=center><B>0.15</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=center><B>2.87</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=center><B>2.86</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=center><B>75.38</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=center><B>Inferred</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=center><B>1,302.9</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=center><B>63.47</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=center><B>0.88</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=center><B>0.20</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=center><B>2.55</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=center><B>2.28</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=center><B>73.77</B> </TD></TR></TABLE></DIV>
<P align=justify>The mineral resource estimate has been reviewed and audited by
Micon. It is Micon&#146;s opinion that the October 27, 2010, mineral resource
estimate has been prepared in accordance with the CIM standards and definitions
for mineral resource estimates and that Endeavour Silver can use the mineral
resource estimate as a basis for further exploration and economic evaluation of
the Parral Project. </P>
<P align=justify>Micon believes that currently no environmental, permitting,
legal, title, taxation, socio-economic, marketing or political issues exist
which would adversely affect the mineral resources estimated above.</P>
<P align=justify>However, mineral resources that are not mineral reserves do not
have demonstrated economic viability. There are currently no mineral reserves on
the Parral Project. </P>
<P align=center>38 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
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<P align=justify><B>Development and Operations </B></P>
<P align=justify>The El Cometa property has been partially exploited from
small-scale underground workings historically, but no surface or underground
sampling information is available and there appears to have been no drilling
conducted on the property prior to Endeavour Silver&#146;s 2006 to 2007 program. </P>
<P align=justify>Two small mine shafts, San Juanico and Dolores, had a history
of small-scale production down to a depth of 100 m and 150 m, respectively, with
the upper mine levels until recently producing approximately 25 t/d of
silver-rich lead-zinc-gold ore for processing at the nearby 500 t/d flotation
plant owned by the Mexican government. </P>
<P align=justify>Prior to drilling in 2010, Endeavour Silver believed that the
resource potential of the San Juanico property was substantial because the
historic and recently producing mineralized veins on the San Juanico property
appear to be simple extensions of the mineralized veins drilled on the adjacent
El Cometa property. As was the case with El Cometa prior to its acquisition by
Endeavour Silver, the mineralized veins at San Juanico had never been explored
by drilling. The best model for the San Juanico-El Cometa mineralized vein
system may be the La Esmeralda mine located only 2 km south of El Cometa along
the same Esmeralda vein system. </P>
<P align=justify><B>Conclusions and Recommendations </B></P>
<P align=justify>Micon has reviewed Endeavour Silver&#146;s initial QA/QC protocols
and generally agrees with them. It should be noted that, during the 2008
drilling program, standards were not immediately available and therefore were
not inserted into the sample stream of the earlier drill holes. It is understood
that Endeavour Silver undertook check analyses of the earlier samples prior to
the current resource estimate. </P>
<P align=justify>Through acquiring the El Cometa and San Juanico properties,
Endeavour Silver is in the position of having acquired properties in a
historical mining district in Mexico that has not been subjected fully to modern
exploration concepts and technology. The properties hold the potential for the
discovery of mineralized deposits of similar character and grade as those
exploited in the district in the past. </P>
<P align=justify>The Parral Project should be considered as a mid-stage
exploration project upon which Endeavour Silver has begun to conduct further
exploration and drilling in order to gain a better understanding of the nature
and extent of the mineralization located on both the El Cometa and San Juanico
properties, as well as on adjacent properties. </P>
<P align=justify>The El Cometa and San Juanico properties have excellent access
and infrastructure, being located on the outskirts of the city of Parral, and
less than 2 km from the government processing plant. However, based on the
results obtained from the 2010 drilling program, Endeavour Silver has decided to
defer any further work on the Parral Project for the time being pending a
further review of the project. Since Endeavour Silver is putting the Parral
Project on hold pending a review, the only money budgeted for 2011 is the
holding cost for the property plus any obligations as per its agreements with
the vendors (Phase 1). However, Endeavour Silver may decide to conduct further
work (Phase 2) comprised of a bulk sample, further metallurgical testing and a
preliminary economic assessment. If Endeavour Silver decides to conduct further
work, it has budgeted approximately US $500,000 to cover the Phase 2 program.
Endeavour Silver&#146;s budget to hold the Parral Project and fulfill any obligations
and to conduct the Phase 2 program if it proceeds, is summarized in Table 1.3.
</P>
<P align=center>39 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>Table 1.3</B> </TD>
    <TD width="90%" align=left><B>Parral Property &#150; Exploration Budget for
      2011</B> </TD></TR></TABLE><BR>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="90%">

  <TR vAlign=top>
    <TD bgColor=#eeeeee align=center><B>Phase</B> <BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="20%"
    align=center><BR><B>Activity Description (units)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="20%"
    align=center><BR><B>Units</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="20%"
    align=center><B>Unit Cost</B> <BR><B>(US $)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#eeeeee width="20%"
    align=center><B>Total Cost</B> <BR><B>(US $)</B> </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff rowSpan=5 align=center><BR>
      <BR><BR>Phase 1
    <BR><BR><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=left>Consultants (days) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=center>5 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=center>&nbsp; &nbsp;1,200 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>6,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=left>Taxes and fees </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>1,000 </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff width="20%" align=left>San Juanico option payment
      <BR>(February, 2011) </TD>
    <TD bgColor=#ffffff width="20%" align=center>1 </TD>
    <TD bgColor=#ffffff width="20%" align=center>30,000 </TD>
    <TD bgColor=#ffffff width="20%" align=right>30,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=left>Miscellaneous expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>3,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=left><B>Total</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right><B>40,000</B> </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff rowSpan=4 align=center><BR>
      Phase 2 <BR><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=left>Bulk sample </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>100,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=left>Metallurgical testing </TD>
    <TD bgColor=#ffffff width="20%" align=right>&nbsp; </TD>
    <TD bgColor=#ffffff width="20%" align=right>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>200,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=left>Preliminary assessment study </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>200,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=left><B>Total</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right><B>500,000</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=center>Phase 1 and Phase 2 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=left><B>Total (Both Phases)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="20%"
    align=right><B>540,000</B> </TD></TR></TABLE></DIV>
<P style="MARGIN-LEFT: 5%" align=justify>Table supplied by Endeavour Silver
Corp. </P>
<P align=justify>Micon recommends that Endeavour Silver conducts its review
(Phase 1) as proposed, prior to determining whether or not to commit additional
funds to exploration of the Parrel Project. </P>
<P align=justify>Micon agrees with the general direction of Endeavour Silver&#146;s
programs for the properties and recommends that desktop studies be conducted
over the greater Parral region in search of opportunities to expand the land
holding and resources. After auditing the geological models and mineral resource
estimates generated by Endeavour Silver, Micon finds the methodology to be
acceptable for use on the Parral Project and makes the following recommendations
for improvements to be applied to future estimates: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1. </TD>
    <TD>
      <P align=justify>Validating the resource estimate by an alternative method
      of estimation will give greater confidence in the resource
  figures.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2. </TD>
    <TD>
      <P align=justify>Detailed geological modeling will result in improved
      variography and a better definition of the mineralization
  domains.</P></TD></TR></TABLE>
<P align=center>40 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>ITEM 5:</B> </TD>
    <TD width="90%" align=left><B>DIVIDENDS</B> </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>5.1</B> </TD>
    <TD width="95%" align=left><B>Dividends</B> </TD></TR></TABLE>
<P align=justify>The Company has not declared any dividends during the past
three fiscal years ended December 31, 2010. The Company has no present intention
of paying dividends on its common shares as it anticipates that all available
funds will be invested to finance further acquisition, exploration and
development of its mineral properties. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>ITEM 6:</B> </TD>
    <TD width="90%" align=left><B>DESCRIPTION OF CAPITAL STRUCTURE</B>
  </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>6.1</B> </TD>
    <TD width="95%" align=left><B>General Description of Capital Structure</B>
    </TD></TR></TABLE>
<P align=justify>The Company&#146;s authorized share capital is comprised of an
unlimited number of common shares without par value. </P>
<P align=justify>The following table provides a summary concerning the Company&#146;s
share capital as of December 31, 2010: </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="90%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%" align=left>&nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp;<B>December 31, 2010</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Authorized
      share capital</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left>Unlimited number of common shares without par value </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Number of shares issued and</B> <B>outstanding</B> </TD>
    <TD width="50%" align=left>80,720,420 common shares without par value
  </TD></TR></TABLE></DIV>
<P align=justify>As at March 15, 2011, the Company has 81,657,937 common shares
issued and outstanding. </P>
<P align=justify>All common shares of the Company rank equally as to dividends,
voting rights and participation in assets and in all other respects. Each share
carries one vote per share at meetings of the shareholders of the Company. There
are no indentures or agreements limiting the payment of dividends and there are
no conversion rights, special liquidation rights, pre-emptive rights or
subscription rights attached to the common shares. The shares presently issued
are not subject to any calls or assessments. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>6.2</B> </TD>
    <TD width="95%" align=left><B>Constraints</B> </TD></TR></TABLE>
<P align=justify>To the best of its knowledge, the Company is not aware of any
constraints imposed on the ownership of its securities to ensure that the
Company has a required level of Canadian ownership. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>6.3</B> </TD>
    <TD width="95%" align=left><B>Ratings</B> </TD></TR></TABLE>
<P align=justify>To the best of its knowledge, the Company is not aware of any
ratings, including provisional ratings, from rating organizations for the
Company&#146;s securities that are outstanding and continue in effect. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>ITEM 7:</B> </TD>
    <TD width="90%" align=left><B>MARKET FOR SECURITIES</B>
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>7.1</B> </TD>
    <TD width="95%" align=left><B>Trading Price and Volume</B>
</TD></TR></TABLE>
<P align=justify>The Company&#146;s common shares are listed for trading on the
Toronto Stock Exchange (the &#147;TSX&#148;) under the symbol &#147;EDR&#148; and since March 14,
2011 on the New York Stock Exchange (&#147;NYSE&#148;) under the symbol &#147;EXK&#148;. Prior to
March 14, 2011, the Company&#146;s common shares were listed on the NYSE Amex. </P>
<P align=justify>The
  price ranges for the Company&#146;s common shares in Canadian dollars and volume
  traded on the TSX for the most recently completed fiscal year ended December 31,
  2010 and the months of January and February 2011 are set out below: </P>
<P align=center>41 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="80%">

  <TR vAlign=top>
    <TD align=center><BR>Date </TD>
    <TD width="16%" align=center><BR>Open </TD>
    <TD width="16%" align=center><BR>High </TD>
    <TD width="16%" align=center><BR>Low </TD>
    <TD width="16%" align=center><BR>Close </TD>
    <TD width="16%" align=center>Volume <BR>Traded </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Feb-11 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>6.30
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>7.49
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>6.22
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>7.14
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>&nbsp;4,790,939 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Jan-11 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>7.18
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>7.19
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>5.40
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>6.19
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>&nbsp;6,159,096 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Dec-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>6.45
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>7.63
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>6.36
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>7.30
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>&nbsp;8,400,732 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Nov-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.95
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>7.14
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.70
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>6.38
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>13,333,133 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Oct-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.16
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>5.10
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.13
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.94
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>&nbsp;3,868,180 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Sep-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.89
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.40
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.77
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.17
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>&nbsp;3,771,294 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Aug-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.38
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.88
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.29
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>6.87
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>&nbsp;1,702,999 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Jul-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.37
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.73
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.20
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.40
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>&nbsp;1,498,128 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Jun-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.71
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.93
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.45
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.63
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>&nbsp;1,987,300 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>May-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.00
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.34
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.35
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.69
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>&nbsp;4,574,999 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Apr-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.30
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.07
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.29
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.97
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>&nbsp;3,184,668 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Mar-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.53
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.90
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.15
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.23
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>&nbsp;3,570,781 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Feb-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.31
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.90
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.05
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.45
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>&nbsp;3,059,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Jan-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.96
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.57
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.32
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.35
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>&nbsp;3,934,300 </TD></TR></TABLE></DIV>
<P align=justify>The price ranges for the Company&#146;s common shares in US$ and
volume traded on the NYSE Amex for the most recently completed fiscal year ended
December 31, 2010 and the months of January and February 2011 are set out below:
</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="80%">

  <TR vAlign=top>
    <TD align=center><BR>Date </TD>
    <TD width="16%" align=center><BR>Open </TD>
    <TD width="16%" align=center><BR>High </TD>
    <TD width="16%" align=center><BR>Low </TD>
    <TD width="16%" align=center><BR>Close </TD>
    <TD width="16%" align=center>Volume <BR>Traded </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Feb-11 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>6.34
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>7.60
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>6.23
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>7.41
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>27,711,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Jan-11 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>7.47
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>7.69
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>5.40
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>6.17
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>31,779,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Dec-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>6.37
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>7.61
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>6.22
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>7.34
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>41,500,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Nov-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.88
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>7.16
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.63
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>6.21
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>42,115,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Oct-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.09
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>5.10
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.09
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.89
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>21,117,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Sep-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.65
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.23
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.63
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.03
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>13,743,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Aug-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.33
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.60
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.16
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.60
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>6,981,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Jul-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.34
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.57
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.09
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.32
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>5,958,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Jun-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.51
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.68
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.29
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.38
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>8,256,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>May-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.93
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.13
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.42
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.57
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>18,492,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Apr-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.25
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.91
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.26
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.91
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>12,084,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Mar-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.28
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.71
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.15
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.21
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>11,149,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Feb-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.23
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.59
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.10
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.28
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>11,266,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Jan-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.89
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.28
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.15
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.15
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>13,136,000 </TD></TR></TABLE></DIV>
<P align=justify>The Company also has 2,941,150 common share purchase warrants
that are listed for trading on the TSX under the symbol &#147;EDR.WT&#148;. These common
share purchase warrants were issued under a prospectus offering completed on
October 7, 2009 and have an exercise price of CDN$3.60 per share and expire on
October 7, 2011. As of March 15, 2011 2,839,650 of these share purchase warrants
remain outstanding.</P>
<P align=justify>The price ranges for the above-mentioned common share purchase
warrants in Canadian dollars and volume traded on the TSX for the most recently
completed fiscal year ended December 31, 2010 and the months of January and
February 2011 are set out below: </P>
<P align=center>42 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_46></A><BR>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="80%">

  <TR vAlign=top>
    <TD align=center><BR>Date </TD>
    <TD width="16%" align=center><BR>Open </TD>
    <TD width="16%" align=center><BR>High </TD>
    <TD width="16%" align=center><BR>Low </TD>
    <TD width="16%" align=center><BR>Close </TD>
    <TD width="16%" align=center>Volume <BR>Traded </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Feb-11 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>2.90
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.00
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>2.64
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.60
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>339,859 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Jan-11 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.56
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.56
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.97
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>2.66
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>451,155 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Dec-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.34
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.10
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.06
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.75
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>646,433 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Nov-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.73
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>4.45
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.67
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>3.18
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>526,120 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Oct-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.39
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.79
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.31
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.70
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>214,608 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Sep-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.08
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.48
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.05
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.34
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>155,150 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Aug-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>0.88
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>0.97
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>0.66
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>0.97
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>92,250 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Jul-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>0.95
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>0.95
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>0.79
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>0.88
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>51,300 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Jun-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.06
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.17
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.00
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.01
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>68,600 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>May-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.28
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.33
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.02
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.12
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>148,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Apr-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.08
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.30
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>0.95
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.26
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>123,300 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Mar-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.33
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.44
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.06
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.12
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>75,700 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Feb-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.27
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.44
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.09
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.25
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>79,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Jan-10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.40
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.75
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.15
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%" align=center>1.33
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="16%"
      align=right>237,600 </TD></TR></TABLE></DIV><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>ITEM 8: </B></TD>
    <TD width="90%" align=left><B>ESCROWED SECURITIES
</B></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>8.1 </B></TD>
    <TD width="95%" align=left><B>Escrowed Securities </B></TD></TR></TABLE>
<P align=justify>As at December 31, 2010, a total of 93,750 common shares of the
Company were held in escrow. On February 3, 2011, all of these common shares
were cancelled and returned to treasury.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>ITEM 9: </B></TD>
    <TD width="90%" align=left><B>DIRECTORS AND OFFICERS
</B></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>9.1 </B></TD>
    <TD width="95%" align=left><B>Name, Occupation and Security Holding
  </B></TD></TR></TABLE>
<P align=justify>The following is a list of the current directors and executive
officers of the Company, their province/state and country of residence, their
current positions with the Company and their principal occupations during the
past five years: </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="100%">

  <TR vAlign=top>
    <TD align=center><BR><B>Name and </B><BR><B>Province/State and
      </B><BR><B>Country </B><BR><B>of Residence </B><BR></TD>
    <TD width="25%" align=center><BR><BR><B>Principal Occupation
      </B><BR><B>for the </B><BR><B>Last Five Years </B><BR></TD>
    <TD width="25%" align=center><BR><B>Current Position with </B><BR><B>the
      Company </B><BR><B>and </B><BR><B>Period of Service </B><BR></TD>
    <TD width="25%" align=center><B>Approximate number and
      </B><BR><B>percentage of voting </B><BR><B>securities owned, directly
      </B><BR><B>or indirectly or over which </B><BR><B>direction or control is
      </B><BR><B>exercised </B><SUP>(2) </SUP><SUP>(3) </SUP></TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Bradford J. Cooke </B><BR>British Columbia, Canada
    <BR></TD>
    <TD width="25%" align=left>Chairman, CEO and <BR>Director of Endeavour
      <BR>Silver Corp. </TD>
    <TD width="25%" align=left>Director, Chairman and <BR>Chief Executive
      Officer <BR>(From July 25, 2002) </TD>
    <TD width="25%" align=center>1,225,939 <BR>1.50% <BR></TD></TR>
  <TR>
    <TD  align=left>&nbsp;<STRONG>Godfrey J. Walton
      <BR></STRONG>British Columbia, Canada </TD>
    <TD  width="25%" align=left>&nbsp;President, G.J. Walton
      &amp; <BR>Associates Ltd. and <BR>Director, President and <BR>COO of
      Endeavour <BR>Silver Corp. </TD>
    <TD  width="25%" align=left>Director, President and <BR>Chief
      Operating Officer <BR>(From July 25, 2002) </TD>
    <TD  width="25%" align=center>164,189&nbsp;&nbsp;<BR>0.20%
  </TD></TR></TABLE></DIV>
<P align=center>43 <BR><B><I>Endeavour Silver Corp. </I></B></P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_47></A><BR>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="100%">

  <TR vAlign=top>
    <TD align=center><BR><B>Name and </B><BR><B>Province/State and
      </B><BR><B>Country </B><BR><B>of Residence </B><BR></TD>
    <TD width="25%" align=center><BR><BR><B>Principal Occupation
      </B><BR><B>for the </B><BR><B>Last Five Years </B><BR></TD>
    <TD width="25%" align=center><BR><B>Current Position with </B><BR><B>the
      Company </B><BR><B>and </B><BR><B>Period of Service </B><BR></TD>
    <TD width="25%" align=center><B>Approximate number and
      </B><BR><B>percentage of voting </B><BR><B>securities owned, directly
      </B><BR><B>or indirectly or over which </B><BR><B>direction or control is
      </B><BR><B>exercised </B><SUP>(2) </SUP><SUP>(3) </SUP></TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Leonard Harris </B><SUP>(1) </SUP><BR>Colorado, USA
      <BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR></TD>
    <TD width="25%" align=left>Retired, and., Director of <BR>Corriente
      Resources Inc., <BR>Solitario Resources <BR>Corp., Cardero <BR>Resources
      Corp., Alamos <BR>Minerals Ltd, Alamos <BR>Gold Inc., Canarc <BR>Resource
      Corp., Sulliden <BR>Exploration Inc., IMA <BR>Exploration Inc.,
      <BR>Morgain Minerals Inc., <BR>Indico Resources Ltd, <BR>Aztec Metals
      Corp., <BR>Golden Arrow Resources <BR>Corp </TD>
    <TD width="25%" align=left>Director <BR>(From July 24, 2003)
      <BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR></TD>
    <TD width="25%" align=center>20,000 <BR>0.02%
      <BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR></TD></TR></TABLE></DIV>
<P align=center>44 <BR><B><I>Endeavour Silver Corp. </I></B></P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="100%">

  <TR vAlign=top>
    <TD align=left><B>Mario D. Szotlender </B><SUP>(1),(2)</SUP> <BR>Caracas,
      Venezuela </TD>
    <TD width="25%" align=left>President, Mena <BR>Resources Inc. </TD>
    <TD width="25%" align=left>Director <BR>(From July 25, 2002) </TD>
    <TD width="25%" align=center>119,200 <BR>0.14% </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Geoffrey Handley </B><SUP>(1),(2)</SUP> <BR>Sydney,
      Australia <BR><BR><BR><BR><BR></TD>
    <TD width="25%" align=left>Past Executive VP <BR>Strategic Development,
      <BR>Placer Dome Inc., <BR>Currently Director of <BR>Eldorado Gold Ltd,
      <BR>PanAust Limited, <BR>Mirabela Nickel Ltd. </TD>
    <TD width="25%" align=left>Lead Director <BR>(From June 14, 2006)
      <BR><BR><BR><BR><BR></TD>
    <TD width="25%" align=center>Nil <BR><BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Rex McLennan </B><SUP>(2)</SUP> <BR>Alberta, Canada
      <BR><BR><BR><BR><BR><BR><BR><BR></TD>
    <TD width="25%" align=left>Chief Financial Officer of <BR>Viterra Inc.,
      Past Chief <BR>Financial Officer and <BR>Executive Vice President <BR>of
      2010 Vancouver <BR>Olympics Organizing <BR>Committee, Past Chief
      <BR>Financial Officer &amp; <BR>Executive Vice President <BR>of Placer
      Dome Inc. </TD>
    <TD width="25%" align=left>Director <BR>(From June 14, 2007)
      <BR><BR><BR><BR><BR><BR><BR><BR></TD>
    <TD width="25%" align=center>Nil
<BR><BR><BR><BR><BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Ricardo Campoy </B><SUP>(2)</SUP> <BR>New York, USA
      <BR><BR><BR><BR><BR><BR><BR><BR><BR></TD>
    <TD width="25%" align=left>Managing director of <BR>Headwaters MB, Past
      <BR>managing director and <BR>head of minings and <BR>metal group for of
      <BR>WestLB. Currently <BR>Director of Bayswater <BR>Uranium Corporation,
      <BR>Century Mining <BR>Corporation and Forsys <BR>Metals Corp </TD>
    <TD width="25%" align=left>Director <BR>(From July 9, 2010)
      <BR><BR><BR><BR><BR><BR><BR><BR><BR></TD>
    <TD width="25%" align=center>Nil
    <BR><BR><BR><BR><BR><BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Bernard Poznanski</B> <BR>British Columbia, Canada </TD>
    <TD width="25%" align=left>Lawyer, Koffman Kalef <BR>Business Lawyers </TD>
    <TD width="25%" align=left>Corporate Secretary <BR>(From March 9, 2009)
</TD>
    <TD width="25%" align=center>Nil <BR></TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Daniel Dickson</B> <BR>British Columbia, Canada
      <BR><BR><BR><BR></TD>
    <TD width="25%" align=left>CFO of Endeavour since <BR>April 2008,
      Controller for <BR>Endeavour from March, <BR>2007 to March, 2008; <BR>KPMG
      from Sept 2002 to <BR>February 2007 </TD>
    <TD width="25%" align=left>Chief Financial Officer <BR>(From April 1,
      2008) <BR><BR><BR><BR></TD>
    <TD width="25%" align=center>Nil
<BR><BR><BR><BR><BR></TD></TR></TABLE></DIV>
<P align=center>45 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_49></A><BR>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="100%">

  <TR vAlign=top>
    <TD align=left><B>Barry Devlin</B> <BR>Washington, USA <BR><BR><BR><BR></TD>
    <TD width="25%" align=left>VP of Exploration of <BR>Endeavour since May
      <BR>2007, Prior Manager of <BR>Generative Exploration <BR>and Chief
      Geologist for <BR>Hecla Mining </TD>
    <TD width="25%" align=left>Vice President, <BR>Exploration (From May 2,
      <BR>2007) <BR><BR><BR></TD>
    <TD width="25%" align=center>5,000 <BR>0.01% <BR><BR><BR><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left><B>David Howe</B> <BR>Durango, Mexico
      <BR><BR><BR><BR><BR><BR></TD>
    <TD width="25%" align=left>VP of Operations of <BR>Endeavour since
      <BR>November 2007, Prior <BR>General Manager of St. <BR>Ann Jamaica
      Bauxite Ltd. <BR>&amp; Vice President <BR>operations / GM of Hecla
      <BR>Venezuela </TD>
    <TD width="25%" align=left>Vice President <BR>Operations, Mexico (From
      <BR>November 1, 2007) <BR><BR><BR><BR><BR></TD>
    <TD width="25%" align=center>20,000 <BR>0.03%
  <BR><BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Hugh Clarke</B> <BR>British Columbia, Canada
      <BR><BR><BR><BR><BR></TD>
    <TD width="25%" align=left>VP of Corporate <BR>Communications of
      <BR>Endeavour, Prior manager <BR>of Investor Relations for <BR>Endeavour
      Silver Corp. <BR>Investor Relations for <BR>Hunter Dickinson </TD>
    <TD width="25%" align=left>Vice President, Corporate <BR>Communications
      (From <BR>April 1, 2008 ) <BR><BR><BR><BR></TD>
    <TD width="25%" align=center>Nil
<BR><BR><BR><BR><BR><BR></TD></TR></TABLE></DIV><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>Member of Compensation Committee and Member of Corporate
      Governance and Nominating Committee</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>Member of Audit Committee</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(3) </TD>
    <TD>
      <P align=justify>Refer to <U><FONT
      color=#0000ff>www.sedi.ca</FONT></U><U><FONT color=#0000ff> </FONT></U>for
      continuous disclosure of Directors &amp; Officers
  holdings.</P></TD></TR></TABLE>
<P align=center>46 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_50></A>
<P align=justify><B><I>Directors' Terms of Office </I></B></P>
<P align=justify>Each director is elected to serve until the next annual general
meeting of shareholders or until his successor is elected or appointed, or
unless his office is earlier vacated under any of the relevant provisions of the
articles of the Company or the Business Corporations Act (British Columbia).
</P>
<P align=justify><B><I>Control of Securities</I></B></P>
<P align=justify>As at March 15, 2011 the directors and officers of the Company
as a group beneficially owned, directly or indirectly, or exercised control or
direction over an aggregate of 1,554,328 common shares of the Company,
representing approximately 2% of the issued and outstanding common shares of the
Company. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>9.2</B> </TD>
    <TD width="95%" align=left><B>Cease Trade Orders, Bankruptcies, Penalties
      or Sanctions</B> </TD></TR></TABLE>
<P align=justify>Other than as disclosed herein, no director or executive
officer of the Company is, as at the date of this AIF, or has been, within the
ten years preceding the date of this AIF, a director, chief executive officer or
chief financial officer of any company (including the Company) that </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>was subject to a cease trade or similar order or an order
      that denied the relevant company access to any exemption under securities
      legislation, that was in effect for a period of more than 30 consecutive
      days, when such order was issued while the person was acting in the
      capacity of a director, chief executive officer or chief financial officer
      of the relevant company, or</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>was subject to a cease trade or similar order or an order
      that denied the relevant company access to any exemption under securities
      legislation, that was in effect for a period of more than 30 consecutive
      days, that was issued after such person ceased to be a director, chief
      executive officer or chief financial officer of the relevant company, and
      which resulted from an event that occurred while the person was acting in
      the capacity of a director, chief executive officer or chief financial
      officer of the relevant company.</P></TD></TR></TABLE>
<P align=justify>Bernard Poznanski, the Corporate Secretary of the Company, was
a director and Corporate Secretary of Energem Resources Inc. (&#147;Energem&#148;) when
certain management cease trade orders were issued against the insiders of
Energem. Mr. Poznanski ceased to be a director and Corporate Secretary of
Energem on May 1, 2006. Particulars of the orders are as follows: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>On March 7, 2006, the Executive Director of the British
      Columbia Securities Commission (the &#147;BCSC&#148;) issued a management cease
      trade order in connection with the late filing of Energem&#146;s 2005
      comparative annual financial statements, 2005 annual MD&amp;A and a 2005
      Annual Information Form. The management cease trade order was revoked on
      May 31, 2006 after the relevant documents were filed;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>On April 20, 2005, the Executive Director of the BCSC
      issued a management cease trade order in connection with the late filing
      of Energem&#146;s 2004 comparative annual financial statements, 2005 first
      interim period financial statements and MD&amp;A for the 2005 first
      interim period. The management cease trade order was revoked on June 2,
      2005 after the relevant documents were filed; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>On February 25, 2002, the OSC issued the a temporary
      management cease trade order (which was extended on May 9, 2002) in
      connection with the late filing of Energem&#146;s 2001 annual financial
      statements. The management cease trade order expired on June 10, 2002
      after the relevant documents were filed.</P></TD></TR></TABLE>
<P align=justify>No director or executive officer of the Company or any
shareholder holding a sufficient number of common shares of the Company to
affect materially the control of the Company: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>is, as at the date of this AIF, or has been, within the
      ten years preceding the date of this AIF, a director or executive officer
      of any company (including the Company) that, while that person was acting
      in that capacity, or within a year of that person ceasing to act in that
      capacity, became bankrupt, made a proposal under any legislation
      relating to bankruptcy or insolvency or was subject to or instituted any
      proceedings, arrangement or compromise with creditors or had a receiver,
  receiver manager or trustee appointed to hold its assets,</P></TD></TR></TABLE>
<P align=center>47 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>has, within the ten years preceding the date of this AIF,
      become bankrupt, made a proposal under any legislation relating to
      bankruptcy or insolvency, or become subject to or instituted any
      proceedings, arrangement or compromise with creditors, or had a receiver,
      receiver manager or trustee appointed to hold the assets of that
      person,</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>has been subject to any penalties or sanctions imposed by
      a court relating to securities legislation or by a securities regulatory
      authority or has entered into a settlement agreement with a securities
      regulatory authority, or</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD>
      <P align=justify>has been subject to any other penalties or sanctions
      imposed by a court or regulatory body that would likely be considered
      important to a reasonable investor in making an investment decision
      regarding the Company.</P></TD></TR></TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>9.3</B> </TD>
    <TD width="95%" align=left><B>Conflicts of Interest</B>
</TD></TR></TABLE>
<P align=justify>The Company's directors and officers may serve as directors or
officers of other companies or have significant shareholdings in other resource
companies and, to the extent that such other companies may participate in
ventures in which the Company may participate, the directors of the Company may
have a conflict of interest in negotiating and concluding terms respecting the
extent of such participation. In the event that such a conflict of interest
arises at a meeting of the Company's directors, a director who has such a
conflict will abstain from voting for or against the approval of such
participation or such terms. From time to time several companies may participate
in the acquisition, exploration and development of natural resource properties
thereby allowing for their participation in larger programs, permitting
involvement in a greater number of programs and reducing financial exposure in
respect of any one program. It may also occur that a particular company will
assign all or a portion of its interest in a particular program to another of
these companies due to the financial position of the company making the
assignment. In accordance with the laws of British Columbia, the directors of
the Company are required to act honestly, in good faith and in the best
interests of the Company. In determining whether or not the company will
participate in a particular program and the interest therein to be acquired by
it, the directors will primarily consider the degree of risk to which the
Company may be exposed and its financial position at the time. </P>
<P align=justify>The directors and officers of the Company are aware of the
existence of laws governing the accountability of directors and officers for
corporate opportunity and requiring disclosure by the directors of conflicts of
interest and the Company will rely upon such laws in respect of any directors'
and officers' conflicts of interest in or in respect of any breaches of duty by
any of its directors and officers. All such conflicts will be disclosed by such
directors or officers in accordance with the Business Corporations Act (British
Columbia) and they will govern themselves in respect thereof to the best of
their ability in accordance with the obligations imposed upon them by law. </P>
<P align=justify>To the best of its knowledge, the Company is not aware of any
such conflicts of interest. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>ITEM 10:</B> </TD>
    <TD width="90%" align=left><B>PROMOTERS</B> </TD></TR></TABLE>
<P align=justify>Since January 1, 2009 no person or company has acted as a
promoter of the Company. </P>
<P align=center>48 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>ITEM 11:</B> </TD>
    <TD width="90%" align=left><B>LEGAL PROCEEDINGS</B>
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>11.1</B> </TD>
    <TD width="95%" align=left><B>Legal Proceedings</B> </TD></TR></TABLE>
<P align=justify>There are no known legal proceedings to which the Company is a
party or to which any of its property is the subject or any such proceedings
known to the Company to be contemplated. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>11.2</B> </TD>
    <TD width="95%" align=left><B>Regulatory Actions</B> </TD></TR></TABLE>
<P align=justify>During the year ended December 31, 2010, there were no
penalties or sanctions imposed against the Company by a court relating to
securities legislation or by a securities regulatory authority. During the year
ended December 31, 2010, there were no settlement agreements that the Company
entered into before a court relating to securities legislation or with a
securities regulatory authority. Except as described below, there are no other
penalties or sanctions imposed by a court or regulatory body against the Company
that would likely be considered important to a reasonable investor in making an
investment decision.</P>
<P align=justify>Minera Santa Cruz y Garibaldi SA de CV, a subsidiary of
Endeavour, received a $19.1 million assessment on October 12<SUP>th</SUP>, 2010
by Mexican fiscal authorities for failure to provide the appropriate support for
certain expense deductions in the 2006 tax return. During the audit process the
Company retained a big four accounting firm and external counsel to expedite the
audit process and to ensure the delivery of the appropriate documentation. Based
on the advice of our tax advisors and legal counsel, it is the Company&#146;s view
that it provided the appropriate documentation and support for the expenses and
the tax assessment has no legal merit. As a result of a detailed review by the
Company of its accounting records and available information to support the
deductions taken, the Company has estimated a potential tax exposure of $80,000,
plus an estimated additional interest and penalties of $80,000, for which the
Company has made a provision in the consolidated financial statements for the
year ended December 31<SUP>st</SUP> 2010. The Company has commenced the appeal
process. </P>
<P align=justify>The 2006 tax return of Refinadora Plata Guanacevi SA de CV, a
subsidiary of Endeavour, is currently being audited by the Mexican fiscal
authorities. The Company was delayed in providing certain requested
documentation and the Mexican fiscal authorities froze the subsidiary&#146;s bank
accounts. In consulting with external legal counsel, the Company appealed the
actions taken by the Mexican tax authorities through the federal circuit court
which ruled that the bank freeze was unconstitutional. After the ruling, the
court instructed the Mexican authorities to unfreeze the bank accounts, which
occurred shortly after year end. The bank freeze did not affect the Company&#146;s
ability to carry on business, however the Company did not have access to $1.8
million during that time and the Mexican fiscal authorities&#146; actions impacted
the timely refund of value added tax.</P>
<P align=justify>During the audit process the Company retained external legal
counsel to ensure the delivery of the appropriate documentation to the Mexican
fiscal authorities. As a result of a detailed review of the Company&#146;s 2006
financial information and delivery of appropriate requested documents to the
Mexican fiscal authorities, the Company has estimated that there is no
significant remaining potential tax exposure. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>ITEM 12:</B> </TD>
    <TD width="90%" align=left><B>INTEREST OF MANAGEMENT AND OTHERS IN
      MATERIAL TRANSACTIONS</B> </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>12.1</B> </TD>
    <TD width="95%" align=left><B>Interest of Management and Others in
      Material Transactions</B> </TD></TR></TABLE>
<P align=justify>None of the following persons or companies has had any material
interest, direct or indirect in any transaction since January 1, 2008 that has
materially affected or is reasonably expected to materially affect the Company:
</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>a director or executive officer of the
  Company;</P></TD></TR></TABLE>
<P align=center>49 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>a person or company that beneficially owns, or controls
      or directs, directly or indirectly more than 10% of any class or series of
      the outstanding voting securities of the Company; and</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>an associate or affiliate of any of the persons or
      companies referred to in the above paragraphs (a) or
(b).</P></TD></TR></TABLE>
<P align=justify>The Company&#146;s directors and officers may serve as directors or
officers of other public resource companies or have significant shareholdings in
other public resource companies and, to the extent that such other companies may
participate in ventures in which the Company may participate, the directors of
the Company may have a conflict of interest in negotiating and concluding terms
respecting the extent of such participation. The interests of these companies
may differ from time to time. See &#147;Risk Factors &#150; Potential Conflicts of
Interest&#148; and &#147;Conflict of Interest&#148; </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>ITEM 13:</B> </TD>
    <TD width="90%" align=left><B>TRANSFER AGENT AND REGISTRAR</B>
  </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>13.1</B> </TD>
    <TD width="95%" align=left><B>Transfer Agent and Registrar</B>
  </TD></TR></TABLE>
<P align=justify>The transfer agent and registrar for the common shares of the
Company is Computershare Investor Services Inc. at its principal offices in
Vancouver, British Columbia and Toronto, Ontario.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>ITEM 14:</B> </TD>
    <TD width="90%" align=left><B>MATERIAL CONTRACTS</B>
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>14.1</B> </TD>
    <TD width="95%" align=left><B>Material Contracts</B> </TD></TR></TABLE>
<P align=justify>Other than the following contracts, there are no contracts that
are material to the Company that were entered into during the financial year
ended December 31, 2010 or prior thereto but which are still in effect, other
than contracts entered into in the ordinary course of business of the Company:
</P>
<P align=justify>1. Warrant Indenture dated October 7, 2009 between the Company
and Computershare Trust Company of Canada governing 2,941,150 outstanding common
share purchase warrants which comprised a part of units of the Company that were
originally issued pursuant to a CDN$18.5 million prospectus offering of
6,152,500 units at CDN$3.00 per unit. Each common share purchase warrant is
exercisable for one common share of the Company at a price of CDN$3.60 until
October 7, 2011. See &#147;General Development of the Business &#150; Three Year History &#150;
2009&#148;. </P>
<P align=justify>2. Underwriting Agreement dated November 16, 2010 among CIBC
World Markets Inc., Salman Partners Inc., Haywood Securities Inc., RBC Dominion
Securities Inc. (collectively, the &#147;Underwriters&#148;) and the Company in connection
with a prospectus offering of 8,150,000 common shares of the Company at a price
of CDN$6.15 per common share, subject to an over-allotment option granted to the
Underwriters to purchase up to an additional 1,222,500 common shares of the
Company for a period of 30 days following the initial closing date at a price of
CDN$6.15 per common share (collectively, the &#147;Offering&#148;). Pursuant to the
Underwriting Agreement, the Company agreed to pay the Underwriters a cash fee
equal to 5% of the gross proceeds of the Offering. The Offering was completed on
December 1, 2010, with a partial exercise of the over-allotment option. See
&#147;General Development of the Business &#150; Three Year History &#150; 2010&#148;. </P>
<P align=center>50 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>ITEM 15:</B> </TD>
    <TD width="90%" align=left><B>INTERESTS OF EXPERTS</B>
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>15.1</B> </TD>
    <TD width="95%" align=left><B>Names of Experts</B> </TD></TR></TABLE>
<P align=justify>KPMG LLP is the external auditor of the Company and reported on
the fiscal 2010 audited financial statements of the Company filed on SEDAR. </P>
<P align=justify>The Qualified Persons who completed the audit of the reserves
and resources for the Guanacevi Project are Robert J. Leader, P.Eng., William J.
Lewis, BSc., P.Geo., Charley Z. Murahwi, M.Sc., P.Geo., MAusIMM and Dibya Kanti
Mukhopadhyay, MAusIMM, of Micon International (&#147;Micon&#148;). They are the authors of
the report<I>&#147;NI 43-101 Technical Report Audit of the Resource and Reserve
Estimates for the Guanacevi Project, Durango State, Mexico</I>&#148; dated March 15,
2011 filed on Sedar. </P>
<P align=justify>The Qualified Persons who completed the audit of the reserves
and resources for the Guanajuato Mines Project are Rober J. Leader, P.Eng.,
William J. Lewis, BSc., P.Geo., Charley Z. Murahwi P.Geo, MAusIMM, and
(&#147;Micon&#148;). They are the authors of the report <I>&#147;NI 43-101 Technical Report
Audit of the Resource and Reserve Estimates for the Guanajuato Mines Project,
Guanajuato State, Mexico</I>&#148; dated March 15, 2011 filed on Sedar.</P>
<P align=justify>The Qualified Persons who completed the audit of mineral
resource estimate for the Parral Project (El Cometa Property) are William J.
Lewis, BSc., P.Geo., Charley Z. Murahwi, M. Sc., P.Geo, MAusIMM and Dibya Kanti
Mukhopadhyay, M.Sc, MAusIMM of Micon International (&#147;Micon&#148;). They are the
authors of the report <I>&#147;43-101 Technical Report Audit of the Mineral Resource
Estimate for the Parral Project (El Cometa Property),Chihuahua State,
Mexico</I>&#148; dated March 1, 2011 filed on Sedar.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>15.2</B> </TD>
    <TD width="95%" align=left><B>Interests of Experts</B>
</TD></TR></TABLE>
<P align=justify>KPMG LLP have confirmed that they are independent with respect
to the Company within the meaning of the Rules of Professional Conduct of the
Institute of Chartered Accountants of British Columbia. </P>
<P align=justify>To the best of the Company&#146;s knowledge, the other experts named
in Item 15.1 did not have any registered or beneficial interest, direct or
indirect, in any securities or other property of the Company when the experts
prepared their respective reports or afterwards, nor will they receive any such
interest. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>ITEM 16:</B> </TD>
    <TD width="90%" align=left><B>ADDITIONAL INFORMATION</B>
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>16.1</B> </TD>
    <TD width="95%" align=left><B>Additional Information</B>
</TD></TR></TABLE>
<P align=justify>Additional information relating to the Company may be found on
SEDAR at <U><FONT color=#0000ff>www.sedar.com</FONT></U>. Additional
information, including directors&#146; and officers&#146; remuneration and indebtedness,
principal holders of the Company&#146;s securities and securities authorized for
issuance under equity compensation plans, if applicable, is contained in the
Company&#146;s Information Circular pertaining to its most recent Annual General
Meeting of security holders that involves the election of directors. Additional
financial informationis also provided in the Company&#146;s financial statements and
management&#146;s discussion and analysis for its most recently completed financial
year ended December 31, 2010.</P>
<P align=center>51 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>16.2</B> </TD>
    <TD width="95%" align=left><B>Audit Committee</B> </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><I>1.</I> </TD>
    <TD width="95%" align=left><I><U>The Audit Committee&#146;s Charter</U></I>
  </TD></TR></TABLE>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
National Instrument 52-110 Audit Committees (&#147;NI 52-110) requires every issuer
to disclose certain information concerning the constitution of its audit
committee and its relationship with its independent auditor, as set forth
below.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><I>2.</I> </TD>
    <TD width="95%" align=left><I><U>Composition of the Audit
      Committee</U></I> </TD></TR></TABLE>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s audit committee is comprised of four directors, as set forth
below: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>Geoff Handley </TD>
    <TD width="25%" align=left>Ricardo Campoy </TD>
    <TD width="25%" align=left>Mario D. Szotlender </TD>
    <TD width="25%" align=left>Rex McLennan </TD></TR></TABLE>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As defined in NI 52-110, Geoff Handley, Mario Szotlender, Ricardo Campoy and Rex
McLennan are &#147;independent&#148;. The Company therefore meets the requirement of NI
52-110 that all audit committee members be independent. </P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All of the members of the audit committee are financially literate. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><I>3.</I> </TD>
    <TD width="95%" align=left><I><U>Relevant Education and Experience</U></I>
    </TD></TR></TABLE>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<EM>Geoff Handley</EM> &#150; Mr. Handley is a geologist with a Science Degree and
over 30 years experience in the exploration and mining industry which included
analyzing the financial statements of mining companies as an investment analyst
and, later, as the manager/executive responsible for corporate mergers and
acquisition activities at Placer Dome Inc. </P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Ricardo
Campoy</I> &#150; Mr. Campoy has a Bachelor of Science in Mine Engineering from the
Colorado School of Mines and a Master of International Management (Finance) from
the American Graduate School of International Management. Mr. Campoy has over 30
years experience as a mine engineer, investment banker and financial advisor for
the resource industry, financial institutions and investment funds.</P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<EM>Mario Szotlender</EM> - Mr. Szotlender is a financier and businessman with a
Bachelors degree in International Relations from Universidad Central de
Venezuela, Caracas, Venezuela and 16 years experience financing and managing
resource projects in Central and South America.</P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<EM>Rex McLennan</EM> - Mr. McLennan holds a Master of Business Administration
degree from McGill University and a Bachelor of Science degree from the
University of British Columbia. He has held increasingly responsible positions
in the mining and oil and gas sectors. From 1997 to 2005, he was the Executive
Vice President and Chief Financial Officer for Placer Dome Inc., and prior to
this held the position of Vice President and Treasurer with the same company.
For more than ten years, he held positions of increasing responsibility in
business planning, finance and treasury and was a Senior Advisor in the
Treasurer&#146;s Department for Imperial Oil, a publicly traded Canadian subsidiary
of Exxon Corporation. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><I>4.</I> </TD>
    <TD width="95%" align=left><I><U>Reliance on Certain Exemptions</U></I>
  </TD></TR></TABLE>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At no time since the commencement of the Company&#146;s most recently completed
financial year has the Company relied on the following exemptions under NI
52-110: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>the exemption in section 2.4. <I>De Minimis Non-audit
      Services;,</I></P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>the exemption in section 3.2 <I>Initial Public
      Offerings;</I></P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>the exemption in section 3.3(2) <I>Controlled
      Companies;</I></P></TD></TR></TABLE>
<P align=center>52 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD>
      <P align=justify>the exemption in section 3.4 <I>Events Outside Control of
      Member;</I></P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(e) </TD>
    <TD>
      <P align=justify>the exemption in section 3.5 <I>Death, Disability or
      Resignation of Audit Committee Member;</I></P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(f) </TD>
    <TD>
      <P align=justify>the exemption in section 3.6 <I>Temporary Exemption for
      Limited and Exceptional Circumstances;</I></P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(g) </TD>
    <TD>
      <P align=justify>the exemption in section 3.8 <I>Acquisition of Financial
      Literacy;</I></P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(h) </TD>
    <TD>
      <P align=justify>an exemption from NI 52-110, in whole or part, granted
      under Part 8, <I>Exemptions</I></P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><I>5.</I> </TD>
    <TD width="95%" align=left><I><U>Audit Committee Oversight</U></I>
  </TD></TR></TABLE>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At no time since the commencement of the Company&#146;s most recently completed
financial year, has a recommendation of the Committee to nominate or compensate
an external auditor not been adopted by the Board or Directors. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><I>6.</I> </TD>
    <TD width="95%" align=left><I><U>Pre-Approval Policies and
      Procedures</U></I> </TD></TR></TABLE>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The audit committee has not adopted specific policies and procedures for the
engagement of non-audit services. Subject to the requirements of NI 52-110, the
engagement of non-audit services is considered by the Company&#146;s Board of
Directors and, where applicable, by the audit committee, on a case-by-case
basis. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><I>7.</I> </TD>
    <TD width="95%" align=left><I><U>External Auditor Service Fees (By
      Category)</U></I> </TD></TR></TABLE>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Set forth below are details of certain service fees paid to the Company&#146;s
external auditor in each of the last two fiscal years for audit services: </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Financial Year
      End</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="25%"
      align=center><B>Assurance Fees</B><SUP>(1)</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="25%"
      align=center><B>Tax Fees</B><SUP>(2)</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="25%"
      align=center><B>All Other Fees</B><SUP>(3)</SUP> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>December 31, 2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="25%"
      align=center>$479,650 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="25%" align=center>Nil
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="25%"
      align=center>$15,000 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>December 31, 2010
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="25%"
      align=center>$542,105 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="25%" align=center>Nil
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="25%"
      align=center>$53,000 </TD></TR></TABLE></DIV>
<P align=justify>*All amounts are Canadian dollars </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>The aggregate fees billed in each of the last two fiscal
      years for assurance and related services by the Company&#146;s external auditor
      that are reasonably related to the performance of the audit or review of
      the Company&#146;s financial statements.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>The aggregate fees billed in each of the last two fiscal
      years for professional services rendered by the company&#146;s external auditor
      for tax compliance and tax advice.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">(3) </TD>
    <TD>
      <P align=justify>The aggregate fees billed in each of the last two fiscal
      years for products and services provided by the Company&#146;s external
      auditor, other than the services reported under clauses (1) and (2) above.
      The nature of the services in both fiscal periods pertains to advisory
      over the Company&#146;s transition to International Financial Reporting
      Standards.</P></TD></TR></TABLE>
<P align=center>53 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_57></A>
<P align=center><B><U>SCHEDULE &#147;A&#148;</U></B><B> </B></P>
<P align=center><B>ENDEAVOUR SILVER CORP. (the "Company") </B></P>
<P align=center><B>Audit Committee Charter <BR></B>(effective October 31,
2006)<B> </B></P>
<P align=justify>The following Board Charter has been approved by the Board of
Directors (the &#147;<B>Board</B>&#148;) of Endeavour Silver Corp. (the
&#147;<B>Corporation</B>&#148;) as of the date set out above.</P>
<P
align=justify><STRONG><EM>1&nbsp;</EM></STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><EM>Purpose
Of Audit Committee</EM> </STRONG></P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The purpose of the Audit Committee (the &#147;Committee&#148;) is to act as the
representative of the Board of Directors in carrying out its oversight
responsibilities relating to: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>The audit process;
  <LI>The financial accounting and reporting process to shareholders and
  regulatory bodies; and
  <LI>The system of internal financial controls. </LI></UL>
<P align=justify>All reasonably necessary costs to allow the Committee to carry
out its duties shall be paid for by the Company. Also, in carrying out the
foregoing duties, the Committee shall have the right and the ability to retain
any outside legal, accounting or other expert advice or assistance to assist
them in the proper completion of their duties, for and on behalf of the Company
and at its cost, without any requirement for further Board or management
approval of such expenditure.</P>
<P
align=justify><STRONG><EM>2</EM></STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><EM>
Composition </EM></STRONG></P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Committee shall consist of three Directors, all of whom are &#147;independent&#148;
within the meaning of Multilateral Instrument 52-110, <I>Audit Committees,
</I>and as required by all applicable U.S. securities laws and regulations, and
the policies of the American Stock Exchange. The Committee shall be appointed
annually by the Board of Directors immediately following the Annual General
Meeting of the Company. Each member of the Committee shall be financially
literate, meaning that he must be able to read and understand financial
statements. One member of the Committee must have accounting and financial
expertise, meaning that he possesses financial or accounting credentials or has
experience in finance or accounting. </P>
<P
align=justify><STRONG><EM>3&nbsp;</EM></STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<STRONG><EM>Duties </EM></STRONG></P>
<P align=justify>The Committee&#146;s duty is to monitor and oversee the operations
of Management and the external auditor. Management is responsible for
establishing and following the internal controls, financial reporting processes
and for compliance with applicable laws and policies. The external auditor is
responsible for performing an independent audit of the Company&#146;s financial
statements in accordance with generally accepted auditing standards, and for
issuing its report on the statements. The Committee should review and evaluate
this Charter on an annual basis. </P>
<P align=center>54 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_58></A>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
specific duties of the Committee are as follows: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD colSpan=2>
      <P align=justify>Management Oversight:</P></TD></TR>
  <TR>
    <TD vAlign=top  width="5%">&nbsp;</TD>
    <TD  colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Review and evaluate the Company&#146;s processes for
      identifying, analyzing and managing financial risks that may prevent the
      Company from achieving its objectives;</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Review and evaluate the Company&#146;s internal controls, as
      established by Management;</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Review and evaluate the status and adequacy of internal
      information systems and security;</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Meet with the external auditor at least one a year in the
      absence of Management;</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Request the external auditor&#146;s assessment of the
      Company&#146;s financial and accounting personnel;</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Review and evaluate the adequacy of the Company&#146;s
      procedures and practices relating to currency exchange rates;
and</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Review and evaluate the Company&#146;s banking
      arrangements.</P></TD></TR>
  <TR>
    <TD  width="5%">&nbsp;</TD>
    <TD vAlign=top  width="5%">&nbsp;</TD>
    <TD >&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD colSpan=2>
      <P align=justify>External Auditor Oversight</P></TD></TR>
  <TR>
    <TD vAlign=top  width="5%">&nbsp;</TD>
    <TD  colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Review and evaluate the external auditor&#146;s process for
      identifying and responding to key audit and internal control
  risks;</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Review the scope and approach of the annual
  audit;</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Inform the external auditor of the Committee&#146;s
      expectations;</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Recommend the appointment of the external auditor to the
      Board;</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Meet with Management at least once a year in the absence
      of the external auditor;</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Review the independence of the external auditor on an
      annual basis;</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Review with the external auditor both the acceptability
      and the quality of the Company&#146;s accounting principles; and</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Confirm with the external auditor that the external
      auditor is ultimately accountable to the Board of Directors and the
      Committee, as representatives of the shareholders.</P></TD></TR>
  <TR>
    <TD  width="5%">&nbsp;</TD>
    <TD vAlign=top  width="5%">&nbsp;</TD>
    <TD >&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD colSpan=2>
      <P align=justify>Financial Statement Oversight</P></TD></TR>
  <TR>
    <TD vAlign=top  width="5%">&nbsp;</TD>
    <TD  colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Review the quarterly reports with both Management and the
      external auditor;</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Discuss with the external auditor the quality and the
      acceptability of the generally accepted accounting principles applied by
      Management;</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Review and discuss with Management the annual audited
      financial statements; and</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Recommend to the Board whether the annual audited
      financial statements should be accepted, filed with the securities
      regulatory bodies and publicly disclosed.</P></TD></TR>
  <TR>
    <TD  width="5%">&nbsp;</TD>
    <TD vAlign=top  width="5%">&nbsp;</TD>
    <TD >&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD colSpan=2>
      <P align=justify>&#147;Whistleblower&#148; Procedures</P></TD></TR>
  <TR>
    <TD vAlign=top  width="5%">&nbsp;</TD>
    <TD  colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Provide for the receipt, retention and treatment of
      complaints received by the Company regarding accounting, internal
      accounting controls, or auditing matters; and</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">
      <LI></LI></TD>
    <TD>
      <P align=justify>Provide for the confidential, anonymous submission by
      employees of the Company of concerns regarding questionable accounting or
      auditing matter.</P></TD></TR></TABLE>
<P align=center>55 <BR><B><I>Endeavour Silver Corp.</I></B> </P>
<HR align=center color=black SIZE=5 width="100%" noShade>

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</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>exhibit2.htm
<DESCRIPTION>AUDITED CONSOLIDATED FINANCIAL STATEMENTS
<TEXT>
<HTML>
<HEAD>
   <TITLE>Endeavour Silver Corp.: Exhibit 2 - Filed by newsfilecorp.com</TITLE>
   <META name="HandheldFriendly" content="true">
</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<!--$$/page=--><A name=page_1></A>
<P align=center><IMG border=0
src="endl.gif"></P>
<BR>
<P align=center><B>Consolidated Financial Statements </B></P>
<P align=center><B>Years Ended December 31, 2010, 2009 and 2008 </B></P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_2></A>
<P align=justify><B><U>MANAGEMENT&#146;S RESPONSIBILITY FOR FINANCIAL
REPORTING</U></B><B> </B></P>
<P align=justify>The accompanying consolidated financial statements of Endeavour
Silver Corp. (&#147;the Company&#148;) have been prepared by management in accordance with
Canadian generally accepted accounting principles (GAAP), and within the
framework of the significant accounting policies disclosed in the notes to these
consolidated financial statements. </P>
<P align=justify>Management, under the supervision and participation of the
Chief Executive Officer and the Chief Financial Officer, have a process in place
to evaluate disclosure controls and procedures and internal control over
financial reporting as required by Canadian and United States securities
regulations. We, as CEO and CFO, will certify our annual filings with CSA and
SEC, as required in Canada by Multilateral Instrument 52-109 and in the United
States as required by the Securities Exchange Act of 1934, respectively. </P>
<P align=justify>The Board of Directors is responsible for ensuring that
management fulfills its responsibilities for financial reporting and is
ultimately responsible for reviewing and approving the consolidated financial
statements. The Board carries out its responsibility principally through its
Audit Committee which is independent from management.</P>
<P align=justify>The Audit Committee of the Board of Directors meets with
management to review results of the consolidated financial statements and
related financial reporting matters prior to submitting the consolidated
financial statements to the Board of Directors for approval. The Audit Committee
reviews the consolidated financial statements and MD&amp;A; considers the report
of the external auditors; assesses the adequacy of internal controls, including
management&#146;s assessment; examines the fees and expenses for audit services; and
recommends to the Board the independent auditors for appointment by the
shareholders. The independent auditors have full and free access to the Audit
Committee and meet with it to discuss the audit work, financial reporting
matters and our internal control over financial reporting. The Audit Committee
is appointed by the Board of Directors and all of its members are independent
directors.</P>
<P align=justify>March 18, 2011 </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><I>/s/ Bradford
      Cooke</I> </TD>
    <TD  width="33%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="33%" align=left><I>/s/
      Dan Dickson</I> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Chief Executive Officer </TD>
    <TD  width="33%" align=left>&nbsp;</TD>
    <TD width="33%" align=left>Chief Financial Officer
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 2
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_3></A>&nbsp;<BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD  align=left><IMG border=0
      src="kpmgblue.gif"></TD>
    <TD width="33%" align=left><B>KPMG LLP</B> <BR><B>Chartered
      Accountants</B> <BR>PO Box 10426 777 Dunsmuir Street <BR>Vancouver BC V7Y
      1K3 <BR>Canada </TD>
    <TD width="33%" align=left>Telephone (604) 691-3000 <BR>Fax (604) 691-3031
      <BR>Internet www.kpmg.ca </TD></TR></TABLE>
<P align=justify><B>INDEPENDENT AUDITORS' REPORT OF REGISTERED PUBLIC ACCOUNTING
FIRM </B></P>
<P align=justify>To the Shareholders and Board of Directors of Endeavour Silver
Corp.<B> </B></P>
<P align=justify>We have audited the accompanying consolidated financial
statements of Endeavour Silver Corp., which comprise the consolidated balance
sheets as at December 31, 2010 and 2009, and the consolidated statements of
operations and comprehensive income (loss), shareholders&#146; equity and cash flows
for each of the years in the three-year period ended December 31, 2010, and
notes, comprising a summary of significant accounting policies and other
explanatory information. </P>
<P align=justify><I>Management's Responsibility for the Consolidated Financial
Statements </I></P>
<P align=justify>Management is responsible for the preparation and fair
presentation of these consolidated financial statements in accordance with
Canadian generally accepted accounting principles, and for such internal control
as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to
fraud or error. </P>
<P align=justify><I>Auditors&#146; Responsibility </I></P>
<P align=justify>Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. We conducted our audits
in accordance with Canadian generally accepted auditing standards and the
standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free from material misstatement. </P>
<P align=justify>An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on our judgment, including the
assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, we
consider internal control relevant to the entity's preparation and fair
presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating
the overall presentation of the consolidated financial statements. </P>
<P align=justify>We believe that the audit evidence we have obtained in our
audits is sufficient and appropriate to provide a basis for our audit opinion.
</P>
<P align=justify><I>Opinion </I></P>
<P align=justify>In our opinion, the consolidated financial statements present
fairly, in all material respects, the financial position of Endeavour Silver
Corp. as at December 31, 2010 and 2009 and the results of its operations and its
cash flows for each of the years in the three-year period ended December 31,
2010 in accordance with Canadian generally accepted accounting principles. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 3
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_4></A><p><IMG border=0
src="kpmgs.gif"> </p>
<P align=justify><I>Other Matter </I></P>
<P align=justify>We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), Endeavour Silver
Corp.'s internal control over financial reporting as of December 31, 2010, based
on the criteria established in Internal Control &#150; Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and
our report dated March 18, 2011<I> </I>expressed an unmodified opinion on the
effectiveness of Endeavour Silver Corp.&#146;s internal control over financial
reporting.<B> </B></P>
<P align=justify><B>//s// KPMG LLP </B></P>
<P align=justify>Chartered Accountants Vancouver, Canada <BR>March 18, 2011 </P>
<P style="MARGIN-LEFT: 35%" align=justify><font size="1">KPMG LLP is a Canadian limited
liability partnership and a member firm of the KPMG <BR>
network of independent
member firms affiliated with KPMG International Cooperative <BR>
(&#147;KPMG
International&#148;), a Swiss entity.<BR>
KPMG Canada provides services to KPMG
LLP.</font></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 4
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_5></A>&nbsp;<BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD  align=left><img border=0
      src="kpmgblue.gif"></TD>
    <TD width="33%" align=left><B>KPMG LLP</B> <BR><B>Chartered
      Accountants</B> <BR>PO Box 10426 777 Dunsmuir Street <BR>Vancouver BC V7Y
      1K3 <BR>Canada </TD>
    <TD width="33%" align=left>Telephone (604) 691-3000<BR> Fax (604) 691-3031
      <BR>Internet www.kpmg.ca </TD></TR></TABLE>
<P align=justify><B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
</B></P>
<P align=justify>To the Shareholders and Board of Directors of Endeavour Silver
Corp.<B> </B></P>
<P align=justify>We have audited Endeavour Silver Corp. ("the Company")&#146;s
internal control over financial reporting as of December 31, 2010, based on the
criteria established in Internal Control&#151;Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). The
Company's management is responsible for maintaining effective internal control
over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management&#146;s
Report on Internal Controls over Financial Reporting. Our responsibility is to
express an opinion on the Company's internal control over financial reporting
based on our audit. </P>
<P align=justify>We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in
all material respects. Our audit included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk. Our audit also included performing
such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion. </P>
<P align=justify>A company's internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A
company's internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company's assets that could have a
material effect on the financial statements. </P>
<P align=justify>Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 5
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_6></A><p><IMG border=0
src="kpmgs.gif"> </p>
<P align=justify>In our opinion, the Company<B> </B>maintained, in all material
respects, effective internal control over financial reporting as of December 31,
2010, based on the criteria established in Internal Control&#151;Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). </P>
<P align=justify>We have also conducted our audits on the consolidated financial
statements in accordance with Canadian generally accepted auditing standards and
the standards of the Public Company Accounting Oversight Board (United States).
Our report dated March 18, 2011<B><I> </I></B>expressed an unmodified opinion on
those<I> </I>consolidated<I> </I>financial statements. </P>
<P align=justify><B>//s// KPMG LLP </B></P>
<P align=justify>Chartered Accountants </P>
<P align=justify>Vancouver, Canada <BR>March 18, 2011 </P>
<P style="MARGIN-LEFT: 35%" align=justify><font size="1">KPMG LLP is a Canadian limited
liability partnership and a member firm of the KPMG <BR>
network of independent
member firms affiliated with KPMG International Cooperative <BR>
(&#147;KPMG
International&#148;), a Swiss entity.<BR>
KPMG Canada provides services to KPMG
LLP.</font></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 6
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_7></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>CONSOLIDATED BALANCE SHEETS</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>(expressed in
      thousands of US dollars) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center><B>December 31</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>December 31 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center>Notes </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=center>2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>ASSETS</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Current assets</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Cash and cash equivalents </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="10%" align=right><B>&nbsp;68,037</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;26,702 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Short term investments </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>20,009</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Marketable securities </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>4 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>81</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>2,045 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Notes receivable </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>5 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>3,551</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>2,476 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Accounts receivable and
      prepaids </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>6 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>10,299</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>7,467 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Inventories </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>7 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>12,971</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>6,100 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Due from related parties </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=center>8 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>218</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>243 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Total current assets </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>115,166</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>45,033 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Long term deposits </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>778</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>1,153 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Redemption call option on convertible debentures </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>12 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>-</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>2,693 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Mineral property, plant and equipment </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=center>9 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>72,479</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>57,002 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Total
      assets</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right><B>&nbsp;188,423</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;105,881 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>LIABILITIES AND SHAREHOLDERS' EQUITY</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Current liabilities</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Accounts payable and accrued liabilities </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left><B>$</B></TD>
    <TD width="10%" align=right><B>&nbsp;9,464</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;5,230 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Current portion of promissory
      note </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>10 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>231</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>231 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Accrued interest on convertible debentures </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>12 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>-</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>254 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Income taxes payable </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>3,260</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>545 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Total current liabilities </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>12,955</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>6,260 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Promissory note </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>10 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>56</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>248 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Asset retirement obligations </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>11 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>2,242</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>1,740 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Future income tax liability </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>16 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>14,157</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>8,103 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Liability portion of convertible debentures </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=center>12 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>8,149 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Total
      liabilities</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>29,410</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>24,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Shareholders' equity</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Common shares, unlimited shares authorized,
      no par value, issued <BR>&nbsp;&nbsp;&nbsp;&nbsp; and outstanding
      80,720,420 shares (2009 - 60,626,203 shares) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center><BR>Page 9 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><BR><B>183,296</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><BR>112,173 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Equity portion of convertible debentures </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>12 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>-</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>2,164 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Contributed surplus </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>Page 9 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>13,635</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>12,948 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Accumulated comprehensive income </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>Page 9 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>1,656</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>749 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Deficit </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>(39,574</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>(46,653</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Total
      shareholders' equity</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>159,013</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>81,381 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right><B>&nbsp;188,423</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;105,881 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=justify>Commitments (note 9 and note 18)</P>
<P align=justify>Approved on behalf of the Board </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><I>/s/</I>
      <I>Bradford Cooke</I> </TD>
    <TD  width="33%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="33%"
      align=left><I>/s/</I> <I>Godfrey Walton</I> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Director </TD>
    <TD  width="33%" align=left>&nbsp;</TD>
    <TD width="33%" align=left>Director </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 7
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_8></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
      INCOME/(LOSS)</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>(expressed in
      thousands of US dollars, except for shares and per share amounts)
  </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center><B>Year Ended</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>Year Ended </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>Year Ended </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center><B>December 31</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>December 31 </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>December 31 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=center>Notes </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=center><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%" align=center>2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%" align=center>2008
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Revenues </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="10%" align=right><B>&nbsp;86,510</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;50,769 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;39,302 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Cost of sales </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>41,514</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>29,478 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>27,802 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Depreciation and depletion </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>15,447</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>11,264 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>8,383 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Exploration </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>4,283</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>2,394 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>8,570 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>General and administrative </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>5,485</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>4,356 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>5,078 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Accretion of convertible debentures </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>12 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>1,088</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>1,466 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Stock-based
      compensation </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=center>13
      (d)</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>4,679</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right>1,801
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right>2,349
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Earnings (loss) before other items </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>14,014</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>10 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(12,880</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Foreign exchange gain (loss) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>1,156</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(1,057</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(1,452</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Realized gain (loss) on marketable securities </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>195</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>15 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(637</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Mark to market gain (loss) on redemption
      call option </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>12 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>703</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>2,693 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Impairment of asset backed commercial paper </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>5 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>-</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(1,394</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Allowance for value added tax </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(945</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Investment and
      other income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>478</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right>506
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right>305
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Earnings (loss)
      before taxes </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>16,546</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right>2,167
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>(17,003</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Income tax
      provision </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=center>16
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>9,467</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right>4,093
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right>1,001
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left><B>Net earnings (loss) for the year</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right><B>7,079</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>(1,926</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right><B>(18,004</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left><B>)</B> </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Other comprehensive income, net of tax </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Unrealized gain (loss) on marketable
      securities </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>4 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>22</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>150 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(1,145</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Unrealized gain on notes receivable </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>5 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>953</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>423 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Unrealized foreign exchange gain
      (loss) on available for sale securities </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>127</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(21</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=left>&nbsp;Reclassification adjustment for loss (gain) included in
      net income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>(195</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
align=right>(15</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right>637
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>907</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>537 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>(508</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Comprehensive
      income (loss) for the year</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right><B>7,986</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
    align=right>(1,389</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>(18,512</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>) </TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Basic earnings
      (loss) per share</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right><B>&nbsp;0.11</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;(0.04</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;(0.37</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>) </TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Diluted
      earnings (loss) per share</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right><B>&nbsp;0.10</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;(0.04</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;(0.37</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>) </TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Basic weighted average number of shares outstanding</B>
    </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>65,646,786</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>53,212,960 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>49,032,192 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Diluted
      weighted average number of shares outstanding</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right><B>69,122,226</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>53,212,960 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>49,032,192 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P align=justify>See the accompanying notes to the consolidated financial
statements. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 8
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_9></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>CONSOLIDATED STATEMENTS OF SHAREHOLDERS&#146; EQUITY</B>
  </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>(expressed in
      thousands of U.S. dollars, except share amounts) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" colSpan=2 align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center><B>December 31</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>December 31 </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>December 31 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" colSpan=2
    align=center>Notes </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=center>2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=center>2008
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Number of common shares, opening </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" colSpan=2 align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>60,626,203</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>49,080,478 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>48,982,146 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercise of special warrants </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" colSpan=2 align=center>13 (c) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>-</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>2,311,540 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Issued on public offering </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" colSpan=2 align=center>13 (c) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>8,710,000</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>6,152,500 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Issued on private placement </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" colSpan=2 align=center>13 (c) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>-</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>1,299,843 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Exercise of options </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" colSpan=2 align=center>13 (d) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>1,762,500</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>585,800 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>88,000 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercise of warrants </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" colSpan=2 align=center>13 (g) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>2,142,761</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>273,675 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Exercise of convertible debentures </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" colSpan=2 align=center>12 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>6,658,382</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>706,313 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Issued through stock bonus plan </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" colSpan=2 align=center>13 (f) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>41,500</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>80,000 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Issued on acquisition of mineral properties
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" colSpan=2 align=center>9 (a) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>642,204</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>136,054 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Share appreciation
      rights </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" colSpan=2
    align=center>13 (e) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>136,870</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>10,332 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left><B>Number of common shares, closing</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    colSpan=2 align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>80,720,420</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>60,626,203 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>49,080,478 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Common shares, opening </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" colSpan=2 align=center>&nbsp;</TD>
    <TD  width="1%" align=left><STRONG>$</STRONG></TD>
    <TD width="10%" align=right>&nbsp;<STRONG>112,173</STRONG> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;87,584 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;87,458 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Exercise of special warrants </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" colSpan=2 align=center>13 (c) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>2,118 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Issued on public offering, net of issuance costs </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" colSpan=2 align=center>13 (c) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>49,310</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>15,346 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Issued on private placement, net of
      issuance costs </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" colSpan=2 align=center>13 (c) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>3,484 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercise of options </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" colSpan=2 align=center>13 (d) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>7,080</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>1,361 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>105 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Exercise of warrants </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" colSpan=2 align=center>13 (g) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>4,242</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>759 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercise of convertible debentures </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" colSpan=2 align=center>12 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>7,408</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>1,058 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Issued through stock bonus plan </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" colSpan=2 align=center>13 (f) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>193</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>263 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Issued on acquisition of mineral properties </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" colSpan=2 align=center>9 (a) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>2,358</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>200 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Share appreciation rights </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    colSpan=2 align=center>13 (e) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>532</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>21 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Common shares,
      closing</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" colSpan=2
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>&nbsp;<STRONG>183,296</STRONG> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>&nbsp;112,173 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>&nbsp;87,584 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Special warrants, opening </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" colSpan=2 align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%"
    align=left><STRONG>$</STRONG></TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;<STRONG>-</STRONG> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;2,118 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Issued on private placement, net of issuance costs </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" colSpan=2 align=center>13 (c) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>-</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>2,118 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Exercise of special warrants </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    colSpan=2 align=center>13 (c) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>(2,118</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Special
      warrants, closing</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" colSpan=2
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>&nbsp;<STRONG>-</STRONG> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>&nbsp;2,118 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Equity portion of convertible debentures,
      opening </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" colSpan=2 align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%"
    align=left><STRONG>$</STRONG></TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;<STRONG>2,164</STRONG>
    </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Issued on convertible debentures, net of issuance costs </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" colSpan=2 align=center>12 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>-</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>2,393 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Exercise of convertible debentures </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    colSpan=2 align=center>12 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>(2,164</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>(229</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Equity portion
      of convertible debentures, closing</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" colSpan=2
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>&nbsp;<STRONG>-</STRONG> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>&nbsp;2,164 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Contributed surplus, opening </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" colSpan=2 align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%"
    align=left><STRONG>$</STRONG></TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;<STRONG>12,948</STRONG>
    </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;11,285 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;8,921 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Stock-based compensation </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" colSpan=2 align=center>13 (d) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>4,595</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>1,431 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>2,349 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Fair value of agent warrants issued on
      financing </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" colSpan=2 align=center>12, 13 (c) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>1,001 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>82 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercise of share purchase options </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" colSpan=2 align=center>13 (d) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>(3,020</B></TD>
    <TD  width="2%" align=left><B>)</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(533</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(46</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Fair value of exercised warrants </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" colSpan=2 align=center>13 (g) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>(356</B></TD>
    <TD bgColor=#e6efff  width="2%" align=left><B>)</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(236</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Share appreciation
      rights </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" colSpan=2
    align=center>13 (e) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>(532</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
align=right>(21</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left><B>Contributed surplus, closing</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    colSpan=2 align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;<STRONG>13,635</STRONG> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;12,948 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;11,285 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Accumulated other comprehensive income, opening </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" colSpan=2 align=center>&nbsp;</TD>
    <TD  width="1%" align=left><STRONG>$</STRONG></TD>
    <TD width="10%" align=right>&nbsp;<STRONG>749</STRONG> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;212 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;720 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff colSpan=3 align=left>Unrealized foreign exchange gain
      (loss) on available for sale securities </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>127</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(21</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Unrealized gain (loss) on marketable securities </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>22</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>150 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(1,145</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Unrealized gain (loss) on notes receivable
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>953</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>423 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=3 align=left>Realized
      (gain) loss on marketable securities included in net income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>(195</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
align=right>(15</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right>637
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left><B>Accumulated other comprehensive income, closing</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;<STRONG>1,656</STRONG> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;749 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;212 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Deficit, opening </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%"
      align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left><STRONG>$</STRONG></TD>
    <TD width="10%" align=right>&nbsp;<STRONG>(46,653</STRONG></TD>
    <TD  width="2%" align=left><STRONG>)</STRONG> </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;(44,727</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;(26,723</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Earnings (loss) for the period </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>7,079</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>(1,926</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>(18,004</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B>Deficit,
      closing</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="10%"
      align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double"  width="1%"
    align=left><STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="10%"
      align=right>&nbsp;<STRONG>(39,574</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double"  width="2%"
    align=left><STRONG>)</STRONG> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="10%"
      align=right>&nbsp;(46,653</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="10%"
      align=right>&nbsp;(44,727</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double"  width="2%"
    align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left><B>Shareholders' equity</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;<STRONG>159,013</STRONG> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;81,381 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;56,472 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left></TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 9
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_10></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>CONSOLIDATED STATEMENTS OF CASH FLOWS</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>See the
      accompanying notes to the consolidated financial statements.
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="12%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD  width="10%" align=center><STRONG>Year
      Ended</STRONG>&nbsp;&nbsp;</TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>Year Ended </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>Year Ended </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="12%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD  width="10%" align=center><STRONG>December 31,</STRONG>
    </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>December 31, </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>December 31, </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%"
      align=center>Notes </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=center><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%" align=center>2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%" align=center>2008
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Operating activities</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Net earnings (loss) for the period </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left><STRONG>$</STRONG></TD>
    <TD width="10%" align=right><STRONG>7,079</STRONG> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;(1,926</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;(18,004</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Items not affecting cash: </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Stock-based compensation </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>13 (d) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>4,679</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>1,801 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>2,349 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Depreciation and depletion </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>15,447</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>11,264 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>8,383 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Future income tax expense </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>16 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>6,054</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>4,068 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>21 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Unrealized foreign exchange
      loss (gain) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>(65</B></TD>
    <TD bgColor=#e6efff  width="2%" align=left><B>)</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>1,384 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(58</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Impairment of asset backed commercial paper
</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>5 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>-</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>1,394 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Allowance for value added tax
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>945 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;(Gain) loss on marketable securities </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>(195</B></TD>
    <TD  width="2%" align=left><B>)</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(15</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>637 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Accretion of convertible
      debentures </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>12 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>1,088</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>1,466 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Mark to market gain on redemption call option
    </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>12 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>(703</B></TD>
    <TD  width="2%" align=left><B>)</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(2,693</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Net changes in non-cash working capital </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=center>14 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>(700</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>(3,103</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>(291</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Cash from (used
      for) operations </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>32,684</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>12,246 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
    align=right>(4,624</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Investing activites</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Property, plant and equipment
      expenditures </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>(30,176</B></TD>
    <TD bgColor=#e6efff  width="2%" align=left><B>)</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(17,065</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(12,625</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Investment in short term investments </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>(20,009</B></TD>
    <TD  width="2%" align=left><B>)</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Long term deposits </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>375</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(239</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(37</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Investment in marketable securities </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>(1,021</B></TD>
    <TD  width="2%" align=left><B>)</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(2,361</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(3,963</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Proceeds from sale of marketable securities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>3,215</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>581 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>5,995 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Cash used in
      investing activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>(47,616</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>(19,084</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>(10,630</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Financing activities</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Equity issued on exercise of
      options and warrants </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>13 (d) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>7,946</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>1,351 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>2,541 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Equity issued on public offering </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>13 (c) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>52,431</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>17,337 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Equity issued on private
      placement </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>13 (c) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>3,703 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Issuance of convertible debentures </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>12 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>-</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>11,225 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Share issuance costs </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>13 (c) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>(3,121</B></TD>
    <TD bgColor=#e6efff  width="2%" align=left><B>)</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(1,673</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(282</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Debenture issuance costs </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>12 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>-</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(1,191</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Interest paid </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=center>12 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>(989</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>(794</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Cash from
      financing activites </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>56,267</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>29,958 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right>2,259
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Increase (decrease) in cash and cash equivalents </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>41,335</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>23,120 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(12,995</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Cash and cash equivalents, beginning of period </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>26,702</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>3,582 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>16,577 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Cash and cash
      equivalents, end of period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;<STRONG>68,037</STRONG> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;26,702 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;3,582 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P align=justify>See note 14 for supplementary cash flow information. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 10
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left >
      <P align=justify><B>1.</B> </P></TD>
    <TD width="96%" colSpan=2 align=left>
      <P align=justify><B><U>NATURE OF OPERATIONS</U></B> </P></TD></TR>
  <TR>
    <TD >
      <P align=justify> </P></TD>
    <TD width="96%" colSpan=2>
      <P align=justify>&nbsp;</P></TD></TR>
  <TR vAlign=top>
    <TD align=left ></TD>
    <TD width="96%" colSpan=2 align=left>
      <P align=justify>Endeavour Silver Corp. and its subsidiary companies
      (collectively the &#147;Company&#148; or &#147;Endeavour Silver&#148;) are engaged in silver
      mining in Mexico and related activities including acquisition,
      exploration, development, extraction, processing, refining and
      reclamation. </P></TD></TR>
  <TR>
    <TD >
      <P align=justify> </P></TD>
    <TD width="96%" colSpan=2>
      <P align=justify>&nbsp;</P></TD></TR>
  <TR vAlign=top>
    <TD align=left >
      <P align=justify><B>2.</B> </P></TD>
    <TD width="96%" colSpan=2 align=left>
      <P align=justify><B><U>SIGNIFICANT ACCOUNTING POLICIES</U></B> </P></TD></TR>
  <TR>
    <TD >
      <P align=justify> </P></TD>
    <TD width="96%" colSpan=2>
      <P align=justify>&nbsp;</P></TD></TR>
  <TR vAlign=top>
    <TD align=left >
      <P align=justify><B>(a)</B> </P></TD>
    <TD width="96%" colSpan=2 align=left>
      <P align=justify><B>Basis of presentation</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ></TD>
    <TD width="96%" colSpan=2 align=left>
      <P align=justify>These financial statements have been prepared in
      accordance with Canadian generally accepted accounting principles
      (&#147;GAAP&#148;). Significant measurement from United States GAAP are described in
      Note 19 to these financial statements. These consolidated financial
      statements include the accounts of the Company and its subsidiaries. All
      significant intercompany transactions and balances have been eliminated.
      </P></TD></TR>
  <TR>
    <TD >
      <P align=justify> </P></TD>
    <TD width="96%" colSpan=2>
      <P align=justify>&nbsp;</P></TD></TR>
  <TR vAlign=top>
    <TD align=left >
      <P align=justify><B>(b)</B> </P></TD>
    <TD width="96%" colSpan=2 align=left>
      <P align=justify><B>Use of estimates</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ></TD>
    <TD width="96%" colSpan=2 align=left>
      <P align=justify>The preparation of financial statements in conformity
      with GAAP requires management to make estimates that affect the reported
      amounts of assets and liabilities and disclosure of contingent assets and
      liabilities at the date of the financial statements and the reported
      amounts of revenues and expenses during the reporting period. Significant
      areas requiring the use of management estimates relate to the
      determination of mineralized reserves, estimating the fair values of
      financial instruments, estimating the fair value of convertible
      debentures, impairment of long-lived assets, measurement of asset
      retirement obligations, valuation allowances for future income tax assets,
      and assumptions used in determining the fair value of non-cash stock-based
      compensation. Actual results could differ from those estimates. </P></TD></TR>
  <TR>
    <TD >
      <P align=justify> </P></TD>
    <TD width="96%" colSpan=2>
      <P align=justify>&nbsp;</P></TD></TR>
  <TR vAlign=top>
    <TD align=left >
      <P align=justify><B>(c)</B> </P></TD>
    <TD width="96%" colSpan=2 align=left>
      <P align=justify><B>Financial instruments</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ></TD>
    <TD width="96%" colSpan=2 align=left>
      <P align=justify>Financial assets and financial liabilities, including
      derivatives, are measured at fair value on initial recognition and
      recorded on the balance sheet. Measurement in subsequent periods depends
      on whether the financial instrument has been classified as
      held-for-trading, available-for-sale, held-to-maturity, loans and
      receivables or other financial liabilities. </P></TD></TR>
  <TR>
    <TD >
      <P align=justify> </P></TD>
    <TD width="96%" colSpan=2>
      <P align=justify>&nbsp;</P></TD></TR>
  <TR vAlign=top>
    <TD align=left ></TD>
    <TD width="96%" colSpan=2 align=left>
      <P align=justify>Financial assets and liabilities held-for-trading are
      measured at fair value with changes in those fair values recognized in net
      income. Financial assets and financial liabilities considered
      held-to-maturity, loans and receivables, or other financial liabilities
      are measured at amortized cost using the effective interest method of
      amortization. Available-for- sale financial assets are measured at fair
      value with unrealized gains and losses recognized in other comprehensive
      income. Investments in equity instruments classified as available-for-sale
      that do not have a quoted market price in an active market are measured at
      cost. Derivative instruments, including embedded derivatives, are recorded
      on the balance sheet at fair value. Changes in the fair values of
      derivative instruments are recognized in net income with the exception of
      derivatives designated as effective cash flow hedges. The Company has no
      such designated hedges. Information on the Company&#146;s financial instruments
      is further described in Note 17. </P></TD></TR>
  <TR>
    <TD >
      <P align=justify> </P></TD>
    <TD width="96%" colSpan=2>
      <P align=justify>&nbsp;</P></TD></TR>
  <TR vAlign=top>
    <TD align=left >
      <P align=justify><B>(d)</B> </P></TD>
    <TD width="96%" colSpan=2 align=left>
      <P align=justify><B>Fair value of financial instruments</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ></TD>
    <TD width="96%" colSpan=2 align=left>
      <P align=justify>The fair values of the Company&#146;s cash and cash
      equivalents, receivables, and accounts payable and accrued liabilities
      approximate their carrying values due to their short terms to maturity.
      Short term investments, marketable securities and Notes are recorded at
      fair value with unrealized gains and losses at the reporting date
      recognized in comprehensive income unless unrealized losses are indicative
      of other than temporary impairments in value. </P></TD></TR>
  <TR>
    <TD >
      <P align=justify> </P></TD>
    <TD width="96%" colSpan=2>
      <P align=justify>&nbsp;</P></TD></TR>
  <TR vAlign=top>
    <TD align=left >
      <P align=justify><B>(e)</B> </P></TD>
    <TD width="96%" colSpan=2 align=left>
      <P align=justify><B>Comprehensive income/loss</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ></TD>
    <TD width="96%" colSpan=2 align=left>
      <P align=justify>Other comprehensive income represents changes in
      shareholders&#146; equity during a period arising from transactions and other
      events and circumstances from non-owner sources and includes unrealized
      gains and losses on financial assets classified as available-for-sale. The
      components of accumulated comprehensive income are disclosed in the
      consolidated statement of shareholders&#146; equity. </P></TD></TR>
  <TR>
    <TD >
      <P align=justify> </P></TD>
    <TD width="96%" colSpan=2>
      <P align=justify>&nbsp;</P></TD></TR>
  <TR vAlign=top>
    <TD align=left >
      <P align=justify><B>(f)</B> </P></TD>
    <TD width="96%" colSpan=2 align=left>
      <P align=justify><B>Foreign currency translation</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ></TD>
    <TD width="96%" colSpan=2 align=left>
      <P align=justify>The Company uses the U.S. dollar as its functional and
      reporting currency. Therefore accounts denominated in currencies other
      than the U.S. dollar have been translated as follows: </P></TD></TR>
  <TR vAlign=top>
    <TD align=left >
      <P align=justify> </P></TD>
    <TD width="5%" align=left >
      <P align=justify>-</P></TD>
    <TD width="91%" align=right>
      <P align=justify>Revenue and expense items at the rate of exchange in
      effect on the transaction date; </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ></TD>
    <TD width="5%" align=left >
      <P align=justify>- </P></TD>
    <TD width="91%" align=right>
      <P align=justify>Non-monetary assets and liabilities at historical
      exchange rates, unless such items are carried at market, in which case
      they are translated at the exchange rate in effect on the balance sheet
      date; </P></TD></TR>
  <TR vAlign=top>
    <TD align=left >
      <P align=justify> </P></TD>
    <TD width="5%" align=left >
      <P align=justify>-</P></TD>
    <TD width="91%" align=right>
      <P align=justify>Monetary assets and liabilities at the exchange rate in
      effect on the balance sheet date; and </P></TD></TR>
  <TR vAlign=top>
    <TD align=left >
      <P align=justify> </P></TD>
    <TD width="5%" align=left >
      <P align=justify>-</P></TD>
    <TD width="91%" align=right>
      <P align=justify>Exchange gains and losses are recorded in the statement
      of operations in the period in which they occur.
</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 11
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>
      <P align=justify><B>2.</B> </P></TD>
    <TD width="95%" align=left>
      <P align=justify><B><U>SIGNIFICANT ACCOUNTING POLICIES </U></B>(continued)
      </P></TD></TR>
  <TR>
    <TD>
      <P align=justify></P></TD>
    <TD width="95%">
      <P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>
      <P align=justify><B>(g)</B> </P></TD>
    <TD width="95%" align=left>
      <P align=justify><B>Cash and cash equivalents</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD width="95%" align=left>
      <P align=justify>Cash and cash equivalents consist of deposits in banks
      and highly liquid investments with an original maturity at the date of the
      purchase of ninety days or less or are readily convertible into cash.
    </P></TD></TR>
  <TR>
    <TD>
      <P align=justify></P></TD>
    <TD width="95%">
      <P align=justify>&nbsp;&nbsp; </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>
      <P align=justify><B>(h)</B> </P></TD>
    <TD width="95%" align=left>
      <P align=justify><B>Short term investments</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD width="95%" align=left>
      <P align=justify>Short term investments are carried at fair value and are
      comprised of highly liquid investments with terms greater than ninety days
      with low risk of significant changes in values. Short term investments are
      designated held for trading. </P></TD></TR>
  <TR>
    <TD>
      <P align=justify></P></TD>
    <TD width="95%">
      <P align=justify>&nbsp; </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>
      <P align=justify><B>(i)</B> </P></TD>
    <TD width="95%" align=left>
      <P align=justify><B>Marketable securities</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD width="95%" align=left>
      <P align=justify>Marketable securities include investments in shares of
      companies and other investments capable of reasonably prompt liquidation.
      Share investments are classified as available-for-sale and carried at fair
      value with unrealized gains and losses at the reporting date recognized in
      comprehensive income unless unrealized losses are indicative of other than
      temporary impairments in value. </P></TD></TR>
  <TR>
    <TD>
      <P align=justify></P></TD>
    <TD width="95%">
      <P align=justify>&nbsp; </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>
      <P align=justify><B>(j)</B> </P></TD>
    <TD width="95%" align=left>
      <P align=justify><B>Inventories</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD width="95%" align=left>
      <P align=justify>Product inventories are valued at the lower of average
      production cost and net realizable value. Work-in-process inventories,
      including ore stockpiles are valued at the lower of average production
      cost and net realizable value. Finished goods inventory characterized as
      dore bars or concentrate is valued at the lower of average production
      costs and net realizable value. Materials and supplies are valued at the
      lower of cost and replacement cost. Similar inventories within the
      consolidated group are measured using the same method, and the reversal of
      previous write- downs to net realizable value is required when there is a
      subsequent increase in the value of inventories. </P></TD></TR>
  <TR>
    <TD>
      <P align=justify></P></TD>
    <TD width="95%">
      <P align=justify>&nbsp;&nbsp; </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>
      <P align=justify><B>(k)</B> </P></TD>
    <TD width="95%" align=left>
      <P align=justify><B>Mineral properties, plant and equipment</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD width="95%" align=left>
      <P align=justify>Mineral properties include direct costs of acquiring
      properties (including option payments) and costs incurred directly in the
      development process of feasible properties. In-fill and step out drilling,
      along with associated support costs are capitalized on producing
      properties, while exploration expenditures on non-producing properties are
      expensed. All property acquisition costs are capitalized. </P></TD></TR>
  <TR>
    <TD>
      <P align=justify></P></TD>
    <TD width="95%">
      <P align=justify>&nbsp; </P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD width="95%" align=left>
      <P align=justify>Management periodically reviews the carrying value of its
      mineral properties with internal and external mining related
      professionals. A decision to abandon, reduce or expand a specific project
      is based upon many factors including general and specific assessments of
      reserves, anticipated future prices, anticipated future costs of
      exploring, developing and operating a producing mine, expiration term and
      ongoing expense of maintaining leased mineral properties and the general
      likelihood that the Company will continue exploration. The Company does
      not set a pre-determined holding period for properties with unproven
      reserves. However, properties which have not demonstrated suitable mineral
      concentrations at the conclusion of each phase of an exploration program
      are re-evaluated to determine if future exploration is warranted and their
      carrying values are appropriate. </P></TD></TR>
  <TR>
    <TD>
      <P align=justify></P></TD>
    <TD width="95%">
      <P align=justify>&nbsp; </P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD width="95%" align=left>
      <P align=justify>If any area of interest is abandoned or it is determined
      that its carrying value cannot be supported by future production or sale,
      the related costs are charged against operations in the period of
      abandonment or determination that the carrying value exceeds its fair
      value. The amounts recorded as mineral properties represent costs incurred
      to date and do not necessarily reflect present or future values.
</P></TD></TR>
  <TR>
    <TD>
      <P align=justify></P></TD>
    <TD width="95%">
      <P align=justify>&nbsp; </P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD width="95%" align=left>
      <P align=justify>The accumulated costs of mineral properties that are
      developed to the stage of commercial production are amortized using the
      units of production basis using proven and probable reserves (as defined
      by National Instrument 43-101). </P></TD></TR>
  <TR>
    <TD>
      <P align=justify></P></TD>
    <TD width="95%">
      <P align=justify>&nbsp; </P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD width="95%" align=left>
      <P align=justify>Plant and equipment are recorded at cost and amortized
      using the straight-line method at rates varying from 10% to 30% annually.
      </P></TD></TR>
  <TR>
    <TD>
      <P align=justify></P></TD>
    <TD width="95%">
      <P align=justify>&nbsp; </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>
      <P align=justify><B>(l)</B> </P></TD>
    <TD width="95%" align=left>
      <P align=justify><B>Asset retirement obligations</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD width="95%" align=left>
      <P align=justify>These obligations are measured initially at fair value
      and the resulting costs capitalized to the carrying value of the related
      asset. In subsequent periods, the liability is adjusted for any changes in
      the amount or timing of the estimated future cash costs and for the
      accretion of discounted underlying future cash flows. The capitalized
      asset retirement cost is amortized to operations over the life of the
      asset. </P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 12
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>2.</B> </TD>
    <TD width="95%" align=left>
      <P align=justify><B><U>SIGNIFICANT ACCOUNTING POLICIES </U></B>(continued)
      </P></TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD width="95%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ><B>(m)</B> </TD>
    <TD width="95%" align=left>
      <P align=justify><B>Revenue recognition</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ></TD>
    <TD width="95%" align=left>
      <P align=justify>Mineral revenue, based upon prevailing metal prices, is
      recognized upon delivery when title and risk of ownership of metals or
      metal bearing concentrate passes to the buyer and when collection is
      reasonably assured. Revenue is subject to adjustment upon final settlement
      of metal prices, weights and assays. Historically any such adjustments
      have been insignificant. </P></TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD width="95%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ><B>(n)</B> </TD>
    <TD width="95%" align=left>
      <P align=justify><B>Stock-based compensation</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ></TD>
    <TD width="95%" align=left>
      <P align=justify>The Company has a share option plan which is described in
      Note 13(d). The Company records all stock-based compensation for options
      using the fair value method. Under the fair value method, stock-based
      payments are measured at the fair value of the consideration received or
      the fair value of the equity instruments issued or liabilities incurred,
      whichever is more reliably measurable, and are charged to operations over
      the vesting period. The offset is credited to contributed surplus.
      Consideration received on the exercise of stock options is recorded as
      share capital and the related contributed surplus is transferred to share
      capital. The Company generally issues new shares to option holders on the
      exercise of stock-based compensation awards. </P></TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD width="95%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ><B>(o)</B> </TD>
    <TD width="95%" align=left>
      <P align=justify><B>Income taxes</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ></TD>
    <TD width="95%" align=left>
      <P align=justify>The Company follows the asset and liability method of
      accounting for income taxes. Under this method, future tax assets and
      liabilities are recognized for the future tax consequences attributable to
      differences between the financial statement carrying amounts of existing
      assets and liabilities and their respective tax bases, including losses
      carried forward. Future tax assets and liabilities are measured using
      substantively enacted or enacted tax rates expected to apply to taxable
      income in the years in which those temporary differences are expected to
      be recovered or settled. The effect on future tax assets and liabilities
      of a change in tax rates is recognized in income in the period that
      includes the substantive enactment date. Future tax assets are recognized
      to the extent that they are considered more likely than not to be
      realized. The valuation of future income tax assets is adjusted, if
      necessary, by the use of a valuation allowance to reflect the estimated
      realizable amount. </P></TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD width="95%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ><B>(p)</B> </TD>
    <TD width="95%" align=left>
      <P align=justify><B>Earnings (loss) per share</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ></TD>
    <TD width="95%" align=left>
      <P align=justify>Basic income (loss) per share is computed by dividing
      income available to common shareholders by the weighted average number of
      shares outstanding during the period. For all periods presented, income
      available to common shareholders equals the reported income (loss). The
      Company uses the treasury stock method for calculating diluted earnings
      per share. Under the treasury stock method, the weighted average number of
      common shares outstanding used for the calculation of diluted earnings per
      share assumes that the proceeds to be received on the exercise of dilutive
      share options and warrants are used to repurchase common shares at the
      average market price during the year. In the Company&#146;s case, diluted
      income (loss) per share is presented as the same as basic income (loss)
      per share as the effect of outstanding options and warrants in the per
      share calculation is not dilutive in 2008 and 2009. </P></TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD width="95%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ><B>(q)</B> </TD>
    <TD width="95%" align=left>
      <P align=justify><B>Comparative figures</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ></TD>
    <TD width="95%" align=left>
      <P align=justify>Certain of the prior periods&#146; comparative figures have
      been reclassified to conform to the presentation adopted in the current
      year. </P></TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD width="95%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ><B>3.</B> </TD>
    <TD width="95%" align=left>
      <P align=justify><B><U>ADOPTION OF INTERNATIONAL FINANCIAL
      REPORTING</U></B> </P></TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD width="95%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ></TD>
    <TD width="95%" align=left>
      <P align=justify>In 2006, the Canadian Accounting Standards Board ("AcSB")
      published a new strategic plan that will significantly affect financial
      reporting requirements for Canadian companies. The AcSB strategic plan
      outlines the convergence of Canadian GAAP with IFRS over an expected five
      year transitional period. In February 2008 the AcSB announced that 2011 is
      the changeover date for publicly-listed companies to adopt IFRS, replacing
      Canadian GAAP. The date is for interim and annual financial statements
      relating to fiscal years beginning on or after January 1, 2011. The
      adoption date of January 1, 2011 will require the restatement for
      comparative purposes of amounts reported by the Company for the year ended
      December 31, 2010 and fiscal 2010 quarterly interim periods. </P></TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD width="95%">
      <P align=justify> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left ></TD>
    <TD width="95%" align=left>
      <P align=justify>The detailed assessment is near complete and to date the
      Company has identified presentation and disclosure, mineral property,
      plant and equipment, convertible debentures, future income taxes, asset
      retirement obligation and financial instruments as areas where the
      adoption of IFRS may have a material effect on the Company&#146;s financial
      reporting, processes and controls. </P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 13
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_14></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>4.</B> </TD>
    <TD width="95%" align=left><B><U>MARKETABLE SECURITIES</U></B>
  </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="12%"
      align=center><B>December 31</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="12%"
      align=center><B>December 31</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=center><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=center><B>2009</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Investment in marketable securities, at
      cost </TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="12%" align=right><B>&nbsp;35</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="12%" align=right><B>&nbsp;1,828</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Unrealized gain on marketable securities </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><B>41</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><B>150</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Unrealized foreign exchange gain (loss) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>5</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>67</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%"
      align=right><B>&nbsp;81</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%"
      align=right><B>&nbsp;2,045</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>5.</B> </TD>
    <TD width="95%" align=left><B><U>INVESTMENTS IN NOTES RECEIVABLE
      (PREVIOUSLY &#147;ASSET BACKED COMMERCIAL PAPER&#148;)</U></B> </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>At December 31, 2010 the Company held
Canadian dollar denominated restructured Asset Backed Commercial Paper Notes
(the &#147;Notes&#148;) that were obtained in February 2009 from the restructuring of
Canadian Asset Backed Commercial Paper (&#147;ABCP&#148;).</P>
<DIV align=right>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="90%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="13%" align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="13%" align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="13%" align=center>CAN $ </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="13%" align=center><B>Dec 31, 2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="13%" align=center>Dec 31, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center>Notes </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="13%"
      align=center>Maturity Dates </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="13%"
      align=center>Interest Rate </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="13%" align=center>Face
      Amount </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="13%"
      align=center><B>Market Value</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="13%"
      align=center>Market Value </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>MAV II Class A-1 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="13%" align=left>July 15, 2056 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="13%" align=left>BA - 0.5% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="13%" align=right>&nbsp;3,219 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="13%" align=right><B>&nbsp;2,334</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="13%" align=right>&nbsp;1,629 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>MAV II Class A-2 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=left>July 15, 2056 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=left>BA - 0.5% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=right>1,093 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=right><B>705</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=right>525 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>MAV II Class B </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="13%" align=left>July 15, 2056 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="13%" align=left>BA - 0.5% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="13%" align=right>198 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="13%" align=right><B>84</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="13%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>MAV II Class C </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=left>July 15, 2056 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=left>BA + 20.0% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=right>140 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=right><B>15</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>IA
      Tracking Class 15 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="13%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="13%"
    align=left>BA - 0.5% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="13%"
    align=right>464 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="13%"
    align=right><B>413</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="13%"
    align=right>322 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="13%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="13%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="13%"
      align=right>&nbsp;5,114 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="13%"
      align=right><B>&nbsp;3,551</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="13%"
      align=right>&nbsp;2,476 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN-LEFT: 5%" align=justify>During the first quarter of 2010, the
trade activity of the MAV II Trust and the IA Tracking Note Class 15
significantly increased providing a more liquid market, permitting the Company
to estimate the value of the Notes based on current market activity bids.
Effective January 1, 2010, the Company marks to market the Notes based on trade
market bids. The mark to market of the Notes resulted in a $1,075 gain during
the year ended December 31, 2010. The Notes are classified as Level 1 in the
fair value hierarchy, a change from December 31, 2009 where the Notes were
classified within Level 2 of the fair value hierarchy, as the Company then used
inputs other than quoted market prices included in Level 1 that were either
directly or indirectly observable for the asset in estimating fair value. </P>
<P style="MARGIN-LEFT: 5%" align=justify>In 2009, the Company estimated the
value using a basic discounted cash flow model assuming the principal would be
repaid between 2013 and 2016, interest earned at banker acceptance less 50 bps,
and a 12% discount rate. This resulted in an estimated fair value of $2,476 at
December 31, 2009. </P>
<P style="MARGIN-LEFT: 5%" align=justify>In 2008, the Company assessed the
estimated fair value of its ABCP and based on the available information at the
time regarding market conditions, the underlying assets and the indicative
values contained in the report issued by JP Morgan, recorded an additional
impairment charge of $1,394. The Company estimated the value using a basic
discounted cash flow model assuming principal would be repaid between 2013 and
2016, interest earned at banker acceptance less 50 bps, using a 12% discount
rate. This impairment charge resulted in an estimated fair value of $2,115 and a
total impairment charge to the original investment of $2,721 as a $1,327
impairment charge was taken in 2007.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company has classified the Notes as
available for sale. Management has recorded the Notes at their estimated fair
market value with the impact of fair value fluctuations and any related foreign
exchange gains or losses recognized in other comprehensive income, unless such
gains or losses are declines in value that are concluded to be other than
temporary, in which case the declines will be charged to operations.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 14
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_15></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>6.</B> </TD>
    <TD width="95%" align=left><B><U>ACCOUNTS RECEIVABLE AND PREPAIDS</U></B>
    </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="12%"
      align=center><B>December 31</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="12%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%"
      align=center><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%" align=center>2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Value added tax receivables </TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="12%" align=right><B>&nbsp;7,895</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;4,497 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Income tax receivable </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><B>124</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,869 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Other receivables </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right><B>219</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>73 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Prepaids and
      advances </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2,061</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>1,028
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;10,299</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;7,467 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>In 2008, the Company recorded a $945
allowance related to value added tax outstanding from 2008 and periods prior to
2007 which was deemed uncollectible.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>7.</B> </TD>
    <TD width="95%" align=left><B><U>INVENTORIES</U></B>
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="12%"
      align=center><B>December 31</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="12%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%"
      align=center><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%" align=center>2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Warehouse inventory </TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="12%" align=right><B>&nbsp;3,703</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;2,446 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Stockpile inventory </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><B>6,580</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,412 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Finished Goods inventory </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right><B>2,393</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1,834 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Work in process
      inventory </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>295</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>408
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;12,971</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;6,100 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>8.</B> </TD>
    <TD>
      <P align=justify><B><U>RELATED PARTY TRANSACTIONS</U></B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company shares common administrative services and
      office space with related party companies and from time to time will incur
      third party costs on behalf of the related parties on a full cost recovery
      basis. The Company has a $104 receivable related to administration costs
      outstanding as of December 31, 2010 (2009 &#150; $133).</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>During the course of the year the Company paid $ nil
      (2009 - $ nil, 2008 - $155) in consulting fees to a company with common
      directors and management.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company has paid $388 (2009 - $228) for legal
      services to a legal firm with a common member of management. The Company
      has a $39 payable related to legal costs outstanding as of December 31,
      2010 (2009 - $5). In 2008, the Company paid $120 for legal services to a
      separate legal firm with a former member of management.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On December 31, 2007, the Company signed option
      agreements with Aztec Metals Corp. (&#147;Aztec&#148;), a non-public company with
      common directors, whereby Aztec had the right to acquire unexplored
      properties (Rio Chico and Matehuala) for a cash payment of $63 and
      issuance of 533,333 common shares in Aztec.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Aztec paid Endeavour $43 and delivered a signed silver
      participation contract June 30, 2008 to exercise the option on the
      Matehuala property and cancelled the option to acquire the Rio Chico
      property during the year. The common shares acquired by the Company have
      an estimated value of $35 as of December 31, 2010, compared to an original
      cost of $160. The Company has a $114 receivable related to 2008 property
      tax payments and the initial Rico Chico option payment outstanding as of
      December 31, 2010.</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 15
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_16></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>9.</B> </TD>
    <TD width="95%" align=left><B><U>MINERAL PROPERTY, PLANT AND
      EQUIPMENT</U></B> </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Mineral property, plant and equipment
comprise:</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="30%" colSpan=7 align=center><B>December 31, 2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="30%" colSpan=7 align=center>December 31, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center><B>Accumulated</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center><B>Net book</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center>Accumulated </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center>Net book </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>Cost</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>amortization</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>value</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=center>Cost
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center>amortization </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=center>value
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Properties </TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>&nbsp;70,739</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>&nbsp;31,390</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>&nbsp;39,349</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;49,423 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;17,684 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;31,739 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Mill </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right><B>25,525</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right><B>7,006</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right><B>18,519</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>18,738 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>5,348 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>13,390 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Machinery and equipment </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right><B>15,278</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right><B>3,347</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right><B>11,931</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>11,498 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>2,132 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>9,366 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Transportation and vehicles </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right><B>1,336</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right><B>778</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right><B>558</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>1,056 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>528 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>528 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Buildings </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right><B>2,175</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right><B>539</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right><B>1,636</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>1,861 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>359 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>1,502 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Office equipment </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>1,078</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>592</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>486</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=right>870
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=right>393
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=right>477
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;116,131</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;43,652</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;72,479</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;83,446 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;26,444 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;57,002 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>(a)</B> </TD>
    <TD>
      <P align=justify><B>Guanacevi mines</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In June 2005, the Company acquired nine silver mining
      properties in the Guanacevi district, Durango, Mexico, from Industrias
      Pe&#241;oles S.A. de C.V. (&#147;Pe&#241;oles&#148;). The Company is required to send all
      mineral production from these properties to the Pe&#241;oles smelter in
      Torreon, Mexico, for smelting and refining. Pe&#241;oles retains a 3% net
      proceeds royalty on future production after deduction of all shipping and
      smelting costs, including taxes and penalties if any. In 2010, the Company
      paid $1,211 in royalties (2009 - $820, 2008 -$807)</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On November 29, 2007, the Company signed an option to
      acquire a 100% interest in 15 properties within the San Pedro district in
      the state of Durango. The Company issued 120,000 common shares and 60,000
      one-year warrants with an exercise price of $4.65. The fair value of the
      warrants was determined to be $48; the fair value was based on an expected
      stock price volatility of 55.5%, expected life of one year and an
      estimated risk-free rate of 3.98%. The warrants expired unexercised.
      During the year ended December 31, 2010, the Company issued 570,776 shares
      with a market value at the time of issuance of $2,118 to acquire 100% of
      the properties.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In February 2009, the Company signed an option agreement
      to acquire Porvenir Cuatro concessions located in the Guanacevi district
      for payments totaling $700 over two years. The Company paid $100 on
      ratification of the option and issued 136,426 shares equivalent to $200.
      To acquire the property, the Company was required to issue an additional
      $240 worth of shares within one year of the agreement date and $160 in
      cash or shares within two years of the agreement date. During the year
      ended December 31, 2010, the Company issued 71,428 shares with a market
      value at the time of issuance of $240 and paid $160 to acquire the
      property.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Property concessions acquired by the Company in the
      Guanacevi District are maintained with nominal property tax payments to
      the Mexican government.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>(b)</B> </TD>
    <TD>
      <P align=justify><B>Guanajuato mines</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In 2007, the Company acquired the exploitation contracts
      and underlying assets to the Guanajuato silver-gold mines located in the
      northern parts of the Guanajuato and La Luz silver districts in the state
      of Guanajuato, Mexico.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In 2010, the Company acquired a 100% interest in 192
      hectares titled the Belen properties, located in the Guanajuato district
      for total remuneration of $200. The Company is required to pay a 2% net
      smeleter return (&#147;NSR&#148;) royalty on any production from the Belen
      properties.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company holds various property concessions in the
      Guanajuato District that it maintains with nominal property tax payments
      to the Mexican government.</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 16
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_17></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B><U>MINERAL PROPERTY, PLANT AND EQUIPMENT
      </U></B>(continued)</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>(c)</B> </TD>
    <TD>
      <P align=justify><B>Parral properties</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In August 2006, the Company acquired the option to
      purchase the concession rights in the El Cometa properties. During the
      year ended December 31, 2009, the Company made the final payments on the
      properties totaling $100 to acquire the concession rights for total
      compensation of $350.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In August 2009, the Company acquired the option to
      acquire a 100% interest in the San Juanico properties by making $130
      payments over 18 months and a final payment of a minimum $300 up to a
      maximum of $1,900 based on the NI 43-101 compliant silver-equivalent
      resources at the exercise date (using gold as an equivalent based on a
      price ratio of silver and gold) within 24 months. The Company has paid
      $100 of the option as of December 31, 2010. Subsequent to year end, the
      Company made the next $30 option payment. As of December 31, 2010, the
      Company has completed a NI 43-101 compliant resource estimate indicating
      silver equivalent resources to be less than 10 million ounces resulting in
      the estimated final payment to be $300 due prior to August 2011.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company also entered into an agreement with the
      current owner of San Juanico to share in the production from the
      properties during the 24 month option period. The Company has agreed to
      advance the owner up to $150 at an annual interest rate of 9% to redevelop
      the San Juanico mine back into small scale production. The loan is secured
      by a first mortgage on the San Juanico properties. As of December 31,
      2010, the Company advanced $150 (2009- $130) held in prepaids and
      advances. In 2010, the San Juanico property did not produce any
      significant production.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>(d)</B> </TD>
    <TD>
      <P align=justify><B>Arroyo Seco properties</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In October 2006, the Company acquired an option to
      purchase a 100% interest in the Arroyo Seco property, in Michoacan, Mexico
      for $229 payable over a four year period. During 2009, the Company
      acquired 100% interest in the property with the final $45
  payment.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>(e)</B> </TD>
    <TD>
      <P align=justify><B>San Sebastien</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In February 2010, the Company acquired the option to
      acquire a 100% interest in the San Sebastian properties, located in
      Jalisco, Mexico by paying a total of $2,750 over three years, of which the
      Company has paid $100. Subsequent to year end, the Company made a $100
      payment. The Company is required to pay a 2% NSR royalty on any production
      from the San Sebastien properties.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>(f)</B> </TD>
    <TD>
      <P align=justify><B>Mineral property contingencies</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Management believes the Company has diligently
      investigated rights of ownership of all of the mineral properties to a
      level which is acceptable by prevailing industry standards with respect to
      the current stage of development of each property in which it has an
      interest and, to the best of its knowledge, all agreements relating to
      such ownership rights are in good standing. However, all properties may be
      subject to prior claims, agreements or transfers, and rights of ownership
      may be affected by undetected defects.</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 17
      - </TD></TR></TABLE><BR>
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width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>10.</B> </TD>
    <TD>
      <P align=justify><B><U>PROMISSORY NOTE</U></B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In April 2009, the Company purchased $918 of mining
      equipment from Sandvik Mining and Construction de Mexico SA de CV
      (&#147;Sandvik&#148;). The Company financed $596 of the purchase by a promissory
      note, which is paid with equal installments over a 36 month period
      incurring simple annual interest of 10% on the outstanding balance. As of
      December 31, 2010, a balance of $287 remains. The promissory note has been
      designated as other liabilities and is recognized at amortized
  cost.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>11.</B> </TD>
    <TD>
      <P align=justify><B><U>ASSET RETIREMENT OBLIGATIONS</U></B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Although the ultimate amount of the reclamation costs to
      be incurred cannot be predicted with certainty, the total undiscounted
      amount of estimated cash flows required to settle the Company&#146;s estimated
      obligations is $1,670 for the Guanacevi mine operations and $783 for the
      Guanajuato mine operations (2009 &#150; $1,258 and $600, respectively), which
      has been discounted using a credit adjusted risk free rate of 8.75%.
      Significant reclamation and closure activities include land
      rehabilitation, decommissioning of buildings and mine facilities, ongoing
      care and maintenance and other costs. The timing of cash flows has been
      estimated based on the mine lives using current reserves with undiscounted
      expenditures of $516 estimated in 2012 at Guanajuato operations, while the
      remaining estimated obligation would be incurred subsequent to
  2014.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Changes to the reclamation and closure cost balance
      during the period are as follows:</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" bgColor=#e6efff
      align=left>Balance at December 31, 2008 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-TOP: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;1,445 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Changes during the period: </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Incurrence at Guanacevi </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp; &nbsp;Incurrence at
      Guanajuato </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Change in estimate </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>135 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp; &nbsp; &nbsp;Interest accretion </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>160 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Balance at December 31, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;1,740 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Changes during the period: </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Incurrence at Guanacevi </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>269 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp; &nbsp;Incurrence at
      Guanajuato </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>90 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Change in estimate </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp; &nbsp; &nbsp;Interest accretion </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>143 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
      align=left><B>Balance at December 31, 2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;2,242</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The present value of the reclamation
liabilities may be subject to change based on management&#146;s changes to estimates,
changes in remediation technology or changes to the applicable laws and
regulations.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 18
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>12.</B> </TD>
    <TD>
      <P align=justify><B><U>CONVERTIBLE DEBENTURES</U></B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In February 2009, the Company issued CAN $13,993 in 10%
      subordinated unsecured convertible redeemable debentures (the
      &#147;Debentures&#148;) maturing February 2014. The interest was 10% annually, paid
      quarterly in arrears. At any time, each Debenture was convertible by the
      holder into one unit consisting of one of the Company&#146;s common shares and
      one half of a common share purchase warrant at an initial conversion rate
      of 526.3 units for each CAN $1,000 Debenture, representing an initial
      conversion price of CAN $1.90 per unit. Additional units would have become
      issuable following the occurrence of certain corporate acts or events.
      Each full share purchase warrant entitled the holder to purchase one
      common share at an exercise price of CAN $2.05 per share. Subsequent to
      August 26, 2010, each Debenture could be redeemed by the Company for cash,
      plus a redemption fee of 7%, provided the closing share price is greater
      than CAN $2.85 per share.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>As the Debentures included both cash payment and equity
      conversion features, the original gross proceeds were allocated between
      liability and equity elements. The liability element was designated as
      other liabilities and was recognized at amortized cost. The related
      transaction costs were allocated on a proportional basis. The transaction
      costs associated with the liability portion of the Debentures were
      deferred and amortized over their expected term.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>As of August 26, 2010, the Company&#146;s share price was
      greater than CAN $2.85 per share, therefore the Company provided
      redemption notice to all debenture holders providing ten business days to
      convert all outstanding debentures. At the time of notice there were 7,874
      debentures remaining and subsequently were all converted for 4,144,189
      common shares and 2,072,079 warrants. During fiscal 2010 a total of
      6,658,382 common shares and 3,329,168 warrants were issued on conversion
      of convertible debentures.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>As at August 26, 2010, the redemption option was valued
      at $2,233 using a binomial lattice model with a volatility estimate of
      65%, risk free rate of 1.8% and estimated borrowing rate of 11.2% over the
      life of the Debentures (December 31, 2009 - $2,693). The redemption option
      was designated as held for trading and market fluctuations were charged to
      operations. For the year ended December 31, 2010 a gain of $703 (December
      31, 2009 - $2,693) was recorded on conversion of the debentures and $3,396
      was allocated to equity.</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="12%" align=center><B>CAN
      $</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="12%" align=center><B>US
      $</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>Liability portion of convertible
      debentures</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Opening balance at 12/31/09 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>8,549 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>8,149 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Opening accrued interest </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>267 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>254 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Accretion expense </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,126 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,088 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Interest accrued </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Interest paid </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(1,010</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(989</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Conversion into common shares </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(8,932</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(8,640</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Foreign exchange
      (gain)/loss on revaluation </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>138
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left><B>Closing balance of liability portion</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>Equity portion of convertible
      debentures</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Opening balance at 12/31/09 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,699 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,164 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Conversion into common shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(2,699</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(2,164</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Closing balance
      of equity portion</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%"
      align=right><B>&nbsp;-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%"
      align=right><B>&nbsp;-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left><B>Redemption call option on convertible debentures</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Opening balance at 12/31/09 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,825 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,693 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Mark to market gain on redemption call option </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>687 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>703 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Conversion into common shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(3,512</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(3,396</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Closing balance
      of redemption call option on debentures</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%"
      align=right><B>&nbsp;-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%"
      align=right><B>&nbsp;-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 19
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>13.</B> </TD>
    <TD width="95%" align=left><B><U>SHARE CAPITAL</U></B>
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>(a)</B> </TD>
    <TD colSpan=2>
      <P align=justify>The Company considers the items included in the
      consolidated statement of shareholders&#146; equity as capital. The Company&#146;s
      objective when managing capital is to safeguard its ability to continue as
      a going concern, so that it can continue to provide returns for
      shareholders and benefits for other stakeholders<B>. </B>The Company
      manages the capital structure and makes adjustments to it in light of
      changes in economic conditions and the risk characteristics of the
      underlying assets. In order to maintain or adjust the capital structure,
      the Company may issue new shares through private placements, convertible
      debentures, asset acquisitions or return capital to shareholders. The
      Company is not subject to externally imposed capital
  requirements.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>(b)</B> </TD>
    <TD colSpan=2>
      <P align=justify>As at December 31, 2010 and 2009 a total of 93,750 common
      shares are held in escrow. Subsequent to year end, these shares were
      cancelled.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>(c)</B> </TD>
    <TD colSpan=2>
      <P align=justify><B>Private Placements/Public Offerings</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%" align=left>(i) </TD>
    <TD>
      <P align=justify>In December 2010, the Company issued 8,710,000 common
      shares in a prospectus offering and partial exercise of the over allotment
      at CAN $6.15 per common share for gross proceeds of CAN $53.6 million. The
      agents received a cash commission of 5% totaling $2.7 million, while other
      share issuance costs totaled an additional $0.4 million and have been
      included in equity.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%" align=left>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%" align=left>(ii) </TD>
    <TD>
      <P align=justify>In October 2009, the Company completed a prospectus
      offering and exercise of the over allotment for 6,152,500 units at CAN
      $3.00 per unit for gross proceeds of CAN $18.5 million. Each unit is
      comprised of one common share and one-half of a common share purchase
      warrant. Each whole share purchase warrant is exercisable to purchase one
      common share at an exercise price of CAN $3.60 until October 7, 2011. The
      agents received a cash commission of 6% totaling $1.1 million and 369,150
      agents&#146; warrants at an exercise price of CAN $3.00 until October 7, 2011.
      The warrants issued to the agents have an estimated fair value of $0.5
      million and have been recorded in share capital on a net basis. Share
      issuance costs including the finders&#146;fee totaled $1,992.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%" align=left>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%" align=left>(iii) </TD>
    <TD>
      <P align=justify>In October 2009, the Company completed a non-brokered
      private placement for 1,299,843 units at CAN$3.00 per unit for gross
      proceeds of CAN$ 3.9 million. Each unit consisted of one common share and
      one-half of a common share purchase warrant. Each whole share purchase
      warrant is exercisable to purchase one common share at an exercise price
      of CAN$3.60 until October 26, 2011 (Note 14(g)). A finders&#146; fee of 6% was
      paid on a portion of the private placement totaling $154. Share issuance
      costs including the finders&#146;fee totaled $219.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%" align=left>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%" align=left>(iv) </TD>
    <TD>
      <P align=justify>In December 2008, the Company completed a brokered and
      non brokered private placement of special warrants for 2,311,540 units at
      CAN $1.30 per unit for gross proceeds of CAN $3.0 million. Each special
      warrant was exercisable into a unit comprised of one common share and
      one-half of a common share purchase warrant. Each whole share purchase
      warrant is exercisable to purchase one common share at an exercise price
      of CAN $1.90 until February 25, 2014. The agents received a cash
      commission of 6% totaling $140 and 131,792 agents&#146; warrants at an exercise
      price of CAN $1.51 until February 25, 2014. The warrants issued to the
      agents have an estimated fair value of $0.1 million and have been recorded
      in share capital on a net basis. All of the special warrants were
      converted into units February 25, 2009 and the value assigned to the
      special warrants was reclassified into share capital in the period ended
      March 31, 2009.</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 20
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><B><U>SHARE CAPITAL</U></B><B>
</B>(continued)<B> </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>(d)</B> </TD>
    <TD>
      <P align=justify><B>Purchase options</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Options to purchase common shares have been granted to
      directors, officers, employees and consultants pursuant to the current
      Company&#146;s stock option plan approved by the Company&#146;s shareholders in
      fiscal 2009 at exercise prices determined by reference to the market value
      on the date of the grant. The stock option plan allows for, with approval
      by the Board of Directors, granting of options to its directors, officers,
      employees and consultants to acquire up to 10% of the issued and
      outstanding shares at any time.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The following table summarizes the status of the
      Company&#146;s stock option plan and changes during the periods
    presented:</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Prices expressed
      in CAN $ </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="19%" colSpan=4
    align=center><B>December 31, 2010</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="19%" colSpan=4
    align=center>December 31, 2009 </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="19%" colSpan=4
    align=center>December 31, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center><B>Weighted</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center>Weighted </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center>Weighted </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center><B>average</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center>average </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center>average </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=center><B>Number</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center><B>exercise</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center>Number </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center>exercise </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center>Number </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="8%" align=center>exercise </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=center><B>of
      Shares</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>price</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=center>of
      Shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=center>price
    </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=center>of
      Shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=center>price
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Outstanding, beginning of period </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right><B>5,187,700</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>2.63</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>4,733,400 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>3.28 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>4,089,400 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>3.25 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Granted </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right><B>1,819,000</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left><B>$</B></TD>
    <TD width="8%" align=right><B>3.73</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>2,325,000 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="8%" align=right>2.71 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>2,133,000 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="8%" align=right>3.20 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Exercised <SUP>(1)</SUP> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right><B>(2,120,700</B></TD>
    <TD bgColor=#e6efff  width="2%" align=left><B>)</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>2.39</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>(585,800</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>1.61 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>(88,000</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>0.83 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Cancelled </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>(221,000</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>2.49</B> </TD>
    <TD  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>(1,284,900</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=right>4.71
    </TD>
    <TD  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>(1,401,000</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=right>3.31
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Outstanding, end of period </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right><B>4,665,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right><B>3.17</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right>5,187,700 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right>2.63 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right>4,733,400 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right>3.28 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Options exercisable at period-end </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right><B>3,575,200</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right><B>3.00</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right>2,669,700 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right>2.57 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right>4,263,400 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="8%"
    align=right>3.33 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><SUP>(1)</SUP> 358,200 options priced
with a weighted average price of CAN $2.48 were cancelled in exchange for
136,870 share appreciation rights in 2010, while there were no cancellations of
options for share appreciation rights in 2009 and 20,000 options priced were
cancelled in exchange for 10,332 share appreciation rights in 2008. </P>
<P style="MARGIN-LEFT: 5%" align=justify>The following tables summarize
information about stock options outstanding at December 31, 2010: </P>
<DIV align=right>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="95%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" colSpan=13
    align=center><B>Prices expressed in CAN $</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=7
    align=center>Options Outstanding </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=4
    align=center>Options Exercisable </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="14%" align=center>Weighted </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="14%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="14%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="14%" align=center>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=center>Number </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="14%" align=center>Average </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="14%" align=center>Weighted </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="14%" align=center>Number </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="14%" align=center>Weighted </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center>CAN $ </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=center>Outstanding </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="14%" align=center>Remaining </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="14%" align=center>Average </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="14%" align=center>Exercisable </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="14%" align=center>Average </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center>Price </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=center>as at </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="14%" align=center>Contractual Life </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="14%" align=center>Exercise </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="14%" align=center>as at </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="14%" align=center>Exercise </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Intervals </TD>
    <TD  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="14%" align=center>Dec
      31, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="14%"
      align=center>(Number of Years) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="14%"
      align=center>Prices </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="14%" align=center>Dec
      31, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="14%"
      align=center>Prices </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=center>$1.00 - $1.99 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="14%" align=right>640,000 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="14%" align=right>3.5 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="14%" align=right>1.87 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="14%" align=right>635,000 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="14%" align=right>1.87 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center>$2.00 - $2.99 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=right>794,600 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=right>0.7 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="14%" align=right>2.78 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=right>794,600 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="14%" align=right>2.78 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=center>$3.00 - $3.99 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="14%" align=right>3,124,400 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="14%" align=right>4.0 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="14%" align=right>3.47 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="14%" align=right>2,095,600 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="14%" align=right>3.88 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center>$4.00 - $4.99 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=right>56,000 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=right>6.0 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="14%" align=right>4.80 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=right>40,000 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="14%" align=right>4.89 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=center>$5.00 - $5.99 </TD>
    <TD bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="14%"
    align=right>50,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="14%"
    align=right>4.9 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="14%"
    align=right>5.69 </TD>
    <TD bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="14%"
    align=right>10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="14%"
    align=right>5.69 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="14%"
    align=right>4,665,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="14%"
    align=right>3.4 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="14%"
    align=right>3.17 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="14%"
    align=right>3,575,200 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="14%"
    align=right>3.00 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN-LEFT: 5%" align=justify>During the year ended December 31,
2010, the Company recognized stock-based compensation expense of $4,595 (2009 -
$1,430, 2008 &#150; $2,349) based on the fair value of options granted. </P>
<P style="MARGIN-LEFT: 5%" align=justify>Option pricing models require the input
of highly subjective assumptions including the expected price volatility.
Changes in the subjective input assumptions can materially affect the fair value
estimate, and therefore the existing models do not necessarily provide a
reliable single measure of the fair value of the Company&#146;s stock options. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 21
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD width="95%" align=left><B><U>SHARE CAPITAL</U></B> (continued) </TD></TR>
  <TR>
    <TD  >&nbsp;</TD>
    <TD width="95%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD  align=left ></TD>
    <TD width="95%" align=left>
      <P align=justify>The weighted average fair values of stock options granted
      and the assumptions used to calculate compensation expense have been
      estimated using the Black-Scholes Option Pricing Model with the following
      assumptions for the period ended: </P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%" align=center><B>Year
      Ended</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%" align=center>Year
      Ended </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%" align=center>Year
      Ended </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>December 31, 2010</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center>December 31, 2009 </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center>December 31, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Weighted average fair value of options
      granted during the period </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>1.94 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>1.44 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>1.71 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Risk-free interest rate </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>2.17% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>2.24% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>3.23% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Expected dividend yield </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>0% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>0% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>0% </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Expected stock price volatility </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>77% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>76% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>67% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Expected option
      life in years </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%" align=right>3.65
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%" align=right>4.03
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%" align=right>4.00
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Option pricing models require the input of highly
      subjective assumptions. The expected option life considered such factors
      as the average length of time similar option grants in the past have
      remained outstanding prior to exercise, expiry or cancellation and the
      vesting period of the grants. Volatility was estimated based on historical
      price observations over the expected term. Changes in the subjective input
      assumptions can materially affect the estimated fair value of the options.
      The Company amortizes the fair value of stock options on a straight-line
      basis over the respective vesting period of the entire stock option award.
      As of December 31, 2010, the non-vested stock option expense not yet
      recognized was $1,229 (2009 - $2,483) which is expected to be recognized
      over the next 23 months.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On May 26<SUP>th </SUP>, 2010, the Board of Directors
      approved a re-pricing of 15,000 employee options with weighted average
      remaining contractual life of 2.6 years and option price of CAN $5.36. The
      re-priced options weighted contractual life will remain 2.6 years, while
      the options will have an exercise price of CAN $3.67 and a one year
      vesting period.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On July 29<SUP>th </SUP>, 2009, the Board of Directors
      approved a re-pricing of 670,000 employee options with weighted average
      remaining contractual life of 4.4 years and option price of CAN $3.79. The
      re-priced options weighted contractual life will remain 4.4 years, while
      the options will have an exercise price of CAN $2.01 and a one year
      vesting period. Using the Black Scholes model, the option re-pricing
      resulted in an additional estimate fair market value of $222 for the
      change in exercise prices as of July 29<SUP>th </SUP>, 2009. The
      additional fair value is recognized over the additional vesting period,
      resulting in $104 expense in 2009.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On July 29<SUP>th </SUP>, 2009, the Board of Directors
      approved the cancellation of 1,120,000 insider options with weighted
      average remaining contractual life of 6.8 years and option price of CAN
      $4.89. The insider options were fully vested, therefore the cancellation
      had no impact to stock based compensation.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>(e)</B> </TD>
    <TD>
      <P align=justify><B>Share appreciation rights plan</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company allowed that in the event that the Company
      graduated to a TSE listing, a participant may, as allowed under the
      Exchange policies, if determined by the Board, have the right (the
      &#147;Right&#148;), when entitled to exercise an Option, to terminate such Option in
      whole or in part by notice in writing to the Company and in lieu of
      receiving Common Shares pursuant to the exercise of the Option, shall
      receive instead and at no cost to the participant that number of Common
      Shares, disregarding fractions, which, when multiplied by the market price
      on the day immediately prior to the exercise of the Right, have a total
      value equal to the product of that number of Common shares subject to the
      Option times the difference between the market price on the day
      immediately prior to the exercise of the Right and the Option exercise
      price. The shareholder rights plan agreement was approved and activated
      June 14, 2006. During fiscal 2010, 358,200 options (2009 &#150; nil, 2008 &#150;
      20,000) were cancelled for the exchange of 136,870 share appreciation
      rights (2009 &#150; nil, 2008 &#150; 10,332).</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>(f)</B> </TD>
    <TD>
      <P align=justify><B>Stock Bonus Plan</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>As of June 2, 2009, shareholders approved a stock bonus
      plan whereby the Board of Directors have the authority to grant common
      shares without par value in the Company to the directors, executive
      officers and employees of the Company up to, in aggregate, a maximum of
      250,000 common shares per calendar year. During the year, 41,500 (2009 &#150;
      80,000, 2008 - nil) common shares were granted to employees of the Company
      valued at $84 (2009 - $371) expensed as stock based
  compensation.</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 22
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_23></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><B><U>SHARE CAPITAL</U></B><B>
</B>(continued)<B> </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>(g)</B> </TD>
    <TD>
      <P align=justify><B>Warrants</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>At December 31, 2010, the Company had outstanding
      warrants to purchase an aggregate 6,842,140 common shares as
    follows:</P></TD></TR></TABLE><BR>
<DIV align=right>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="95%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=center>Exercise </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%" align=center>&nbsp;
    </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%"
      align=center>Oustanding at </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%" align=center>&nbsp;
    </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%" align=center>&nbsp;
    </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%" align=center>&nbsp;
    </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%"
      align=center>Oustanding at </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
  align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Price </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>Expiry Dates </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>December 31, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>Issued </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>Exercised </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>Expired </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>December 31, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center>CAN $ </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=center>$1.90 </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=left>February 25, 2014 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>1,068,270 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>(535,770</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>532,500 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center>$1.51 </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>February 25, 2014 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>131,792 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>(106,500</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>25,292 </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=center>$1.90 </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=left>February 26, 2014 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>522,207 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>(60,065</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>462,142 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center>$2.05 </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>February 26, 2014 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>315,787 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>3,329,168 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>(1,350,509</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>2,294,446 </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=center>$3.60 </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=left>October 7, 2011 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>3,076,250 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>(135,100</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>2,941,150 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center>$3.00 </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>October 7, 2011 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>266,769 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>(169,276</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>97,493 </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=center>$3.60 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=left>October 26, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>649,914 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>(160,797</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>489,117 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%"
      align=right>6,030,989 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%"
      align=right>3,329,168 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%"
      align=right>(2,518,017</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%"
      align=right>6,842,140 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN-LEFT: 5%" align=justify>The warrants with an expiry date of
February 26, 2014 consisting of agents warrants issued for placing debentures
and warrants issued on conversion of debentures are eligible to be exercised
&#147;cashless&#148; in which event no payment of the exercise price is required and the
holder receives the number of shares based upon the intrinsic value of the
warrants over the five day trading average prior to exercise. For the year ended
December 31, 2010, 839,524 warrants (2009 - 122,207) were elected by the holder
to be exercised &#147;cashless&#148; resulting in 464,268 (2009 - 46,426) shares being
issued.</P>
<P style="MARGIN-LEFT: 5%" align=justify>At December 31, 2009, the Company had
outstanding warrants to purchase an aggregate 6,030,989 common shares as
follows: </P>
<DIV align=right>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="95%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=center>Exercise </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%" align=center>&nbsp;
    </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%"
      align=center>Oustanding at </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%" align=center>&nbsp;
    </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%" align=center>&nbsp;
    </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%" align=center>&nbsp;
    </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%"
      align=center>Oustanding at </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
  align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Price </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>Expiry Dates </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>December 31, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>Issued </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>Exercised </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>Expired </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>December 31, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center>CAN $ </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=center>$5.50 </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=left>May 30, 2009 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>250,000 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>(250,000</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center>$4.65 </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>January 8, 2009 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>60,000 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>(60,000</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=center>$1.51 </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=left>February 25, 2014 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>131,792 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>131,792 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center>$1.90 </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>February 25, 2014 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>1,155,770 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>(87,500</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>1,068,270 </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=center>$1.90 </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=left>February 26, 2014 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>644,414 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>(122,207</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>522,207 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center>$2.05 </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>February 26, 2014 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>353,155 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>(37,368</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>315,787 </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=center>$3.60 </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=left>October 7, 2011 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>3,076,250 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>3,076,250 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center>$3.00 </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>October 7, 2011 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>369,150 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>(102,381</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>266,769 </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=center>$3.60 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=left>October 26, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>649,914 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>649,914 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%"
      align=right>441,792 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%"
      align=right>6,248,653 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%"
      align=right>(349,456</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%"
      align=right>(310,000</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%"
      align=right>6,030,989 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN-LEFT: 5%" align=justify>At December 31, 2008, the Company had
outstanding warrants to purchase an aggregate 441,792 common shares as
follows:</P>
<DIV align=right>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="95%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=center>Exercise </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%" align=center>&nbsp;
    </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%"
      align=center>Oustanding at </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%" align=center>&nbsp;
    </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%" align=center>&nbsp;
    </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%" align=center>&nbsp;
    </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="11%"
      align=center>Oustanding at </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
  align=center>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>Price </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>Expiry Dates </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>December 31, 2007 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>Issued </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>Exercised </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>Expired </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=center>December 31, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center>CAN $ </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=center>$5.50 </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=left>May 30, 2009 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>250,000 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>250,000 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=center>$4.65 </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>January 8, 2009 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>60,000 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>60,000 </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=center>$1.51 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=left>February 25, 2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>131,792 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>131,792 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%"
      align=right>310,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%"
      align=right>131,792 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%"
      align=right>441,792 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD></TR></TABLE></DIV><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 23
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_24></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>14.</B> </TD>
    <TD width="95%" align=left><B><U>SUPPLEMENTAL DISCLOSURE WITH RESPECT TO
      CASH FLOWS</U></B> </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%" align=center><B>Year
      Ended</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%" align=center>Year
      Ended </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%" align=center>Year
      Ended </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>December 31, </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>December 31, </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=center>2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=center>2008
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Net changes in non-cash working capital </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Accounts receivable and prepaids </TD>
    <TD  width="1%" align=left><B>$</B></TD>
    <TD width="10%" align=right><B>&nbsp;(2,832</B></TD>
    <TD  width="2%" align=left><B>)</B> </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;(1,264</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;52 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Inventories </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>(4,951</B></TD>
    <TD bgColor=#e6efff  width="2%" align=left><B>)</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(2,043</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(662</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Due from related parties </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>25</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(124</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>109 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Accounts payable and accrued
      liabilities </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>4,343</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(217</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>991 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;
      &nbsp;Income taxes payable </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>2,715</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=right>545
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
    align=right>(781</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>&nbsp;(700</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;(3,103</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;(291</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Non-cash financing and investing
      activities: </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Reclamation included in mineral property,
      plant and equipment </TD>
    <TD  width="1%" align=left><B>$</B></TD>
    <TD width="10%" align=right><B>&nbsp;359</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;135 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;(264</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Fair value of exercised
      options allocated to share capital </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>3,020</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>533 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>46 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Fair value of shares issued under the share
      appreciation rights plan </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>532</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>21 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Fair value of agent warrants
      issued on financings </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>1,001 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>82 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Fair value of equity issued on acquisition of
      other mineral properties </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>2,358</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>200 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Fair value of share bonus
      included in accounts payable </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>108 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Fair value of exercised agent warrants
      allocated to share capital </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>356</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>236 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Exercise of convertible debentures </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>7,408</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>1,058 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Other cash disbursements: </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Interest paid on convertible
      debentures </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>989</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>794 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Interest paid on promissory note </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>39</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>40 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Monthly income tax instalments </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right><B>498</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>1,869 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>740 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 24
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_25></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>15.</B> </TD>
    <TD width="95%" align=left><B><U>SEGMENT DISCLOSURES</U></B>
</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The Company has identified both
Guanacevi and Guanajuato mines as segments.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="10%" align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="23%" colSpan=4 align=center><B>December 31, 2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="10%" align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>Corporate</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>Guanacevi</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>Guanajuato</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>Total</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Cash and cash equivalents </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;56,964 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;10,918 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;155 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;68,037 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Short term investments </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>20,009 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>20,009 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Marketable securities </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>81 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>81 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Notes receivable </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>3,551 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>3,551 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Accounts receivables and prepaids </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>1,540 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>5,284 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>3,475 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>10,299 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Inventories </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>10,609 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>2,362 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>12,971 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Due from related parties </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>218 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>218 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Long term deposits </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>235 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>406 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>137 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>778 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Redemption call option on debentures </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Mineral property, plant and equipment </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>54 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>58,631 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>13,794 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>72,479 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Revenue </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>55,676 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>30,834 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>86,510 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Cost of Sales </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>28,860 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>12,654 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>41,514 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Depreciation </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>69 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>7,387 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>7,991 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>15,447 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Earnings (loss) before taxes </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;(13,072</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;19,429 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;10,189 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>16,546 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="10%" align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="23%" colSpan=4 align=center><B>December 31, 2009</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="10%" align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>Corporate</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>Guanacevi</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>Guanjuato</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>Total</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Cash and cash equivalents </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;22,851 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;3,825 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;26 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;26,702 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Marketable securities </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>2,045 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>2,045 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Notes receivable </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>2,476 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>2,476 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Accounts receivables and prepaids </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>1,060 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>5,255 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>1,152 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>7,467 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Inventories </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>4,722 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>1,378 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>6,100 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Due to related parties </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>243 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>243 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Long term deposits </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>659 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>357 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>137 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>1,153 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Redemption call option on debentures </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>2,693 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>2,693 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Mineral property, plant and equipment </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>77 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>45,282 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>11,643 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>57,002 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Revenue </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>32,281 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>18,488 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>50,769 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Cost of Sales </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>20,255 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>9,223 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>29,478 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Depreciation </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>67 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>8,778 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>2,419 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>11,264 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Earnings (loss)
      before taxes </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;(7,927</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;3,247 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;6,847 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%" align=right>2,167
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 25
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_26></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>16.</B> </TD>
    <TD width="95%" align=left><B><U>INCOME TAXES</U></B> </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>On October 1, 2007, the Government of
Mexico enacted legislation which introduces certain tax reforms including a new
minimum flat tax effective January 1, 2008. The interpretation of the
legislation, planning and experience resulted in the Company assessing that the
future income tax of the projects and entities will be subject to the income tax
regime over the life of the projects.</P>
<P style="MARGIN-LEFT: 5%" align=justify>When circumstances cause a change in
management&#146;s judgment about the recoverability of future tax assets, the impact
of the change on the valuation allowance will be reflected in current income.
</P>
<P style="MARGIN-LEFT: 5%" align=justify>The reconciliation of the income tax
provision computed at statutory rates to the reported income tax provision is as
follows: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%"
      align=center><B>December 31,</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%"
      align=center>December 31, </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%"
      align=center>December 31, </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=center>2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=center>2008
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Canadian statutory tax rates </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>28.50%</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>30.00% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>31.00% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Income tax charge/(benefit) computed at
      Canadian statutory rates </TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="10%" align=right><B>&nbsp;4,716</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;650 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;(5,263</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Foreign tax rates different from statutory rate </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>393</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>542 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>838 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Stock-based compensation </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>1,334</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>540 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>728 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Redemption call option on convertible debentures </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>(200</B></TD>
    <TD  width="2%" align=left><B>)</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(808</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Change in Mexico tax regime estimate </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>1,332 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Change in valuation allowance </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>2,303</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>1,673 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>1,706 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Other </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>921</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>1,496 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>1,660 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Tax provision </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right><B>&nbsp;9,467</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;4,093 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;1,001 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The tax effect of the temporary
differences that gives rise to future tax as at December 31, 2010 and 2009 for
Mexico subsidiaries is presented below: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="12%"
      align=center><B>December 31,</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="12%"
      align=center>December 31, </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Mexico operations
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=center><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center>2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Future income tax assets: </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Tax loss carryforwards </TD>
    <TD  width="1%" align=left><B>$</B></TD>
    <TD width="12%" align=right><B>&nbsp;80</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;1,365 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Other </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1,437 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Future income tax liabilities: </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Mineral properties, plant and
      equipment </TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="12%" align=right><B>&nbsp;(11,552</B></TD>
    <TD bgColor=#e6efff  width="2%" align=left><B>)</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(8,781</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;Other
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;(2,685</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;(2,124</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Future income tax liabilities, net </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;(14,157</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(8,103</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>As at December 31, 2010, the Company
had available for deduction against future taxable income in Mexico non-capital
losses of approximately $286 (2009 &#150; $4,640). These losses, if unutilized,
expire in 2019.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 26
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>16.</B> </TD>
    <TD>
      <P align=justify><B><U>INCOME TAXES </U></B>(continued)</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The tax effect of the temporary differences that gives
      rise to future tax assets as at December 31, 2010 and December 31, 2009
      for Canadian operations is presented below:</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="12%"
      align=center><B>December 31,</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="12%"
      align=center>December 31, </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Canada operations
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=center><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=center>2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Future income tax assets: </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Tax loss carryforwards </TD>
    <TD  width="1%" align=left><B>$</B></TD>
    <TD width="12%" align=right><B>&nbsp;9,146</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;6,449 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Mineral properties, plant and
      equipment </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right><B>669</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>588 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;Other
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>273</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>257
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Total future income tax assets </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right><B>10,088</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>7,294 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Valuation
      allowance </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>(10,088</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(7,294</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Future income tax assets, net </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>As at December 31, 2009, the Company
had available for deduction against future taxable income in Canada non-capital
losses of approximately CAN $30,829 (2009 &#150; CAN $22,208). These losses, if
unutilized, have expiration years ranging from 2011 to 2029. </P>
<P style="MARGIN-LEFT: 5%" align=justify>Minera Santa Cruz y Garibaldi SA de
CV&#146;s, a subsidiary of Endeavour, received a $19.1 million assessment on October
12<SUP>th</SUP>, 2010 by Mexican fiscal authorities for failure to provide the
appropriate support for certain expense deductions in the 2006 tax return.
During the audit process the Company retained a big four accounting firm and
external counsel to expedite the audit process and to ensure the delivery of the
appropriate documentation. Based on the advice of our tax advisors and legal
counsel, it is the Company&#146;s view that it provided the appropriate documentation
and support for the expenses and the tax assessment has no legal merit. As a
result of a detailed review by the Company of its accounting records and
available information to support the deductions taken, the Company has estimated
a potential tax exposure of $80, plus an additional interest and penalties of
$80, for which the Company has made a provision in the consolidated financial
statements for the period ended December 31, 2010. The Company has commenced the
appeal process. </P>
<P style="MARGIN-LEFT: 5%" align=justify>The 2006 tax return of Refinadora Plata
Guancevi SA de CV, a subsidiary of Endeavour, is currently being audited by the
Mexican fiscal authorities. The Company was delayed in providing certain
requested documentation and the Mexican fiscal authorities froze the
subsidiary&#146;s bank accounts. In consulting with external legal counsel, the
Company appealed the actions taken by the Mexican tax authorities through the
federal circuit court which ruled that the bank freeze was unconstitutional.
After the ruling, the court instructed the Mexican authorities to unfreeze the
bank accounts, which occurred shortly after year end.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The bank freeze did not affect the
Company&#146;s ability to carry on business, however the Company did not have access
to $1.8 million during that time and the Mexican fiscal authorities&#146; actions
impacted the timely refund of value added tax. During the audit process the
Company retained external legal counsel to ensure the delivery of the
appropriate documentation to the Mexican fiscal authorities. As a result of a
detailed review of the Company&#146;s 2006 financial information and delivery of
appropriate requested documents to the Mexican fiscal authorities, the Company
has estimated that there is no significant remaining potential tax exposure.
</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 27
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>17.</B> </TD>
    <TD width="95%" align=left><B><U>FINANCIAL INSTRUMENTS</U></B>
  </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>(a) Financial Assets and Liabilities
</P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company&#146;s financial instruments
consist of cash and cash equivalents, short term investments, marketable
securities receivables, notes receivable, accounts payable, accrued liabilities,
and a promissory note payable. Cash and cash equivalents and short term
investments are designated as held for trading and therefore carried at fair
value, with the unrealized gain or loss recorded in income. Receivables are
designated as loan receivables and accounts payables, accrued liabilities, and
promissory note are designated as other financial liabilities and recorded at
amortized cost. Marketable securities and notes receivable are designated as
available for sale with the unrealized gain or loss recorded in other
comprehensive income. Interest income and expense are both recorded in
income.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The fair value hierarchy establishes
three levels to classify inputs to the valuation techniques used to measure fair
value. Level 1 inputs are quoted market prices (unadjusted) in active markets
for identical assets or liabilities. Level 2 inputs are inputs other than quoted
market prices included in Level 1 that are observable for the asset or
liability, either directly or indirectly. Level 3 inputs are unobservable
(supported by little or no market activity). </P>
<P style="MARGIN-LEFT: 5%" align=justify>Cash and cash equivalents and short
term investments are stated at fair value and are classified as Level 1 of the
fair value hierarchy. The fair values of accounts receivables, accounts payable,
accrued liabilities are approximate carrying value because of the short term
nature of these instruments.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The fair value of available for sale
marketable securities and notes receivable are determined based on a market
approach reflecting the closing price of each particular security at the closing
balance sheet date. The closing price is a quoted market price obtained from the
exchange that is the principal active market for the particular security, and
therefore available for sale securities and are classified within Level 1 of the
fair value hierarchy. </P>
<P style="MARGIN-LEFT: 5%" align=justify>In the prior years, the fair value of
the notes receivable was determined by discounting the stream of future payments
at the estimated prevailing market rates and were classified within Level 2 as
of December 31, 2009. Prior to the successful restructuring of the asset backed
commercial paper (&#147;ABCP&#148;) in January 2009, the ABCP inputs were unobservable and
therefore classified as Level 3 of the fair value hierarchy.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company had issued convertible
debentures which were outstanding until September 2010 and which were designated
as other financial liabilities and recorded at amortized cost. The fair values
of the convertible debentures were determined as described in Note 12 and were
classified within Level 2.</P>
<P style="MARGIN-LEFT: 5%" align=justify>(b) Financial Instrument Risk Exposure
and Risk Management </P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company is exposed in varying
degrees to a variety of financial instrument related risks. The Board approves
and monitors the risk management process. The types of risk exposure and the way
in which such exposure is managed is provided as follows: </P>
<P style="MARGIN-LEFT: 5%" align=justify><U>Credit Risk</U> </P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company is exposed to credit risk
on its bank accounts, short term investments, notes receivable and value added
tax receivable balance. Credit risk exposure on bank accounts and short term
investments is limited through maintaining the Company&#146;s balances with
high-credit quality financial institutions, maintaining investment policies,
assessing institutional exposure and continual discussion with external
advisors. The notes receivable credit risk exposure is limited by continual
discussion with external advisors. Value added tax receivables are generated on
the purchase of supplies and services to produce silver which are refundable
from the Mexican government.</P>
<P style="MARGIN-LEFT: 5%" align=justify><U>Liquidity Risk</U> </P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company ensures that there is
sufficient capital in order to meet short term business requirements.. The
Company&#146;s policy is to invest cash at floating rates of interest, while cash
reserves are to be maintained in cash equivalents in order to maintain liquidity
after taking into account the Company&#146;s holdings of cash equivalents, short term
investments, marketable securities and receivables. The Company believes that
these sources, operating cash flow and its policies will be sufficient to cover
the likely short term cash requirements and commitments.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 28
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><B><U>FINANCIAL INSTRUMENTS
</U></B>(continued) </P>
<P style="MARGIN-LEFT: 5%" align=justify><U>Market Risk</U> </P>
<P style="MARGIN-LEFT: 5%" align=justify>The significant market risk exposures
to which the Company is exposed are foreign exchange risk, interest risk, and
commodity price risk.</P>
<P style="MARGIN-LEFT: 5%" align=justify><I>Foreign Currency Risk &#150; </I>The
Company&#146;s operations in Mexico and Canada make it subject to foreign currency
fluctuations. Certain of the Company&#146;s operating expenses are incurred in
Mexican pesos and Canadian dollars, therefore the fluctuation of the U.S. dollar
in relation to these currencies will consequently have an impact upon the
profitability of the Company and may also affect the value of the Company&#146;s
assets and the amount of shareholders&#146; equity. The Company&#146;s convertible
debentures were issued in Canadian dollars and related interest expense was
incurred in Canadian dollars. The Company has not entered into any agreements or
purchased any instruments to hedge possible currency risks. </P>
<P style="MARGIN-LEFT: 5%" align=justify>The U.S. dollar equivalents of
financial assets and liabilities denominated in currencies other than the US
dollar as at December 31 are as follows:</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="23%" colSpan=4
      align=center><B>December 31, 2010</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="23%" colSpan=4
      align=center>December 31, 2009 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>Canadian Dollar</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>Mexican Peso</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center>Canadian Dollar </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center>Mexican Peso </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Financial Assets </TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="10%" align=right><B>&nbsp;59,317</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="10%" align=right><B>&nbsp;18,346</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;24,025 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;7,582 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Financial
      Liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>(1,304</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>(6,640</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
    align=right>(9,228</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
    align=right>(2,946</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Net Financial Assets </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right><B>&nbsp;58,013</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right><B>&nbsp;11,706</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;14,797 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;4,636 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Of the financial assets listed above,
$34,309 (2009 &#150; $19,203) represents cash and cash equivalents held in Canadian
dollars, and $9,949 (2009 - $2,426) represents cash held in Mexican Pesos. The
remaining cash balance is held in U.S. dollars. The short term investments and
ABCP notes are denominated in Canadian dollars.</P>
<P style="MARGIN-LEFT: 5%" align=justify>As at December 31, 2010, with other
variables unchanged, a 5% strengthening of the US dollar against the Canadian
dollar would decrease net earnings by $2.8 million due to these financial assets
and liabilities.</P>
<P style="MARGIN-LEFT: 5%" align=justify>As at December 31, 2010, with other
variables unchanged, a 5% strengthening of the US dollar against the Mexican
peso would decrease net earnings by $0.6 million due to these financial assets
and liabilities.<I> </I></P>
<P style="MARGIN-LEFT: 5%" align=justify><I>Interest Rate Risk &#150;</I> In respect
of financial assets, the Company&#146;s policy is to invest cash at floating rates of
interest and cash reserves are to be maintained in cash equivalents in order to
maintain liquidity. Fluctuations in interest rates impact the value of cash
equivalents. </P>
<P style="MARGIN-LEFT: 5%" align=justify>With respect to financial liabilities
the promissory note is not subject to interest rate risk given the fixed rate of
10% per annum.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>18.</B> </TD>
    <TD width="95%" align=left><B><U>COMMITMENTS</U></B> </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The Company has operating lease
commitments for office space for $283 annually until 2017, totalling $1.8
million. Commitments relating to the Company&#146;s mineral properties are disclosed
in note 9.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 29
      - </TD></TR></TABLE><BR>
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width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>19.</B> </TD>
    <TD width="95%" align=left><B><U>RECONCILIATION WITH UNITED STATES
      GENERALLY ACCEPTED ACCOUNTING PRINCIPLES</U></B> </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Accounting practices under Canadian and United States
      generally accepted accounting principles (&#147;GAAP&#148;), as they affect the
      Company, are substantially the same, except for the following measurement
      differences.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>(a)</B> </TD>
    <TD>
      <P align=justify><B>Stock-based compensation</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Under U.S. GAAP, all share based payments to employees,
      including grants of employee stock options, are recognized in the income
      statement based on their fair values. The Company currently uses the fair
      value method to account for all stock option grants. For the years
      presented, there are no differences in stock-based compensation, with the
      exceptions noted below.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Stock options issued to employees of foreign operations,
      with an exercise price denominated in a currency other than the US dollar,
      the Company&#146;s functional currency, or the local currency of the foreign
      operation, are to be classified as liabilities and fair valued each
      period.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>For the year ended December 31, 2010, the additional
      effect of accounting for these stock options as a derivative liability
      reduces net earnings by $3,572 (2009 - $2,119), increases equity by $1,514
      (2009 &#150; decrease of $610) and increases the derivative liability by
      $2,058. The option derivative liability as of December 31, 2010 is $4,787
      (2009 - $2,729).</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Under U.S. GAAP, stock-based compensation of $3,523, $700
      and $456 would be presented within general and administrative costs, cost
      of sales and exploration expense, respectively, in 2010, whereas the
      stock-based compensation expense is reported separately for Canadian GAAP
      (2009 - $1,238, $425 and $138, 2008 - $1,696, $586 and $67).</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The total intrinsic value of options exercised during the
      year ended December 31, 2010 was $3,929 (2009 &#150; $425, 2008 - $185). The
      total intrinsic value and weighted average contractual term of vested
      options at December 31, 2010 is $15,375 and 3.1 years, respectively, (2009
      - $3,206 and 2 years).</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>(b)</B> </TD>
    <TD>
      <P align=justify><B>Convertible Debentures</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Under Canadian GAAP, the liability and equity components
      of the convertible debentures are determined and separately classified on
      the consolidated balance sheets. The liability component represents the
      present value of the holders&#146; conversion features at inception, while
      financing charges attributable to the liability component of the
      convertible debentures are included in the carrying value.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Under U.S. GAAP, a value is assigned to the conversion
      feature on the convertible debentures only if the effective conversion
      rate is less than the market price of the common stock at the date of
      issuance. Accordingly, in 2009, for U.S. GAAP purposes, the convertible
      debentures were presented on the consolidated balance sheet as a
      liability, an increase of $2,164.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In accordance with US GAAP, the convertible debentures
      underlying unit is denominated in a currency other than the Company&#146;s
      functional currency and is not considered to be indexed to the Company&#146;s
      own stock. Therefore, the conversion feature was separated from the host
      contract and accounted for as a derivative instrument.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>As a result, for US GAAP purposes as at February 26, 2009
      (after the adjustments above), the debenture liability decreased by
      $6,614, and a derivative liability for the corresponding amount was
      recorded. For the year ended December 31, 2010, for US GAAP purposes a
      mark to market gain of $1,538 was recognized offset by $543 increase in
      accretion expense, while the derivative liability was $nil (December 31,
      2009 - $21,926) as $20,388 was allocated to equity on conversion of the
      debentures. The convertible debenture liability was $nil as $4,562 was
      allocated to equity on conversion of the convertible debentures.The
      adjustment to gain on redemption call option decreases net income by
      $703.</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 30
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><B><U>RECONCILIATION WITH UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES </U></B><U>(continued)</U> </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>(c)</B> </TD>
    <TD>
      <P align=justify><B>Warrants</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Under Canadian GAAP, outstanding share purchase warrants
      are classified and accounted for as share capital. Effective January 1,
      2009, for U.S. GAAP purposes, the Company adopted a new accounting
      interpretation which addresses the determination of whether an equity
      linked financial instrument or embedded feature that has all of the
      characteristics of a derivative under other authoritative U.S. GAAP
      accounting literature is indexed to an entity&#146;s own stock and would
      therefore not be accounted for as derivative instrument.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company&#146;s share purchase warrants have an exercise
      price denominated in a currency other than the Company&#146;s functional
      currency and are not considered to be indexed to the Company&#146;s own stock.
      Accordingly, for US GAAP purposes, the warrants are classified and
      accounted for as a financial liability at their fair value with changes in
      fair value being included in net earnings.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The new accounting guidance was applied to warrants
      outstanding as of January 1, 2009 with the cumulative effect on adoption
      of $nil and $4,213 was allocated from equity to derivative liability on
      issuance of warrants in 2009. For the year ended December 31, 2010, the
      mark to market loss under US GAAP was $25,589 (2009 &#150; $6,042), while
      $7,517 (2009 - $585) was allocated from equity to derivative liability on
      warrants granted on debenture conversions and $5,834 was allocated to
      equity on exercise of these warrants. The total fair value of the
      derivative liability for warrants denominated in a currency other than the
      Company&#146;s functional currency is $32,639 as at December 31, 2010 (2009 &#150;
      $10,255).</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The publicly traded warrants and warrants with similar
      characteristics were valued based on the quoted market value of these
      warrants as of December 31, 2010 and are classified in Level 1 of the fair
      value hierarchy. The non-publicly traded warrants have been valued using
      the Black-Scholes valuation model and are classified in Level 2 of the
      fair value hierarchy.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>(d)</B> </TD>
    <TD>
      <P align=justify><B>Mineral property exploration</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>U.S. GAAP requires that long lived assets be reviewed for
      impairment whenever events or changes in circumstances indicate that the
      carrying amount of an asset may not be recoverable. In performing the
      review of recoverability, the Company is to estimate the future cash flows
      expected to result from the use of the asset and its eventual disposition.
      If the sum of the expected future cash flows (undiscounted and without
      interest charges) is less than the carrying amount of the asset, an
      impairment loss is recognized. The Securities and Exchange Commission
      (&#147;SEC&#148;) staff has indicated that their interpretation of U.S. GAAP
      requires mineral property exploration costs to be expensed as incurred
      until commercially mineable deposits are determined to exist within a
      particular property, as cash flows cannot be reasonably estimated prior to
      such determination. Accordingly, for all periods presented, the Company
      would expense all mineral property exploration costs for U.S. GAAP
      purposes, which is consistent with the Canadian GAAP
  treatment.</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 31
      - </TD></TR></TABLE><BR>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
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  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><B><U>RECONCILIATION WITH UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES </U></B><U>(continued)</U><B> </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>(e)</B> </TD>
    <TD width="95%" align=left><B>The effect of the above on the financial
      statements for the year ended December 31 is as follows:</B>
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%"
      align=center><B>December 31,</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%"
      align=center>December 31, </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%"
      align=center>December 31, </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Statement of
      Operations</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=center>2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=center>2008
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Net income (loss) per Canadian GAAP </TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="10%" align=right><B>&nbsp;7,079</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;(1,926</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;(18,004</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Mark-to-market loss on foreign issued
      options </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>(2,512</B></TD>
    <TD bgColor=#e6efff  width="2%" align=left><B>)</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(2,119</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Mark-to-market gain (loss) on convertible debentures </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>1,538</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(16,271</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Mark-to-market gain (loss) on warrants with
      a foreign currency </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>(25,589</B></TD>
    <TD bgColor=#e6efff  width="2%" align=left><B>)</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(6,042</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Accretion convertible debentures </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>(543</B></TD>
    <TD  width="2%" align=left><B>)</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>360 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Foreign exchange loss on convertible
      debentures </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(327</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Redemption option
      gain </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>(703</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
    align=right>(2,693</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Net loss per US GAAP </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right><B>&nbsp;(20,730</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;(29,018</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;(18,004</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Net comprehensive
      loss per U.S. GAAP </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right><B>&nbsp;(19,823</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;(28,481</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;(18,512</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>) </TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Basic and diluted loss per share per U.S. GAAP </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right><B>&nbsp;(0.32</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;(0.55</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;(0.37</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="12%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="10%"
    align=center><STRONG>December 31,</STRONG></TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%"
      align=center>December 31, </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Balance
      Sheets</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%" align=center>2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Assets per Canadian GAAP </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%"
    align=left><STRONG>$</STRONG></TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;<STRONG>188,423</STRONG>
    </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;105,881 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Adjustments related to: </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Convertible debentures redemption call option </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=center>19 (b) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>(2,693</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Assets per U.S.
      GAAP </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right><STRONG>188,423</STRONG> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;103,188 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Liabilities per Canadian GAAP </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left><B>$</B></TD>
    <TD width="10%" align=right><B>29,410</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;24,500 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Adjustments related to: </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp;Foreign issued options derivative liability </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>19 (a) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>4,787</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>2,729 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;Convertible debentures </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>19 (b) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>327 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp;Accretion of bifurcated convertible debentures </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>19 (b) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>-</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(360</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;Equity portion of convertible
      debentures </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>19 (b) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>2,164 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp;Convertible debentures embedded derivative liability
    </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>19 (b) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>-</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>15,312 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Warrants foreign currency derivative liability </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=center>19 (c) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right><B>32,639</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="10%"
    align=right>10,255 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Liabilities per
      U.S. GAAP </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;<STRONG>66,836</STRONG> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
      align=right>&nbsp;54,927 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Shareholders' equity per Canadian GAAP </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left><STRONG>$</STRONG></TD>
    <TD width="10%" align=right>&nbsp;<STRONG>159,013</STRONG> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;81,381 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>Adjustments related to </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp;Foreign issued options derivative liability on
      exercise </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>19 (a) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>(156</B></TD>
    <TD  width="2%" align=left><B>)</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(610</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;Equity portion of convertible
      debentures </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>19 (b) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(2,164</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp;Mark to market conversion of convertible debentures
    </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center>19 (b) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right><B>18,639</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>959 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;Warrants foreign currency derivative
      liability </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=center>19 (c) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right><B>(1,008</B></TD>
    <TD bgColor=#e6efff  width="2%" align=left><B>)</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(4,213</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Accumulated
      statement of opeartion effect </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right><B>(54,901</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=right>(27,092</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Shareholders' equity per U.S. GAAP </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;<STRONG>121,587</STRONG> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="10%"
    align=right>&nbsp;48,261 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 32
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><B><U>RECONCILIATION WITH UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES </U></B><U>(continued)</U><B> </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>(f)</B> </TD>
    <TD>
      <P align=justify><B>Accounting for uncertainty in income
  taxes</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In June 2006, The FASB has issued FASB Interpretation No.
      48, &#147;<I>Accounting for Uncertainty in Income Taxes &#150; an interpretation of
      FASB Statement No. 109&#148; </I>(&#147;FIN 48&#148;). FIN 48 prescribes a recognition
      threshold and measurement attribute for the financial statement
      recognition and measurement of a tax position taken or expected to be
      taken in a tax return. The Interpretation also provides guidance on
      derecognition, classification, interest and penalties, accounting in
      interim periods, disclosure, and transition. FIN 48 is effective for
      fiscal years beginning after December 15, 2006. The provisions of FIN 48
      are to be applied to all tax positions upon initial adoption, with the
      cumulative effect adjustment reported as an adjustment to the opening
      balance of retained earnings. The Company did not have any unrecognized
      tax benefits at January 1, 2007. In addition, no adjustments were
      recognized for uncertain tax benefits during 2009. There was no impact on
      the Company&#146;s December 31, 2010 consolidated financial statements.
      Interest and penalties, if any, are recognized in general and
      administration expenses in the statement of operations.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company files income tax returns in Canada and
      Mexico. Years ranging from 2004 through 2010, as applicable, are subject
      to examination by the taxing authorities in the respective jurisdictions
      where returns are filed.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>(g)</B> </TD>
    <TD>
      <P align=justify><B>Impact of recent United States accounting
      pronouncements:</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The FASB has amended standards related to variable
      interest entities and financial assets. The standards eliminate the
      concept of a qualifying special purpose entity, establish new criteria for
      consolidation of variable interest rate entities, and create more
      stringent conditions for the treatment of transfers of financial assets.
      The statements were effective for the Company on January 1, 2010. The
      adoption of this standard had no effect on the consolidated financial
      statements.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The FASB has amended standards related to stock-based
      compensation. The amendments clarify that a share-based payment award with
      an exercise price denominated in the currency of a market in which a
      substantial portion of the entity&#146;s equity securities trades should not be
      considered to contain a condition that is not a market, performance or
      service condition. Therefore, such an award should not be classified as a
      liability if it otherwise qualifies as equity. The amendments are
      effective for fiscal years beginning on or after December 15, 2010, with
      early adoption permitted.</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 33
      - </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to the Consolidated Financial Statements</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Year ended December 31, 2010, December 31, 2009 and
      December 31, 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left>(expressed in thousands of U.S. dollars, unless otherwise
      stated) </TD></TR></TABLE><BR>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD align=left ><B>HEAD OFFICE</B> </TD>
    <TD colSpan=2 align=left>#301 &#150; 700 West Pender Street </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>Vancouver, BC, Canada V6C 1G8 </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD width="15%" align=left >Telephone: </TD>
    <TD width="50%" align=left>(604) 685-9775 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left >&nbsp; </TD>
    <TD width="50%" align=left>1-877-685-9775 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left >Facsimile: </TD>
    <TD width="50%" align=left>(604) 685-9744 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left >Website: </TD>
    <TD width="50%" align=left>www.edrsilver.com </TD>
  </TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD >&nbsp; </TD>
    <TD width="50%">&nbsp; </TD>
  </TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD >&nbsp; </TD>
    <TD width="50%">&nbsp; </TD>
  </TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD >&nbsp; </TD>
    <TD width="50%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left ><B>DIRECTORS</B> </TD>
    <TD colSpan=2 align=left>Bradford Cooke </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>Godfrey Walton </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>Leonard Harris </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>Mario Szotlender </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>Geoff Handley </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>Rex McLennan </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>Ricardo Campoy </TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left ><B>OFFICERS</B> </TD>
    <TD colSpan=2 align=left>Bradford Cooke ~ Chairman and Chief
      Executive Officer </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>Godfrey Walton ~ President and Chief
      Operating Officer </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>Dan Dickson ~ Chief Financial Officer
    </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>Dave Howe ~ Vice-President, Mexico
      Operations </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>Barry Devlin ~ Vice-President,
      Exploration </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>Hugh Clarke ~ Vice-President,
      Corporate Communications </TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left ><B>REGISTRAR AND</B> </TD>
    <TD colSpan=2 align=left>Computershare Trust Company of Canada
    </TD></TR>
  <TR vAlign=top>
    <TD align=left ><B>TRANSFER AGENT</B> </TD>
    <TD colSpan=2 align=left>3<SUP>rd </SUP>Floor - 510 Burrard
      Street </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>Vancouver, BC, V6C 3B9 </TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left ><B>AUDITORS</B> </TD>
    <TD colSpan=2 align=left>KPMG LLP </TD></TR>
  <TR vAlign=bottom>
    <TD align=center >&nbsp;</TD>
    <TD colSpan=2 align=left>777 Dunsmuir Street
  </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>Vancouver, BC, V7Y 1K3 </TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left ><B>SOLICITORS</B> </TD>
    <TD colSpan=2 align=left>Koffman Kalef LLP </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>19<SUP>th </SUP>Floor &#150; 885 West
      Georgia Street </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>Vancouver, BC, V6C 3H4 </TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left ><B>SHARES LISTED</B> </TD>
    <TD colSpan=2 align=left>Toronto Stock Exchange </TD></TR>
  <TR vAlign=bottom>
    <TD align=center >&nbsp;</TD>
    <TD colSpan=2 align=left>Trading Symbol - EDR
  </TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD colSpan=2 align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>New York Stock Exchange </TD></TR>
  <TR vAlign=bottom>
    <TD align=center ></TD>
    <TD colSpan=2 align=left>Trading Symbol &#150; EXK
  </TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD colSpan=2 align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD colSpan=2 align=left>Frankfurt Stock Exchange </TD></TR>
  <TR vAlign=bottom>
    <TD align=center ></TD>
    <TD colSpan=2 align=left>Trading Symbol - EJD
  </TD></TR></TABLE></DIV><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left><B>Endeavour Silver
      Corp.</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=left>Page - 34
      - </TD></TR></TABLE><BR>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>4
<FILENAME>exhibit3.htm
<DESCRIPTION>MANAGEMENT'S DISCUSSION AND ANALYSIS
<TEXT>
<HTML>
<HEAD>
   <TITLE>Endeavour Silver Corp.: Exhibit 3 - Filed by newsfilecorp.com</TITLE>
   <META name="HandheldFriendly" content="true">
</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<!--$$/page=--><A name=page_1></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><U>PRELIMINARY INFORMATION</U> </B></P>
<P align=justify>The following Management&#146;s Discussion and Analysis (&#147;MD&amp;A&#148;)
of Endeavour Silver Corp. (the &#147;Company&#148; or &#147;Endeavour&#148;) should be read in
conjunction with the audited consolidated financial statements for the year
ended December 31, 2010 and the related notes contained therein. In addition,
the following should be read in conjunction with the Company&#146;s most recent
Annual Information Form, which has been filed with the Canadian Provincial
Securities Regulatory Authorities (*) and the most recent Form 40-F which has
been filed with the US Securities and Exchange Commission (the &#147;SEC&#148;). </P>
<P align=justify>All financial information in this MD&amp;A is prepared in
accordance with Canadian generally accepted accounting principles (&#147;CAD GAAP&#148;),
and all dollar amounts are expressed in US dollars unless otherwise indicated.
</P>
<P align=justify><B>Cautionary Note concerning Forward-Looking Statements:</B>
This MD&amp;A contains &#147;forward-looking statements&#148; within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and
&#147;forward-looking information&#148; within the meaning of applicable Canadian
securities legislation. Such forward-looking statements and information herein
include, but are not limited to, statements regarding Endeavour&#146;s anticipated
performance in 2011, including silver and gold production, timing and
expenditures to develop new silver mines and mineralized zones, silver and gold
grades and recoveries, cash costs per ounce, capital expenditures and sustaining
capital. The Company does not intend to, and does not assume any obligation to
update such forward-looking statements or information, other than as required by
applicable law. Forward-looking statements or information involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, level of activity, performance or achievements of the Company and its
operations to be materially different from those expressed or implied by such
statements. Such factors include, among others: fluctuations in the prices of
silver and gold, fluctuations in the currency markets (particularly the Mexican
peso, Canadian dollar and U.S. dollar); changes in national and local
governments, legislation, taxation, controls, regulations and political or
economic developments in Canada and Mexico; operating or technical difficulties
in mineral exploration, development and mining activities; risks and hazards of
mineral exploration, development and mining (including, but not limited to
environmental hazards, industrial accidents, unusual or unexpected geological
conditions, pressures, cave-ins and flooding); inadequate insurance, or
inability to obtain insurance; availability of and costs associated with mining
inputs and labour; the speculative nature of mineral exploration and
development, diminishing quantities or grades of mineral reserves as properties
are mined; the ability to successfully integrate acquisitions; risks in
obtaining necessary licenses and permits, and challenges to the company&#146;s title
to properties; as well as those factors described in the section &#147;risk factors&#148;
contained in the Company&#146;s Annual Information Form filed with the Canadian
securities regulatory authorities as filed with the SEC in our Annual Report on
Form 40-F. Although the Company has attempted to identify important factors that
could cause actual results to differ materially from those contained in
forward-looking statements or information, there may be other factors that cause
results to be materially different from those anticipated, described, estimated,
assessed or intended. There can be no assurance that any forward-looking
statements or information will prove to be accurate as actual results and future
events could differ materially from those anticipated in such statements or
information. Accordingly, readers should<I> </I>not place undue reliance on
forward-looking statements or information. </P>
<P align=justify><B>Cautionary Note to U.S. Investor&#146;s concerning Estimates of
Reserves and Measured, Indicated and Inferred Resources: </B>This MD&amp;A has
been prepared in accordance with the requirements of the securities laws in
effect in Canada, which differ from the requirements of United States securities
laws. The terms &#147;mineral reserve&#148;, &#147;proven mineral reserve&#148; and &#147;probable
mineral reserve&#148; are Canadian mining terms as defined in accordance with
Canadian National Instrument 43-101 &#150; Standards of Disclosure for Mineral
Projects (&#147;NI 43-101&#148;) and the Canadian Institute of Mining, Metallurgy and
Petroleum (the &#147;CIM&#148;) - <I>CIM Definition Standards on Mineral Resources and
Mineral Reserves</I>, adopted by the CIM Council, as amended. These definitions
differ from the definitions in SEC Industry Guide 7 under the United States
Securities Act of 1993, as amended (the &#147;Securities Act&#148;). Under SEC Industry
Guide 7 standards, a &#147;final&#148; or &#147;bankable&#148; feasibility study is required to
report reserves, the three-year historical average price is used in any reserve
or cash flow analysis to designate reserves and the primary environmental
analysis or report must be filed with the appropriate governmental authority.
</P>
<P align=center>1</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_2></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify>In addition, the terms &#147;mineral resource&#148;, &#147;measured mineral
resource&#148;, &#147;indicated mineral resource&#148; and &#147;inferred mineral resource&#148; are
defined in and required to be disclosed by NI 43-101; however, these terms are
not defined terms under SEC Industry Guide 7 and are normally not permitted to
be used in reports and registration statements filed with the SEC. Investors are
cautioned not to assume that any part or all of mineral deposits in these
categories will ever be converted into reserves. &#147;Inferred mineral resources&#148;
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 pre-feasibility studies, except in rare cases. Investors
are cautioned not to assume that all or any part of an inferred mineral resource
exists or is economically or legally mineable. Disclosure of &#147;contained ounces&#148;
in a resource is permitted disclosure under Canadian regulations; however, the
SEC normally only permits issuers to report mineralization that does not
constitute &#147;reserves&#148; by SEC Industry Guide 7 standards as in place tonnage and
grade without reference to unit measures. </P>
<P align=justify>Accordingly, information contained in this MD&amp;A contain
descriptions of our mineral deposits that may not be comparable to similar
information made public by U.S. companies subject to the reporting and
disclosure requirements under the United States federal securities laws and the
rules and regulations thereunder. </P>
<P align=justify><B>(*) available at the SEDAR website at www.sedar.com</B> </P>
<P align=justify><B><U>TABLE OF CONTENTS</U> </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><A
      href="#page_3"><B>1</B>
      </A></TD>
    <TD bgColor=#eeeeee width="85%" align=left ><A
      href="#page_3"><B>History
      and Strategy</B> </A></TD>
    <TD bgColor=#eeeeee width="10%" align=left><A
      href="#page_3"><B>Page</B>
      <B>3</B> </A></TD></TR>
  <TR vAlign=top>
    <TD align=left ><A
      href="#page_3"><B>2</B>
      </A></TD>
    <TD width="85%" align=left ><A
      href="#page_3"><B>Operating
      Performance</B> </A></TD>
    <TD width="10%" align=left><A
      href="#page_3"><B>Page</B>
      <B>3</B> </A></TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><A
      href="#page_12"><B>3.</B>
      </A></TD>
    <TD bgColor=#eeeeee width="85%" align=left ><A
      href="#page_12"><B>Reserves
      and Resources</B> </A></TD>
    <TD bgColor=#eeeeee width="10%" align=left><A
      href="#page_12"><B>Page</B>
      <B>12</B> </A></TD></TR>
  <TR vAlign=top>
    <TD align=left ><A
      href="#page_15"><B>4</B>
      </A></TD>
    <TD width="85%" align=left ><A
      href="#page_15"><B>Consolidated
      Financial Results</B> </A></TD>
    <TD width="10%" align=left><A
      href="#page_15"><B>Page</B>
      <B>15</B> </A></TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><A
      href="#page_21"><B>5</B>
      </A></TD>
    <TD bgColor=#eeeeee width="85%" align=left ><A
      href="#page_21"><B>Liquidity
      and Capital Resources</B> </A></TD>
    <TD bgColor=#eeeeee width="10%" align=left><A
      href="#page_21"><B>Page</B>
      <B>21</B> </A></TD></TR>
  <TR vAlign=top>
    <TD align=left ><A
      href="#page_27"><B>6</B>
      </A></TD>
    <TD width="85%" align=left ><A
      href="#page_27"><B>Annual
      Outlook</B> </A></TD>
    <TD width="10%" align=left><A
      href="#page_27"><B>Page</B>
      <B>27</B> </A></TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><A
      href="#page_28"><B>7</B>
      </A></TD>
    <TD bgColor=#eeeeee width="85%" align=left ><A
      href="#page_28"><B>Subsequent
      Events</B> </A></TD>
    <TD bgColor=#eeeeee width="10%" align=left><A
      href="#page_28"><B>Page</B>
      <B>28</B> </A></TD></TR>
  <TR vAlign=top>
    <TD align=left ><A
      href="#page_28"><B>8</B>
      </A></TD>
    <TD width="85%" align=left ><A
      href="#page_28"><B>Changes
      in Accounting Policies and Critical Accounting Estimates</B> </A></TD>
    <TD width="10%" align=left><A
      href="#page_28"><B>Page</B>
      <B>28</B> </A></TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><A
      href="#page_30"><B>9</B>
      </A></TD>
    <TD bgColor=#eeeeee width="85%" align=left ><A
      href="#page_30"><B>Risks
      and Uncertainties</B> </A></TD>
    <TD bgColor=#eeeeee width="10%" align=left><A
      href="#page_30"><B>Page</B>
      <B>30</B> </A></TD></TR>
  <TR vAlign=top>
    <TD align=left ><A
      href="#page_39"><B>10</B>
      </A></TD>
    <TD width="85%" align=left ><A
      href="#page_39"><B>Controls
      and Procedures</B> </A></TD>
    <TD width="10%" align=left><A
      href="#page_39"><B>Page</B>
      <B>39</B> </A></TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left ><A
      href="#page_40"><B>11</B>
      </A></TD>
    <TD bgColor=#eeeeee width="85%" align=left ><A
      href="#page_40"><B>International
      Financial Reporting Standards</B> </A></TD>
    <TD bgColor=#eeeeee width="10%" align=left><A
      href="#page_40"><B>Page</B>
      <B>40</B> </A></TD></TR></TABLE>
<P align=center>2</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><U>HISTORY AND STRATEGY</U> </B></P>
<P align=justify>The Company is engaged in the evaluation, acquisition,
exploration, development and exploitation of silver mining properties in
Mexico.</P>
<P align=justify>Historically, the business philosophy was to acquire and
explore early-stage mineral prospects in Canada and the United States. In 2002
the Company was re-organized, a new management team was appointed, and the
business strategy was revised to focus on acquiring advanced-stage silver mining
properties in Mexico. Mexico, despite its long and prolific history of metal
production, appeared to be relatively un-explored using modern exploration
techniques and offered promising geological potential for precious metals
exploration and production. </P>
<P align=justify>After evaluating several mineral properties in Mexico in 2003,
the Company negotiated an option to purchase the Guanacevi silver mines and
process plant located in Durango, Mexico in May 2004. Management recognized that
even though the mines had run out of ore, little modern exploration had been
carried out to discover new silver ore-bodies. Exploration drilling commenced in
June 2004 and quickly met with encouraging results. By September 2004,
sufficient high grade silver mineralization had been outlined to justify the
development of an access ramp into the newly discovered North Porvenir ore-body.
In December 2004, the Company commenced the mining and processing of ore from
the new North Porvenir mine to produce silver dore bars.</P>
<P align=justify>In 2007, the Company replicated the success of Guanacevi with
the acquisition of the Guanajuato Mines project in Guanajuato State. Guanajuato
was very similar in that there was a fully built and permitted processing plant,
and the mines were running out of ore, so the operation was for sale. The
acquisition was finalized in May 2007 and as a result of the successful mine
rehabilitation and exploration work conducted in 2008 and 2009, silver
production, reserves and resources are growing rapidly and Guanajuato is now an
integral part of the Company&#146;s asset base. </P>
<P align=justify>Both Guanacevi and Guanajuato are good examples of Endeavour&#146;s
business model of acquiring fully built and permitted silver mines that were
about to close for lack of ore. By bringing the money and expertise needed to
find new silver ore-bodies, Endeavour has successfully re-opened and is now
expanding these mines to unfold their full potential. The benefit of acquiring
fully built and permitted mining and milling infrastructure is that if new
exploration efforts are successful, the mine development cycle from discovery to
production only takes a matter of months instead of the several years normally
required in the traditional mining business model. </P>
<P align=justify>The Company historically funded its exploration and development
activities through equity financings and convertible debentures. Equity
financings also facilitated the acquisition and development of the Guanacevi and
Guanajuato Mines projects. However, since 2004, the Company has been able to
finance more and more of its acquisition, exploration, development and operating
activities from production cash flows. The Company may continue to engage in
equity, debt, convertible debt or other financings, on an as needed basis, in
order to facilitate its growth. </P>
<P align=justify><B><U>OPERATING PERFORMANCE</U> <BR><I>2010
Financial Highlights (compared to 2009) </I></B></P>
<UL style="TEXT-ALIGN: justify">
  <LI>Net earnings of $7.1 million ($0.11 per share) compared to a net loss of
  $1.9 million (-$0.04 per share)
  <LI>EBITDA rose 122% to $33.1 million
  <LI>Mine operating cash-flow increased 111% to $45.0 million
  <LI>Operating cash-flow jumped 167% to $32.7 million
  <LI>Revenues climbed 70% to $86.5 million
  <LI>Realized silver price up 27% to $19.62 per ounce sold
  <LI>Cash operating costs decreased 5% to $5.71 per oz silver payable (net of
  gold credits)
  <LI>Became debt free with conversion of $10.1 million debenture into 5.3
  million units
  <LI>Year end Working capital of $102.2 million and cash and short term
  investments totalled $88.0 million </LI></UL>
<P align=center>3</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><I>2010 Production Highlights (compared to 2009)
</I></B></P>
<UL style="TEXT-ALIGN: justify">
  <LI>Silver production climbed 26% to 3,285,634 oz
  <LI>Gold production increased 33% to 17,713 oz
  <LI>Silver-equivalent production rose 20% to 4.2 million oz (50:1 silver:gold
  ratio and no base metals)
  <LI>Completed plant expansion and ramped up mine production to 1,000 tonnes
  per day at Guanacevi
  <LI>Commenced the Lucero South mine ramp at Guanajuato in order to facilitate
  the 2011 mine and plant expansion to 1,000 tonnes per day </LI></UL>
<P align=justify><B><I>2010 Fourth Quarter Financial Highlights (compared to Q4,
2009) </I></B></P>
<UL style="TEXT-ALIGN: justify">
  <LI>Net earnings of $5.6 million ($0.09 per share) compared to $3.1 million
  ($0.06 per share)
  <LI>EBITDA rose 19% to $14.6 million
  <LI>Mine operating cash-flow increased 35% to $17.2 million
  <LI>Operating cash-flow jumped 107% to $21.5 million
  <LI>Revenues climbed 17% to $28.5 million
  <LI>Realized silver price up 35% to $24.16 per silver ounce sold
  <LI>Cash costs decreased 5% to $4.72 per oz silver payable (net of gold
  credits) </LI></UL>
<P align=justify><B><I>2010 Fourth Quarter Production Highlights (compared to
Q4, 2009) </I></B></P>
<UL style="TEXT-ALIGN: justify">
  <LI>Silver production climbed 15% to 895,931 oz
  <LI>Gold production increased 6% to 4,871 oz
  <LI>Silver-equivalent production rose 13% to 1.14 million oz (50:1 silver:gold
  ratio and no base metals)
  <LI>Completed plant expansion to increase capacity to 1,000 tonnes per day at
  Guanacevi
  <LI>Obtained Board approval to expand the Guanajuato operations to 1,000
  tonnes per day </LI></UL>
<P align=justify><B><I>2010 Exploration Highlights </I></B></P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>Reserves dipped by year end to 13.4 million due to accelerated mine
  production exceeding the 2010 forecast and mine development falling behind
  schedule </P>
  <LI>
  <P>Indicated resources rose 16% to 27.4 million oz silver and Inferred
  resources increased 62% to 29.7 million oz silver </P>
  <LI>
  <P>Drilled over 41,000 meters in the 148 drill holes testing multiple
  exploration targets in five separate mining districts to make new discoveries
  and expand silver resources </P>
  <LI>
  <P>Drilled 7,000 meters in 23 holes in the San Pedro area of Guanacevi
  resulting in two exciting new discoveries, Epsilon and La Blanca and expanded
  the Company&#146;s land position at Guanacevi with the addition of 3 properties
  totalling 25 hectares </P>
  <LI>
  <P>Drilled 18,000 meters in 61 holes in the Guanajuato district identifying
  three significant new veins, the Karina, Fernanda and Daniela veins, and
  expanded the Company&#146;s lan<B>d </B>position at Guanajuato with the addition of
  4 properties totalling 243 hectares </P>
  <LI>
  <P>Drilled 10,000 meters in 34 holes at the San Juanico property in the Parral
  district to expand the NI 43-101 indicated resources to 1.63 million tonnes
  containing 2.6 million oz silver and inferred resources to 1.30 million tonnes
  containing 2.7 million ounces plus significant gold, lead and zinc resources.
  </P></LI></UL>
<P align=center>4</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_5></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><I>Consolidated Production Results </I></B></P>
<P align=justify><B><I>2010 compared to 2009 </I></B></P>
<P align=justify>In 2010, Endeavour achieved two important milestones in its
silver mining operations: the Company recorded its sixth consecutive year of
growing silver production, up 26% to 3,285,634 ounces (oz) silver; and cash
costs declined for the third consecutive year, down 5% to $5.71 per oz silver.
</P>
<P align=justify>The higher silver production was due mainly to increased plant
throughput at both the Guanacevi and Guanajuato mines, with Guanacevi throughput
up by 35% and Guanajuato throughput up by 26%. Gold production increased by 33%
to 17,713 oz, also due to increased plant throughput. Plant throughput for 2010
was 507,010 tonnes at average grades of 267 grams per tonne (gpt) silver and
1.37 gpt gold as compared to 384,827 tonnes at average grades of 268 gpt silver
and 1.33 gpt gold for 2009. The higher throughput was due to expansions at both
operations. At Guanacevi, a plant expansion program completed during the year to
1,000 tonnes per day (tpd) allowed mine output to rise. At Guanajuato, the
increased throughput was due to the new cone crusher installed in late 2009 that
enabled increased production from Lucero and Bolanitos mines. </P>
<P align=justify>Consolidated silver grades were consistent with 2009 and gold
grades were 3% higher, reflecting minor variations in the ores at both Guanacevi
and Guanajuato. At Guanacevi, silver grades were slightly higher and gold grades
were 8% lower while Guanajuato silver grades were 5% lower but gold grades were
13% higher. Consolidated silver and gold recoveries were down slightly as a
result of mining more complex ores from Porvenir Dos at Guanacevi and mining
lower grade ores from the Lucero and Bolanitos mines at Guanajuato. Recent
metallurgical test work indicates that metal recoveries at both plants should
improve with a slightly finer grind. Plant operations are currently being
reviewed in order to engineer plan improvements to accomplish a finer grind.</P>
<P align=justify><B><I>Guanacevi Mines Production Results </I></B></P>
<P align=justify><B><I>2010 compared to 2009 </I></B></P>
<P align=justify>Silver production for 2010 was 2,448,946 oz, an increase of 31%
compared to 1,870,337 oz in 2009 and gold production was 6,036 oz, an increase
of 24% compared to 4,877 oz. Plant throughput was 312,087 tonnes at average
grades of 324 gpt silver and 0.74 gpt gold, as compared to 230,632 tonnes at
average grades of 322 gpt silver and 0.80 gpt gold in 2009. The increased silver
and gold production is attributable to the 35% increase in throughput offset by
slight variations in grades and recoveries. The plant expansion was completed in
the fourth quarter increasing daily capacity to 1,000 tpd. The expansion
included the commissioning of a new crushing circuit, refurbishing the fifth
ball mill, expanding the Merrill Crowe circuit with a new clarifer, acquiring
new filter presses and refurbishing the CCD circuit with new rakes and
gantries.</P>
<P align=justify>Silver grades increased by less than 1%, silver recoveries
decreased by 4% and gold grades were 8% lower with gold recoveries 3% lower,
reflecting differences in ore-types being processed. </P>
<P align=justify><B><I>Guanajuato Mines Production Results </I></B></P>
<P align=justify><B><I>2010 compared to 2009 </I></B></P>
<P align=justify>Silver production for 2010 was 836,688 ounces, an increase of
15% compared to 728,181 oz in 2009 and gold production was 11,675 oz, an
increase of 39% compared to 8,421 oz. Plant throughput was 194,923 tonnes at
average grades of 177 gpt silver and 2.39 gpt gold as compared to 154,195 tonnes
at average grades of 187 gpt silver and 2.13 gpt gold. The increased silver and
gold production is attributable to a 26% increase in throughput because the cone crusher installed in late 2009 allowed the mill to
operate at 600 tpd with slightly higher gold grades offset by lower silver
grades and lower recoveries. </P>
<P align=center>5</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_6></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify>Silver grades were 5% lower and gold grades were 13% higher in
2010 compared to 2009 and silver and gold recoveries were both 3% lower
primarily due to changes in ore-types being processed and processing more tonnes
through the plant.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" colSpan=9
      align=left><B><I>Comparative Table of Consolidated Mine Operations</I></B>
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><U>Period</U></B> </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="7%" align=center><B><U>Plant T'put</U></B> </TD>
    <TD width="2%" align=center>&nbsp;</TD>
    <TD width="1%" align=center>&nbsp;</TD>
    <TD width="17%" colSpan=4 align=center><B><U>Ore Grades</U></B> </TD>
    <TD width="2%" align=center>&nbsp;</TD>
    <TD width="1%" align=center>&nbsp;</TD>
    <TD width="17%" colSpan=4 align=center><B><U>Recovered Ounces</U></B> </TD>
    <TD width="2%" align=center>&nbsp;</TD>
    <TD width="1%" align=center>&nbsp;</TD>
    <TD width="17%" colSpan=4 align=center><B><U>Recoveries</U></B> </TD>
    <TD width="2%" align=center>&nbsp;</TD>
    <TD width="1%" align=center>&nbsp;</TD>
    <TD width="7%" align=center><B><U>Cash Cost</U></B> </TD>
    <TD width="2%" align=center>&nbsp;</TD>
    <TD width="1%" align=center>&nbsp;</TD>
    <TD width="7%" align=center><B><U>Direct Cost</U></B> </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%"
      align=center><B>Tonnes</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%"
      align=center><B>Ag(gpt)&nbsp;</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%"
      align=center><STRONG>Au(gpt)</STRONG>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%"
      align=center><B>Ag(oz)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%"
      align=center><B>Au(oz)</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%"
      align=center><STRONG>&nbsp;Ag(%) </STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%"
      align=center><STRONG>Au(%)</STRONG>&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
      align=center><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%"
      align=center><B>&nbsp;$per oz</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
      align=center><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%"
      align=center><B>&nbsp;$per tonne</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
  <TD>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Production 2010</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
  <TD bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Q1, 2010 </TD>
    <TD align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>112,963 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>270 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>1.34 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>766,210 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>3,775 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>78.3 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>78.7 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>6.39 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>79.45 </TD>
  <TD vAlign=bottom align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Q2, 2010 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>123,825 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>267 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>1.32 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>826,439 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>4,460 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>77.6 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>84.9 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>5.94 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>86.69 </TD>
  <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Q3, 2010 </TD>
    <TD align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>126,599 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>265 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>1.45 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>797,054 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>4,607 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>73.8 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>77.8 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>5.93 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>81.35 </TD>
  <TD vAlign=bottom align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Q4, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>143,623 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>267 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>1.37 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>895,931 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>4,871 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>72.6 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>76.7 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>4.72 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>80.86 </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>YTD 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>507,010 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>267 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>1.37 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>3,285,634 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>17,713 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>75.4 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>79.4 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>5.71 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>82.10 </TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Production 2009</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
  <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Q1, 2009 </TD>
    <TD align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>85,731 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>271 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>1.02 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>572,785 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>2,335 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>78.8 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>86.7 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>7.56 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>74.69 </TD>
  <TD vAlign=bottom align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Q2, 2009 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>90,338 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>259 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>1.16 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>584,486 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>2,768 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>77.2 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>85.0 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>6.95 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>79.46 </TD>
  <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Q3, 2009 </TD>
    <TD align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>93,276 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>271 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>1.42 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>661,903 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>3,604 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>79.6 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>84.6 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>5.19 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>78.91 </TD>
  <TD vAlign=bottom align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Q4, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>115,482 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>270 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>1.62 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>779,344 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>4,591 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>77.8 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>76.2 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>4.96 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>79.07 </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Total </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>384,827 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>268 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>1.33 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>2,598,518 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>13,298 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>78.3 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>82.6 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>6.04 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>78.14 </TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Production 2008</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; </TD>
  <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Q1, 2008 </TD>
    <TD align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>78,157 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>304 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>0.71 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>504,669 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>1,433 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>66.2 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>79.8 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>10.01 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>84.75 </TD>
  <TD vAlign=bottom align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Q2, 2008 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>86,391 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>257 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>0.77 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>517,077 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>1,705 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>72.8 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>83.0 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>9.62 </TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom align=right>75.96 </TD>
  <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Q3, 2008 </TD>
    <TD align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>96,721 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>270 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>0.93 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>625,094 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>2,465 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>75.4 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>84.9 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>9.55 </TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom align=right>80.11 </TD>
  <TD vAlign=bottom align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Q4, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>90,927 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>288 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>0.98 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>696,075 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>2,416 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>82.2 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>88.4 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>7.43 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=right>81.25 </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Total </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>352,196 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>279 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>0.85 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>2,342,915 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>8,019 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>74.5 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>84.2 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>9.03 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>80.42 </TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
  <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Q4, 2010 : Q4,
      2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>24% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>-1% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>-15% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>15% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>6% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>-7% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>1% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>-5% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>2% </TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
  <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Q4, 2010 : Q3,
      2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>13% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>1% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>-5% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>12% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>6% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>-2% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>-1% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>-20% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>-1% </TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp; </TD>
  <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>YTD 2010 : YTD
      2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>32% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>0% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>3% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>26% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>33% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>-4% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>-4% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>-5% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=right>5% </TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom
    align=left>&nbsp;</TD>
  </TR></TABLE>
<P align=center>6</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_7></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B>
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" colSpan=9
      align=left><B><I>Comparative Table of Guanacevi Mine Operations</I></B>
</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left ><B><U>Period</U></B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=center><B><U>Plant T'put</U></B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="15%" colSpan=4 align=center><B><U>Ore Grades</U></B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="15%" colSpan=4 align=center><B><U>Recovered
      Ounce</U>s</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="15%" colSpan=4 align=center><B><U>Recoveries</U></B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="6%" align=center><B><U>Cash Cost </U></B></TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD  width="6%" align=center><STRONG><U>Direct
      Cost</U></STRONG>&nbsp;&nbsp;</TD>
    <TD  width="2%" align=center>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%"
      align=center><B>Tonnes</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%"
      align=center><B>Ag(gpt)&nbsp;</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="6%"
    align=center><STRONG>Au(gpt)</STRONG>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%"
      align=center><B>Ag(oz)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%"
      align=center><B>Au(oz)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%"
      align=center><B>Ag(%)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%"
      align=center><B>Au(%)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%"
      align=center><B>$&nbsp;per oz</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%"
      align=center><B>&nbsp;$per tonne</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
  <TD>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff colSpan=3 align=left>&nbsp; &nbsp;<B>Production 2010
      Year:</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
  <TD bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Q1, 2010 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>69,522 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>333 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>0.74 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>574,796 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>1,277 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>77.2 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>77.2 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>8.11 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>87.97 </TD>
  <TD align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left >Q2, 2010 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>75,701 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>332 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>0.80 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>622,385 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>1,602 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>77.0 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>82.3 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>8.47 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>100.61 </TD>
  <TD bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Q3, 2010 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>75,039 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>326 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>0.77 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>585,422 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>1,545 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>74.4 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>83.2 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>8.55 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>94.71 </TD>
  <TD align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left
    >Q4, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>91,825 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>308 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>0.65 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>666,343 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>1,612 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>73.3 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>84.0 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>8.42 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>84.53 </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left >YTD
      2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>312,087 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>324</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>0.74    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>2,448,946 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>6,036    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>75.3    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>81.9    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>8.39    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>91.64    </TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff colSpan=3 align=left>&nbsp; &nbsp;<B>Production 2009
      Year:</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
  <TD bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Q1, 2009 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>51,073 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>326 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>0.56 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>409,476 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>795 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>79.3 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>88.1 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>7.81 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>81.41 </TD>
  <TD align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left >Q2, 2009 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>53,936 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>311 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>0.64 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>415,775 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>952 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>77.1 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>86.2 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>9.21 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>96.86 </TD>
  <TD bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Q3, 2009 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>54,791 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>317 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>0.69 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>457,609 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>1,109 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>79.3 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>89.8 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>8.32 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>90.82 </TD>
  <TD align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left
    >Q4, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>70,832 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>332 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>1.17 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>587,477 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>2,021 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>77.7 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>75.9 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>7.00 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>89.68 </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      >Total </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>230,632 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>322</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>0.80    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>1,870,337 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>4,877    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>78.3    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>84.3    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>7.99    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>89.80    </TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff colSpan=3 align=left>&nbsp; &nbsp;<B>Production 2008
      Year:</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
  <TD bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Q1, 2008 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>68,651 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>322 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>0.60 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>458,624 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>1,012 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>64.5 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>75.9 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>8.61 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>75.47 </TD>
  <TD align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left >Q2, 2008 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>65,276 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>287 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>0.55 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>419,245 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>883 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>69.2 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>78.7 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>8.92 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>71.51 </TD>
  <TD bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Q3, 2008 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>63,979 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>321 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>0.58 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>465,661 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>976 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>70.7 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>81.3 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>9.66 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>83.68 </TD>
  <TD align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left
    >Q4, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>57,750 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>346 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>0.58 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>514,867 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>917 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>79.4 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>87.7 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>7.37 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>84.00 </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      >Total </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>255,656 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>318</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>0.58    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>1,858,397 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>3,788    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>70.6    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>80.6    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>8.60    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>78.44    </TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff >&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
  <TD bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left >Q4,
      2010 : Q4, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>30%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-7%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-44%    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>13%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-20%    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-6%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>11%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>20%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-6%</TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff >&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
  <TD bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left >Q4,
      2010 : Q3, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>22%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-6%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-16%    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>14%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>4% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-2%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>1% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-2%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-11%    </TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff >&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
  <TD bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left >YTD
      2010: YTD 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>35%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>0% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-8%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>31%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>24%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-4%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-3%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>5% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>2% </TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR></TABLE>
<P align=center>7</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_8></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B>
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" colSpan=9
      align=left><B><I>Comparative Table of Guanajuato Mine Operations</I></B>
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left ><B>Period</B> </TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="6%" align=center><B><U>Plant</U></B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="15%" colSpan=4 align=center><B><U>Ore Grades</U></B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="15%" colSpan=4 align=center><B><U>Recovered
      Ounce</U>s</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="15%" colSpan=4 align=center><B><U>Recoveries</U></B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="6%" align=center><B><U>Cash Cost</U></B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="6%" align=center><B><U>Direct Cost</U></B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center
      >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%"
      align=center><B>Tonnes</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%"
      align=center><B>Ag(gpt)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%"
      align=center><B>Au(gpt)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%"
      align=center><B>Ag(oz)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%"
      align=center><B>Au(oz)&nbsp;</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="6%"
    align=center><STRONG>Ag(%)&nbsp;</STRONG>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="6%"
    align=center><STRONG>Au(%)</STRONG>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%"
      align=center><B>$&nbsp;per oz</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center><B></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="6%"
      align=center><B>$&nbsp;per tonne</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left ><B>Production 2010 Year:</B>
    </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
  <TD bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Q1, 2010 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>43,441 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>168 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>2.29 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>191,414 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>2,498 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>81.6 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>79.5 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>1.23 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>65.81 </TD>
  <TD align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left >Q2, 2010 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>48,124 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>166 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>2.14 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>204,054 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>2,858 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>79.4 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>86.3 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>(1.77</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>64.81 </TD>
  <TD bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Q3, 2010 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>51,560 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>177 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>2.45 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>211,632 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>3,060 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>72.1 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>75.3 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>(1.33</TD>
    <TD align=left>) </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>61.91 </TD>
  <TD align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left
    >Q4, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>51,798 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>195 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>2.66 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>229,588 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>3,259 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>70.7 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>73.6 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>(6.02</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>74.37 </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left >YTD
      2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>194,923 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>177</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>2.39    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>836,688 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>11,675    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>75.7    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>78.5    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=right>(2.14</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>66.81    </TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left ><B>Production 2009 Year:</B>
    </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
  <TD bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Q1, 2009 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>34,658 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>189 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>1.70 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>163,309 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>1,540 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>77.4 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>83.3 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>6.90 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>64.75 </TD>
  <TD align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left >Q2, 2009 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>36,402 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>183 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>1.93 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>168,711 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>1,816 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>77.5 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>84.3 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>1.38 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>53.68 </TD>
  <TD bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Q3, 2009 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>38,485 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>206 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>2.45 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>204,294 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>2,495 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>80.2 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>82.3 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>(1.82</TD>
    <TD align=left>) </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>61.95 </TD>
  <TD align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left
    >Q4, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>44,650 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>171 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>2.34 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>191,867 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>2,570 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>78.2 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>76.5 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>(1.31</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>62.24 </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      >Total </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>154,195 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>187</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>2.13    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>728,181 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>8,421    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>78.3    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>81.3    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>1.01    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>60.71    </TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left ><B>Production 2008 Year:</B>
    </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
  <TD bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Q1, 2008 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>9,506 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>171 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>1.54 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>46,045 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>421 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>88.1 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>87.7 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>24.58 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>151.80 </TD>
  <TD align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left >Q2, 2008 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>21,115 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>164 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>1.44 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>97,832 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>822 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>88.1 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>87.7 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>12.75 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>89.70 </TD>
  <TD bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Q3, 2008 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>32,742 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>170 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>1.62 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>159,433 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>1,489 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>88.3 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>87.2 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>9.22 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>73.12 </TD>
  <TD align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left
    >Q4, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>33,177 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>188 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>1.67 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>181,208 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>1,499 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>90.6 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>88.9 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>7.90 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>76.47 </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      >Total </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>96,540    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>175</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>1.59    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>484,518 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>4,231    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>89.0    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>87.9    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>10.79    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>85.64    </TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff >&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
  <TD bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left >Q4,
      2010 : Q4, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>16%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>14%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>14%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>20%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>27%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-10%    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-4%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>360%    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>19%</TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff >&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
  <TD bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left >Q4,
      2010 : Q3, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>0% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>10%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>9% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>8% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>7% </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-2%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-2%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>353%    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>20%</TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff >&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
  <TD bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left >YTD
      2010 : YTD 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>26%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-5%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>13%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>15%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>39%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-3%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-3%</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>-311%    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>10%</TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR></TABLE>
<P align=justify><B><I><U>Cash Operating Costs and Direct Costs (Non-GAAP
Measures)</U></I><I> </I></B></P>
<P align=justify>Cash operating cost per oz and direct cost per tonne are
non-GAAP measures commonly reported in the silver and gold mining industry as a
benchmark of performance, but it does not have a standardized meaning prescribed
by GAAP and is therefore may not be comparable to similar measures presented by
other issuers. The cash operating cost and direct cost per tonne are provided to
investors and used by management as a measure of the Company&#146;s operating
performance. The Company reports its direct cost per tonne of throughput as cost
of sales net of change in inventories and cash operating cost per oz of silver
produced as cost of sales, net of changes in inventories, changes in by-product
inventories, gold credits and royalties. </P>
<P align=center>8</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_9></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B>Reconciliation of cash operating cost per oz and direct cost
per tonne to cost of sales (2010): </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    colSpan=9 align=left><B>Consolidated (in US $000s except ozs
      produced/payable, cash cost/oz and direct cost/tonne)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="8%" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="8%" align=left>&nbsp; </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=center><B>For the year ended</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD colSpan=10
    align=center style="BORDER-BOTTOM: #000000 1px solid"><B>For the three months ended</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=center><B>31-Dec-10</B> </TD>
    <TD width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Dec-10</B> </TD>
    <TD width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Sep-10</B> </TD>
    <TD width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Jun-10</B> </TD>
    <TD width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Mar-10</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Cost
      of Sales </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;41,514 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;11,223 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;10,858 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;10,267 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;9,166 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Add/(Subtract): </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
  align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in Inventories </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>109 </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>391 </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>(559</TD>
    <TD bgColor=#e6efff
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>468 </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>(191</TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left><B>Direct Costs</B>    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>41,623</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>11,614</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>10,299</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>10,735</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>8,975</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>Add/(Subtract): </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;Royalties </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>(1,212</TD>
    <TD align=left>) </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>(322</TD>
    <TD align=left>) </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>(147</TD>
    <TD align=left>) </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>(515</TD>
    <TD align=left>) </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>(228</TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in By-Product Inventories </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>683 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>807 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>(1,075</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>(70</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>1,021 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;By-Product gold sales </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=right>(22,528</TD>
    <TD align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=right>(7,915</TD>
    <TD align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=right>(4,401</TD>
    <TD align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=right>(5,292</TD>
    <TD align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=right>(4,920</TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Cash Operating Costs</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;18,566</B> </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;4,184</B> </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;4,676</B> </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;4,858</B> </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;4,848</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 3px double; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Throughput tonnes</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>507,010 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>143,623 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>126,599 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>123,825 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>112,963 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
  align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Ozs
      Produced </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>3,285,634 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>895,931 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>797,054 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>826,439 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>766,210 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Ozs Payable </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>3,252,778 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>886,973 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>789,080 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>818,176 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>758,549 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
  align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Direct Cost per Tonne US$</B> </TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>82.10</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>80.86</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>81.35</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>86.69</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>79.45</B> </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid"
    align=left><B>Cash Operating Cost Per Oz US$ *</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>5.71</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>4.72</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>5.93</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>5.94</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>6.39</B> </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
  align=left>&nbsp;</TD>
  </TR></TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    colSpan=15 align=left><B>Guanacevi Mines (in US $000s except ozs
      produced/payable, cash cost/oz and direct cost/tonne)</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=center><B>For the year ended</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD colSpan=10
    align=center style="BORDER-BOTTOM: #000000 1px solid"><B>For the three months ended</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=center><B>31-Dec-10</B> </TD>
    <TD width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Dec-10</B> </TD>
    <TD width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Sep-10</B> </TD>
    <TD width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Jun-10</B> </TD>
    <TD width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Mar-10</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Cost
      of Sales </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;28,860 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;7,235 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;8,163 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;7,300 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;6,162 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Add/(Subtract): </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
  align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in Inventories </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>(259</TD>
    <TD bgColor=#e6efff
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>527 </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>(1,056</TD>
    <TD bgColor=#e6efff
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>316 </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>(46</TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left><B>Direct Costs</B>    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>28,601</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>7,762</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>7,107</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>7,616</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>6,116</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>Add/(Subtract): </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;Royalties </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>(1,212</TD>
    <TD align=left>) </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>(322</TD>
    <TD align=left>) </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>(147</TD>
    <TD align=left>) </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>(515</TD>
    <TD align=left>) </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>(228</TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in By-Product Inventories </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>676 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>585 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>(255</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>63 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>283 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;By-Product gold sales </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=right>(7,727</TD>
    <TD align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=right>(2,472</TD>
    <TD align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=right>(1,751</TD>
    <TD align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=right>(1,948</TD>
    <TD align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=right>(1,556</TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Cash Operating Costs</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;20,338</B> </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;5,553</B> </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;4,954</B> </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;5,216</B> </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;4,615</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 3px double; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Throughput tonnes</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>312,087 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>91,825 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>75,039 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>75,701 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>69,522 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
  align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Ozs
      Produced </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>2,448,946 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>666,343 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>585,422 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>622,385 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>574,796 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Ozs Payable </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>2,424,457 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>659,681 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>579,566 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>616,161 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>569,049 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
  align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Direct Cost per Tonne US$</B> </TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>91.64</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>84.53</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>94.71</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>100.61</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>87.97</B> </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid"
    align=left><B>Cash Operating Cost Per Oz US$ *</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>8.39</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>8.42</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>8.55</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>8.47</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>8.11</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-RIGHT: #000000 2px solid" align=left>&nbsp;</TD>
  </TR></TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    colSpan=15 align=left><B>Guanajuato Mines Project (in US $000s except ozs
      produced/payable, cash cost/oz and direct cost/tonne)</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=center><B>For the year ended</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD colSpan=10
    align=center style="BORDER-BOTTOM: #000000 1px solid"><B>For the three months ended</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=center><B>31-Dec-10</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Dec-10</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Sep-10</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Jun-10</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Mar-10</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Cost
      of Sales </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;12,654 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;3,988 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;2,695 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;2,967 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;3,004 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Add/(Subtract): </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in Inventories </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>368 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>(136</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>497 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>152 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>(145</TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left><B>Direct Costs</B>    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>13,022</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>3,852</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>3,192</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>3,119</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>2,859</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>Add/(Subtract): </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;Royalties </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>- </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>- </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>- </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>- </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>- </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in By-Product Inventories </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>7 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>222 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>(820</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>(133</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>738 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;By-Product gold sales </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=right>(14,801</TD>
    <TD
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=right>(5,443</TD>
    <TD
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=right>(2,650</TD>
    <TD
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=right>(3,344</TD>
    <TD
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=right>(3,364</TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Cash Operating Costs</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;(1,772</B></TD>
    <TD bgColor=#e6efff align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;(1,369</B></TD>
    <TD bgColor=#e6efff align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;(278</B></TD>
    <TD bgColor=#e6efff align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;(358</B></TD>
    <TD bgColor=#e6efff align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;233</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 3px double; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Throughput tonnes</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>194,923 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>51,798 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>51,560 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>48,124 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>43,441 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Ozs
      Produced </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>836,688 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>229,588 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>211,632 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>204,054 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>191,414 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Ozs Payable </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>828,321 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>227,292 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>209,514 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>202,015 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>189,500 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Direct Cost per Tonne US$</B> </TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>66.81</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>74.37</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>61.91</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>64.81</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>65.81</B> </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid"
    align=left><B>Cash Operating Cost Per Oz US$ *</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>($2.14</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>($6.02</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>($1.33</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>($1.77</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>1.23</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-RIGHT: #000000 2px solid" align=left>&nbsp;</TD>
  </TR></TABLE>
<P align=justify>* Based on payable silver production attributable to cost of
sales</P>
<P align=center>9</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_10></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B>Reconciliation of cash operating cost per oz and direct cost
per tonne to cost of sales (2009): </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    colSpan=9 align=left><B>Consolidated (in US $000s except ozs
      produced/payable, cash cost/oz and direct cost/tonne)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="8%" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="8%" align=left>&nbsp; </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=center><B>For the year ended</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD colSpan=10
    align=center style="BORDER-BOTTOM: #000000 1px solid"><B>For the three months ended</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=center><B>31-Dec-09</B> </TD>
    <TD width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Dec-09</B> </TD>
    <TD width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Sep-09</B> </TD>
    <TD width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Jun-09</B> </TD>
    <TD width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Mar-09</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Cost
      of Sales </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;29,478 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;11,439 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;6,516 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;5,640 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;5,883 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Add/(Subtract): </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
  align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in Inventories </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>&nbsp;594 </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>&nbsp;(2,308</TD>
    <TD bgColor=#e6efff
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>&nbsp;844 </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>&nbsp;1,538 </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>&nbsp;520 </TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left><B>Direct Costs</B>    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>&nbsp;30,072</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>&nbsp;9,131</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>&nbsp;7,360</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>&nbsp;7,178</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>&nbsp;6,403</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>Add/(Subtract): </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;Royalties </TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;(820</TD>
    <TD align=left>) </TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;27 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;(296</TD>
    <TD align=left>) </TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;(334</TD>
    <TD align=left>) </TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;(217</TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in By-Product Inventories </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(1,648</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;807 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(1,398</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(1,003</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(54</TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;By-Product gold sales </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right>&nbsp;(12,071</TD>
    <TD align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right>&nbsp;(6,141</TD>
    <TD align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right>&nbsp;(2,263</TD>
    <TD align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right>&nbsp;(1,820</TD>
    <TD align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right>&nbsp;(1,847</TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Cash Operating Costs</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;15,533</B> </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;3,824</B> </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;3,403</B> </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;4,021</B> </TD>
    <TD bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;4,285</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 3px double; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Throughput tonnes</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>384,827 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>115,482 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>93,276 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>90,338 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>85,731 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
  align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Ozs
      Produced </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>2,598,518 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>779,344 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>661,903 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>584,486 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>572,785 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Ozs Payable </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>2,572,533 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>771,552 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>655,284 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>578,641 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>567,056 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
  align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Direct Cost per Tonne US$</B> </TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>78.14</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>79.07</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>78.91</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>79.46</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>74.69</B> </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid"
    align=left><B>Cash Operating Cost Per Oz US$ *</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>6.04</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>4.96</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>5.19</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>6.95</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>7.56</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-RIGHT: #000000 2px solid" align=left>&nbsp;</TD>
  </TR></TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    colSpan=9 align=left><B>Guanacevi Mines (in US $000s except ozs
      produced/payable, cash cost/oz and direct cost/tonne)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="8%" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="8%" align=left>&nbsp; </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=center><B>For the year ended</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD colSpan=10
    align=center style="BORDER-BOTTOM: #000000 1px solid"><B>For the three months ended</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=center><B>31-Dec-09</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Dec-09</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Sep-09</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Jun-09</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Mar-09</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Cost
      of Sales </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;20,255 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;8,142 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;4,908 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;3,782 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;3,423 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Add/(Subtract): </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in Inventories </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>&nbsp;455 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>&nbsp;(1,790</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>&nbsp;68 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>&nbsp;1,442 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>&nbsp;735 </TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left><B>Direct Costs</B>    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>&nbsp;20,710</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>&nbsp;6,352</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>&nbsp;4,976</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>&nbsp;5,224</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>&nbsp;4,158</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>Add/(Subtract): </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;Royalties </TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;(820</TD>
    <TD align=left>) </TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;27 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;(296</TD>
    <TD align=left>) </TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;(334</TD>
    <TD align=left>) </TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;(217</TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in By-Product Inventories </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(661</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;188 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(24</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(676</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(149</TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;By-Product gold sales </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right>&nbsp;(4,427</TD>
    <TD
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right>&nbsp;(2,495</TD>
    <TD
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right>&nbsp;(885</TD>
    <TD
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right>&nbsp;(423</TD>
    <TD
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right>&nbsp;(624</TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Cash Operating Costs</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;14,802</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;4,072</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;3,771</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;3,791</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;3,168</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 3px double; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Throughput tonnes</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>230,632 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>70,832 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>54,791 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>53,936 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>51,073 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Ozs
      Produced </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>1,870,337 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>587,477 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>457,609 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>415,775 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>409,476 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Ozs Payable </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>1,851,634 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>581,603 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>453,033 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>411,617 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>405,381 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Direct Cost per Tonne US$</B> </TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>89.80</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>89.68</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>90.82</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>96.86</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>81.41</B> </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid"
    align=left><B>Cash Operating Cost Per Oz US$ *</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>7.99</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>7.00</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>8.32</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>9.21</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>7.81</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-RIGHT: #000000 2px solid" align=left>&nbsp;</TD>
  </TR></TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    colSpan=12 align=left><B>Guanajuato Mines Project (in US $000s except ozs
      produced/payable, cash cost/oz and direct cost/tonne)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="8%" align=left>&nbsp; </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=center><B>For the year ended</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD colSpan=10
    align=center style="BORDER-BOTTOM: #000000 1px solid"><B>For the three months ended</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=center><B>31-Dec-09</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Dec-09</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Sep-09</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Jun-09</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Mar-09</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Cost
      of Sales </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;9,223 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;3,297 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;1,608 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;1,858 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;2,460 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Add/(Subtract): </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in Inventories </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>&nbsp;138 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>&nbsp;(518</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>&nbsp;776 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>&nbsp;96 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>&nbsp;(216</TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left><B>Direct Costs</B>    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>&nbsp;9,361</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>&nbsp;2,779</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>&nbsp;2,384</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>&nbsp;1,954</B> </TD>
    <TD
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>&nbsp;2,244</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>Add/(Subtract): </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;Royalties </TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;- </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;- </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;- </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;- </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;- </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in By-Product Inventories </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(987</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;619 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(1,374</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(327</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;95 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;By-Product gold sales </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right>&nbsp;(7,644</TD>
    <TD
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right>&nbsp;(3,646</TD>
    <TD
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right>&nbsp;(1,378</TD>
    <TD
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right>&nbsp;(1,397</TD>
    <TD
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right>&nbsp;(1,223</TD>
  <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Cash Operating Costs</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;730</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;(248</B></TD>
    <TD bgColor=#e6efff align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;(368</B></TD>
    <TD bgColor=#e6efff align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;230</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;1,116</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 3px double; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Throughput tonnes</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>154,195 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>44,650 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>38,485 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>36,402 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>34,658 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Ozs
      Produced </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>728,181 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>191,867 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>204,294 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>168,711 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>163,309 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Ozs Payable </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>720,899 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>189,949 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>202,251 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>167,024 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>161,675 </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Direct Cost per Tonne US$</B> </TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>60.71</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>62.24</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>61.95</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>53.68</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>64.75</B> </TD>
  <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid"
    align=left><B>Cash Operating Cost Per Oz US$ *</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>1.01</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>($1.31</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>($1.82</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>1.38</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>6.90</B> </TD>
  <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-RIGHT: #000000 2px solid" align=left>&nbsp;</TD>
  </TR></TABLE>
<P align=justify>* Based on payable silver production attributable to cost of
sales</P>
<P align=center>10</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_11></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B>Reconciliation of cash operating cost per oz and direct cost
per tonne to cost of sales (2008): </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    colSpan=9 align=left><B>Consolidated (in US $000s except ozs
      produced/payable, cash cost/oz and direct cost/tonne)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="8%" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="8%" align=left>&nbsp; </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=center><B>For the year ended</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD colSpan=10
    align=center style="BORDER-BOTTOM: #000000 1px solid"><B>For the three months ended</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=center><B>31-Dec-08</B> </TD>
    <TD width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Dec-08</B> </TD>
    <TD width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Sep-08</B> </TD>
    <TD width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Jun-08</B> </TD>
    <TD width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Mar-08</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Cost
      of Sales </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;27,802 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;7,226 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;7,648 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;6,361 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;6,567 </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Add/(Subtract): </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=left>&nbsp; </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" width="2%"
  align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in Inventories </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;520 </TD>
    <TD bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;162 </TD>
    <TD bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;100 </TD>
    <TD bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;201 </TD>
    <TD bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;57 </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left><B>Direct Costs</B>    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>&nbsp;28,322</B> </TD>
    <TD width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>&nbsp;7,388</B> </TD>
    <TD width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>&nbsp;7,748</B> </TD>
    <TD width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>&nbsp;6,562</B> </TD>
    <TD width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>&nbsp;6,624</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>Add/(Subtract): </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;Royalties </TD>
    <TD width="1%" align=left>$</TD>
    <TD width="8%" align=right>&nbsp;(807</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>$</TD>
    <TD width="8%" align=right>&nbsp;(264</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>$</TD>
    <TD width="8%" align=right>&nbsp;(77</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>$</TD>
    <TD width="8%" align=right>&nbsp;(198</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>$</TD>
    <TD width="8%" align=right>&nbsp;(268</TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in By-Product Inventories </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;(347</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;(315</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;(5</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;(27</TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff width="2%"
    align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;By-Product gold sales </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>&nbsp;(6,383</TD>
    <TD width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>&nbsp;(1,742</TD>
    <TD width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>&nbsp;(1,821</TD>
    <TD width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>&nbsp;(1,473</TD>
    <TD width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>&nbsp;(1,347</TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Cash Operating Costs</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;20,785</B> </TD>
    <TD bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;5,067</B> </TD>
    <TD bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;5,850</B> </TD>
    <TD bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;4,886</B> </TD>
    <TD bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;4,982</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 3px double; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Throughput tonnes</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>352,196 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>90,927 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>96,721 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>86,391 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>78,157 </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" width="2%"
  align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Ozs
      Produced </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>2,343,455 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>696,615 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>625,094 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>517,077 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>504,669 </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Ozs Payable </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>2,300,640 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>682,401 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>612,465 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>507,993 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>497,781 </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" width="2%"
  align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Direct Cost per Tonne US$</B> </TD>
    <TD bgColor=#e6efff width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>80.42</B> </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>81.25</B> </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>80.11</B> </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>75.96</B> </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>84.75</B> </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid"
    align=left><B>Cash Operating Cost Per Oz US$ *</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%"
      align=right><B>9.03</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%"
      align=right><B>7.43</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%"
      align=right><B>9.55</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%"
      align=right><B>9.62</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%"
      align=right><B>10.01</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    colSpan=9 align=left><B>Guanacevi Mines (in US $000s except ozs
      produced/payable, cash cost/oz and direct cost/tonne)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="8%" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="8%" align=left>&nbsp; </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=center><B>For the year ended</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD colSpan=10
    align=center style="BORDER-BOTTOM: #000000 1px solid"><B>For the three months ended</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=center><B>31-Dec-08</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Dec-08</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Sep-08</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Jun-08</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Mar-08</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Cost
      of Sales </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;19,950 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;4,983 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;5,376 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;4,467 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;5,124 </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Add/(Subtract): </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=left>&nbsp; </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in Inventories </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;104 </TD>
    <TD bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;(132</TD>
    <TD bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;(22</TD>
    <TD bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;201 </TD>
    <TD bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;57 </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left><B>Direct Costs</B>    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>&nbsp;20,054</B> </TD>
    <TD  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>&nbsp;4,851</B> </TD>
    <TD  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>&nbsp;5,354</B> </TD>
    <TD  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>&nbsp;4,668</B> </TD>
    <TD  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>&nbsp;5,181</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>Add/(Subtract): </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;Royalties </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="8%" align=right>&nbsp;(807</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="8%" align=right>&nbsp;(264</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="8%" align=right>&nbsp;(77</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="8%" align=right>&nbsp;(198</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="8%" align=right>&nbsp;(268</TD>
    <TD style="BORDER-RIGHT: #000000 2px solid"  width="2%"
    align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in By-Product Inventories </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;(91</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;(59</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;(5</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;(27</TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;By-Product gold sales </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>&nbsp;(3,336</TD>
    <TD  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>&nbsp;(769</TD>
    <TD  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>&nbsp;(824</TD>
    <TD  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>&nbsp;(764</TD>
    <TD  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>&nbsp;(979</TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Cash Operating Costs</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;15,820</B> </TD>
    <TD bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;3,759</B> </TD>
    <TD bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;4,453</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;3,701</B> </TD>
    <TD bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;3,907</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 3px double; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Throughput tonnes</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>255,656 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>57,750 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>63,979 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>65,276 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>68,651 </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Ozs
      Produced </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>1,858,937 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>515,407 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>465,661 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>419,245 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>458,624 </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Ozs Payable </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>1,840,348 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>510,253 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>461,004 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>415,053 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>454,038 </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Direct Cost per Tonne US$</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>78.44</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>84.00</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>83.68</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>71.51</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>75.47</B> </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid"
    align=left><B>Cash Operating Cost Per Oz US$ *</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%"
      align=right><B>8.60</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%"
      align=right><B>7.37</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%"
      align=right><B>9.66</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%"
      align=right><B>8.92</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%"
      align=right><B>8.61</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR></TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    colSpan=12 align=left><B>Guanajuato Mines Project (in US $000s except ozs
      produced/payable, cash cost/oz and direct cost/tonne)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid"
    width="8%" align=left>&nbsp; </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=center><B>For the year ended</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD colSpan=10
    align=center style="BORDER-BOTTOM: #000000 1px solid"><B>For the three months ended</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=center><B>31-Dec-08</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Dec-08</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD width="8%"
      align=center style="BORDER-BOTTOM: #000000 1px solid"><B>30-Sep-08</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>30-Jun-08</B> </TD>
    <TD  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=center><B>31-Mar-08</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Cost
      of Sales </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;7,852 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;2,243 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;2,272 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;1,894 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;1,443 </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Add/(Subtract): </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=left>&nbsp; </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in Inventories </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;416 </TD>
    <TD bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;294 </TD>
    <TD bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=right>&nbsp;122 </TD>
    <TD bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>&nbsp;- </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left><B>Direct Costs</B>    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>&nbsp;8,268</B> </TD>
    <TD  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>&nbsp;2,537</B> </TD>
    <TD  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right><B>&nbsp;2,394</B> </TD>
    <TD  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>&nbsp;1,894</B> </TD>
    <TD  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right><B>&nbsp;1,443</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>Add/(Subtract): </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;Royalties </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="8%" align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="8%" align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="8%" align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="8%" align=right>&nbsp;- </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Change in By-Product Inventories </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;(256</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;(256</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="8%" align=right>&nbsp;- </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp;
      &nbsp;By-Product gold sales </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>&nbsp;(3,047</TD>
    <TD  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>&nbsp;(973</TD>
    <TD  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=right>&nbsp;(997</TD>
    <TD  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>&nbsp;(709</TD>
    <TD  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>&nbsp;(368</TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Cash Operating Costs</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;4,965</B> </TD>
    <TD bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;1,308</B> </TD>
    <TD bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    align=right><B>&nbsp;1,397</B> </TD>
    <TD bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;1,185</B> </TD>
    <TD bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="8%"
    align=right><B>&nbsp;1,075</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 3px double; BORDER-RIGHT: #000000 2px solid"
    bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Throughput tonnes</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>96,540 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>33,177 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD align=right>32,742 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>21,115 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>9,506 </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Ozs
      Produced </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>484,518 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>181,208 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=right>159,433 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>97,832 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="8%" align=right>46,045 </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Ozs Payable </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>460,292 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>172,148 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD align=right>151,461 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>92,940 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="8%" align=right>43,743 </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left><B>Direct Cost per Tonne US$</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>85.64</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>76.47</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff align=right><B>73.12</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>89.70</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="8%" align=right><B>151.80</B> </TD>
    <TD style="BORDER-RIGHT: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid"
    align=left><B>Cash Operating Cost Per Oz US$ *</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%"
      align=right><B>10.79</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%"
      align=right><B>7.60</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right><B>9.22</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%"
      align=right><B>12.75</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="8%"
      align=right><B>24.58</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=justify>* Based on payable silver production attributable to cost of
sales</P>
<P align=center>11</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><I>Exploration Results </I></B></P>
<P align=justify>In 2010 exploration was focused on drilling (41,364 meters in
148 holes), sampling and mapping of three prospective targets at the two
operating mines (Guanacevi, Guanajuato) and four exploration projects (Parral,
San Sebastian, Arroyo Seco and El Toro) in Mexico.</P>
<P align=justify>At Guanacevi, mapping and sampling of numerous mineralized
silver-gold vein structures continued in 2010, while drilling started on the
Epsilon and La Blanca areas, with very encouraging results. Endeavour acquired
three new properties in the San Pedro area of Guanacevi in 2010 and identified
three new high grade, silver-gold veins. Two exciting new finds, Epsilon and La
Blanca, are in the vicinity of historic high grade silver mines along the
western side of San Pedro, and two more, San Joachin and Santa Isabel, lie along
strike to north of historic high grade silver mines that occupy the
east-bounding faults of the Guanacevi horst block. In 2010, the Company drilled
7,000 meters in 23 holes in the San Pedro area resulting in the Epsion and La
Blanca finds. Drill results announced included 3,319 gpt silver and 7.1 gpt gold
over a 2.0 meter true width in the Epsilon area (hole EPS1-2) and 3,000 gpt
silver and 7.7 gpt gold over a 2.1 meters true width in the La Blanca area (hole
BC-03). An aggressive drilling program on several mineralized veins is planned
for 2011.</P>
<P align=justify>At Guanajuato, exploration drilling south of the Bolanitos mine
connected the Lucero Extension and Lucero South mineralized zones, thereby
extending the high grade, silver-gold mineralization in the Lucero vein a full
800 meters in length. The Company also discovered three new high grade
silver-gold veins called Karina, Fernanda and Daniela located in the footwall of
the Lucero vein. A total of 61 core holes were drilled during the year totalling
18,000 meters in the district. Recent drill results include 158 gpt silver and
6.7 gpt gold over a 1.8 meters true width in the Daniela vein (hole KA-27) and
367 gpt silver and 1.9 gpt gold over a 1.8 meters true width in the Karina vein
(hole KA-29). Like Guanacevi, Endeavour continued to expand its land position at
Guanajuato in 2010 with the addition of four properties totalling 243 hectares.
Two drills will continue to delineate multiple mineralized veins in 2011.</P>
<P align=justify>In 2010, the Company drilled 10,000 meters in 34 holes at the
San Juanico property in order to extend the known silver-gold-lead-zinc
mineralization from Endeavour&#146;s adjacent El Cometa property. A new
silver-gold-copper-lead-zinc resource was outlined, resulting in a significant
expansion of the Parral Project indicated resource to 1.63 million tonnes
containing 2.6 million ounces of silver and inferred resources to 1.30 million
tonnes containing 2.7 million ounces of silver. The Company is carrying out a
preliminary economic assessment, in order to evaluate the next phase of work for
the project.</P>
<P align=justify>A Phase 1 mapping and sampling program was completed at the San
Sebastian project in Jalisco and a Phase 2 drilling program will be carried out
in 2011.</P>
<P align=justify>A small exploration program at Arroyo Seco was completed
including 12 drill holes for a total of 1,241 meters. The Company completed a
technical report and is evaluating its alternatives for the property.</P>
<P align=justify>At El Toro, mapping, sampling and trenching were carried out to
identify targets, and a program of 12 diamond drill holes were completed,
indentifying significant structures, but carrying low metal values. </P>
<P align=justify><B><U>RESERVES AND RESOURCES</U> <BR></B>The updated NI
43-101 reserve and resource estimates to December 31, 2010 include the Company&#146;s
three active silver mining and exploration projects in Mexico, the Guanacevi
Mines project in Durango State, the Guanajuato Mines project in Guanajuato
State, the Parral Exploration project in Chihuahua State and the Arroyo Seco
Exploration project in the Michoacan State. </P>
<P align=justify>The Company retained Micon International Ltd (&#147;Micon&#148;), to
audit the updated reserves and resources to December 31, 2010 for the Guanacevi
project. The Qualified Person for reporting the reserves is Robert J. Leader,
P.Eng. an associate with Micon. The Qualified Persons for reporting the
Guanacevi resources, are William J. Lewis, B.Sc., P.Geo, Charley Z. Murahwi,
M.Sc., P.Geo, MAusIMM and Dibya Kanti Mukhopadhyay, M.Sc,, MAusIMM also Micon
employees. </P>
<P align=center>12</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify>The Company retained Micon, to audit the updated reserves and
resources to December 31, 2010 for the Guanajuato project. The Qualified Person
for reporting the Guanajuato reserves is Robert J. Leader, P.Eng. an associate
with Micon. The Qualified Persons for reporting the Guanajuato resources are
William J. Lewis, B.Sc., P.Geo, Charley Z. Murahwi, M.Sc., P.Geo, MAusIMM and
Dibya Kanti Mukhopadhyay, M.Sc,, MAusIMM also Micon employees. </P>
<P align=justify>The Company
  retained Micon, to audit the updated resources to December 31, 2010, based on
  the then current metal prices for the Parral Project (El Cometa Property). The
  Qualified Persons for reporting the Parral resources are William J. Lewis,
  B.Sc., P.Geo, Charley Z. Murahwi, M.Sc., P.Geo, MAusIMM and Dibya Kanti
  Mukhopadhyay, M.Sc., MAusIMM., who are Micon employees. </P>
<P align=justify>The Qualified Persons for reporting the Arroyo Seco resources
are David St Clair Dunn, P.Geo, who is a geological consultant and Barry Devlin,
P.Geo who is the Company&#146;s Vice President of Exploration.</P>
<P align=justify>The reserve and resource statements for the Guanacevi,
Guanajuato, Parral and Arroyo Seco Projects were classified using the
definitions and guidelines of the Canadian Institute of Mining, Metallurgy and
Petroleum CIM standards on Mineral Resources and Reserves (CIM Standards) and
the guidelines of NI 43-101. The information should be read in conjunction with
corresponding technical reports filed on SEDAR March 1, 2011 and March 21,
2011.</P>
<P style="MARGIN-LEFT: 20%"
align=left><B>Reserves&nbsp;and&nbsp;Resources&nbsp;(as&nbsp;of&nbsp;December&nbsp;31,&nbsp;2010)&nbsp;</B></P>

<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="80%">

  <TR vAlign=top>
    <TD colSpan=6
      align=left><B>Reserves Proven &amp;
      Probable </B></TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left><B>Description&nbsp;&nbsp;</B> </TD>
    <TD width="16%"
      align=center>&nbsp;<B>Tonnes&nbsp;</B> </TD>
    <TD width="16%"
      align=center><B>Ag&nbsp;g/t&nbsp;</B> </TD>
    <TD width="16%"
      align=center><B>Au&nbsp;g/t&nbsp;</B> </TD>
    <TD width="16%"
      align=center><B>Ag&nbsp;oz&nbsp;</B> </TD>
    <TD width="16%"
      align=center><B>Au&nbsp;oz&nbsp;</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD colSpan=6
      align=left><B>Proven </B></TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left>&nbsp;Guanacevi&nbsp; </TD>
    <TD width="16%"
      align=right>&nbsp;576,000&nbsp; </TD>
    <TD width="16%"
      align=center>313&nbsp; </TD>
    <TD width="16%"
      align=center>0.62&nbsp; </TD>
    <TD width="16%"
      align=right>5,796,000 </TD>
    <TD width="16%"
      align=right>11,400&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left>&nbsp;Guanajuato&nbsp; </TD>
    <TD width="16%"
      align=right>&nbsp;141,000&nbsp; </TD>
    <TD width="16%"
      align=center>189&nbsp; </TD>
    <TD width="16%"
      align=center>2.50&nbsp; </TD>
    <TD width="16%"
      align=right>856,000 </TD>
    <TD width="16%"
      align=right>11,300&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left>Total&nbsp;Proven&nbsp; </TD>
    <TD width="16%"
      align=right>&nbsp;717,000&nbsp; </TD>
    <TD width="16%"
      align=center>289&nbsp; </TD>
    <TD width="16%"
      align=center>0.98&nbsp; </TD>
    <TD width="16%"
      align=right>6,652,000 </TD>
    <TD width="16%"
      align=right>22,700&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD colSpan=6
      align=left><B>Probable </B></TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left>&nbsp;Guanacevi&nbsp; </TD>
    <TD width="16%"
      align=right>&nbsp;815,800&nbsp; </TD>
    <TD width="16%"
      align=center>237&nbsp; </TD>
    <TD width="16%"
      align=center>0.40&nbsp; </TD>
    <TD width="16%"
      align=right>6,219,000 </TD>
    <TD width="16%"
      align=right>10,500&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left>&nbsp;Guanajuato&nbsp; </TD>
    <TD width="16%"
      align=right>&nbsp;100,000&nbsp; </TD>
    <TD width="16%"
      align=center>158&nbsp; </TD>
    <TD width="16%"
      align=center>2.20&nbsp; </TD>
    <TD width="16%"
      align=right>508,000 </TD>
    <TD width="16%"
      align=right>7,100&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left>Total&nbsp;Probable&nbsp; </TD>
    <TD width="16%"
      align=right>&nbsp;915,800&nbsp; </TD>
    <TD width="16%"
      align=center>228&nbsp; </TD>
    <TD width="16%"
      align=center>0.60&nbsp; </TD>
    <TD width="16%"
      align=right>6,727,000 </TD>
    <TD width="16%"
      align=right>17,600&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Total Proven &amp;
      Probable </B></TD>
    <TD width="16%" align=right><B>1,632,800 </B></TD>
    <TD width="16%" align=center>255 </TD>
    <TD width="16%" align=center>0.77 </TD>
    <TD width="16%" align=right><B>13,379,000</B> </TD>
    <TD width="16%" align=right><B>40,300
</B></TD></TR></TABLE><BR>

<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="80%">

  <TR vAlign=top>
    <TD colSpan=6
      align=left><B>Resources Indicated</B> <B></B></TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left><B>Description&nbsp;&nbsp;</B> </TD>
    <TD width="16%"
      align=center><B>Tonnes&nbsp;</B> </TD>
    <TD width="16%"
      align=center><B>Ag&nbsp;g/t&nbsp;</B> </TD>
    <TD width="16%"
      align=center><B>Au&nbsp;g/t&nbsp;</B> </TD>
    <TD width="16%"
      align=center><B>Ag&nbsp;oz&nbsp;</B> </TD>
    <TD width="16%"
      align=center>&nbsp;<B>Au&nbsp;oz&nbsp;</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left><B>Indicated&nbsp;</B> </TD>
    <TD width="16%"
      align=center>&nbsp;&nbsp; </TD>
    <TD width="16%"
      align=center>&nbsp;&nbsp; </TD>
    <TD width="16%"
      align=center>&nbsp;&nbsp; </TD>
    <TD width="16%"
      align=center>&nbsp;&nbsp; </TD>
    <TD width="16%"
      align=center>&nbsp;&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left>&nbsp;Guanacevi&nbsp; </TD>
    <TD width="16%"
      align=right>1,653,700&nbsp; </TD>
    <TD width="16%"
      align=center>258&nbsp; </TD>
    <TD width="16%"
      align=center>0.56&nbsp; </TD>
    <TD width="16%"
      align=right>13,719,000 </TD>
    <TD width="16%"
      align=right>29,600&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Guanajuato&nbsp; </TD>
    <TD width="16%" align=right>1,443,000&nbsp; </TD>
    <TD width="16%" align=center>163&nbsp; </TD>
    <TD width="16%" align=center>2.18&nbsp; </TD>
    <TD width="16%" align=right>7,554,000 </TD>
    <TD width="16%" align=right>101,100&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD
      align=left>Total&nbsp;Indicated&nbsp; </TD>
    <TD width="16%"
      align=right>3,096,700&nbsp; </TD>
    <TD width="16%"
      align=center>214&nbsp; </TD>
    <TD width="16%"
      align=center>1.31&nbsp; </TD>
    <TD width="16%"
      align=right>21,273,000 </TD>
    <TD width="16%"
      align=right>130,700&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left><B>Total&nbsp;Indicated&nbsp;</B> </TD>
    <TD width="16%"
      align=right><B>3,096,700&nbsp;</B> </TD>
    <TD width="16%"
      align=center><B>214&nbsp;</B> </TD>
    <TD width="16%"
      align=center><B>1.31&nbsp;</B> </TD>
    <TD width="16%"
      align=right><B>21,273,000</B> </TD>
    <TD width="16%"
      align=right><B>130,700&nbsp;</B> </TD>
  </TR></TABLE><BR>

<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="80%">

  <TR vAlign=top>
    <TD colSpan=6
      align=left><B>Resources Inferred </B></TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left><B>Description&nbsp;</B> </TD>
    <TD width="16%"
      align=center><B>Tonnes&nbsp;</B> </TD>
    <TD width="16%"
      align=center><B>Ag&nbsp;g/t&nbsp;</B> </TD>
    <TD width="16%"
      align=center><B>Au&nbsp;g/t&nbsp;</B> </TD>
    <TD width="16%"
      align=center><B>Ag&nbsp;oz&nbsp;</B> </TD>
    <TD width="16%"
      align=right><B>Au&nbsp;oz&nbsp;</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Guanacevi&nbsp;</TD>
    <TD width="16%"
      align=right>1,426,000&nbsp; </TD>
    <TD width="16%"
      align=center>261&nbsp; </TD>
    <TD width="16%"
      align=center>0.60&nbsp; </TD>
    <TD width="16%"
      align=right>11,982,000 </TD>
    <TD width="16%"
      align=right>27,500&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Guanajuato&nbsp;    </TD>
    <TD width="16%"
      align=right>1,475,000&nbsp; </TD>
    <TD width="16%"
      align=center>155&nbsp; </TD>
    <TD width="16%"
      align=center>2.11&nbsp; </TD>
    <TD width="16%"
      align=right>7,345,000 </TD>
    <TD width="16%"
      align=right>100,000&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left><B>Total&nbsp;Inferred&nbsp;</B> </TD>
    <TD width="16%"
      align=right><B>2,901,000&nbsp;</B> </TD>
    <TD width="16%"
      align=center><B>207&nbsp;</B> </TD>
    <TD width="16%"
      align=center><B>1.37&nbsp;</B> </TD>
    <TD width="16%"
      align=right><B>19,327,000</B> </TD>
<TD width="16%"
      align=right><B>127,500&nbsp;</B> </TD>
  </TR></TABLE>
<P align=center>13</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_14></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P style="MARGIN-LEFT: 20%"
align=justify><B>Silver-Gold-Lead-Zinc&nbsp;Resources&nbsp;(as&nbsp;of&nbsp;December&nbsp;31,&nbsp;2010)&nbsp;</B></P>

<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="80%">

  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;
      &nbsp;<B>Description&nbsp;</B> </TD>
    <TD width="12%"
      align=center><B>Tonnes&nbsp;</B> </TD>
    <TD width="12%"
      align=center><B>Ag&nbsp;g/t&nbsp;</B> </TD>
    <TD width="12%"
      align=center><B>Au&nbsp;g/t&nbsp;</B> </TD>
    <TD width="12%"
      align=center><B>Ag&nbsp;oz&nbsp;</B> </TD>
    <TD width="12%"
      align=center><B>Au&nbsp;oz&nbsp;</B> </TD>
    <TD width="12%"
      align=center><B>Pb&nbsp;%&nbsp;</B> </TD>
    <TD width="12%"
      align=center><B>Zn%&nbsp;</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD colSpan=8
      align=left><B>Resources Indicated </B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Guanacevi&nbsp;</TD>
    <TD width="12%"
      align=right>655,200&nbsp; </TD>
    <TD width="12%"
      align=right>166&nbsp; </TD>
    <TD width="12%"
      align=right>&nbsp;0.21&nbsp; </TD>
    <TD width="12%"
      align=right>3,497,000&nbsp; </TD>
    <TD width="12%" align=right>4,500    </TD>
    <TD width="12%"
      align=right>0.61&nbsp; </TD>
    <TD width="12%"
      align=right>1.02&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Parral&nbsp; </TD>
    <TD width="12%"
      align=right>1,631,000&nbsp; </TD>
    <TD width="12%"
      align=right>49&nbsp; </TD>
    <TD width="12%"
      align=right>&nbsp;0.90&nbsp; </TD>
    <TD width="12%"
      align=right>2,590,000&nbsp; </TD>
    <TD width="12%"
      align=right>47,200 </TD>
    <TD width="12%"
      align=right>2.87&nbsp; </TD>
    <TD width="12%"
      align=right>2.86&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left><B>Total&nbsp;Indicated&nbsp;</B> </TD>
    <TD width="12%"
      align=right><B>2,286,200&nbsp;</B> </TD>
    <TD width="12%"
      align=right><B>83&nbsp;</B> </TD>
    <TD width="12%"
      align=right>&nbsp;<B>0.70&nbsp;</B> </TD>
    <TD width="12%"
      align=right><B>6,087,000&nbsp;</B> </TD>
    <TD width="12%"
      align=right><B>51,700</B> </TD>
    <TD width="12%"
      align=right><B>2.22&nbsp;</B> </TD>
    <TD width="12%"
      align=right><B>2.33&nbsp;</B> </TD>
  </TR></TABLE><BR>

<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="80%">

  <TR vAlign=top>
    <TD
      align=center><B>Description&nbsp;</B> </TD>
    <TD width="12%"
      align=center><B>Tonnes&nbsp;</B> </TD>
    <TD width="12%"
      align=center><B>Ag&nbsp;g/t&nbsp;</B> </TD>
    <TD width="12%"
      align=center><B>Au&nbsp;g/t&nbsp;</B> </TD>
    <TD width="12%"
      align=center><B>Ag&nbsp;oz&nbsp;</B> </TD>
    <TD width="12%"
      align=center><B>Au&nbsp;oz&nbsp;</B> </TD>
    <TD width="12%"
      align=center><B>Pb&nbsp;%&nbsp;</B> </TD>
    <TD width="12%"
      align=center><B>Zn%&nbsp;</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD colSpan=8
      align=left><B>Resources Inferred </B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Guanacevi&nbsp;</TD>
    <TD width="12%"
      align=right>644,100&nbsp; </TD>
    <TD width="12%"
      align=right>125&nbsp; </TD>
    <TD width="12%"
      align=right>&nbsp; &nbsp;0.14&nbsp; </TD>
    <TD width="12%"
      align=right>2,582,000&nbsp; </TD>
    <TD width="12%" align=right>3,000    </TD>
    <TD width="12%"
      align=right>1.15&nbsp; </TD>
    <TD width="12%"
      align=right>2.13&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Parral&nbsp; </TD>
    <TD width="12%"
      align=right>1,302,900&nbsp; </TD>
    <TD width="12%"
      align=right>63&nbsp; </TD>
    <TD width="12%"
      align=right>&nbsp; &nbsp;0.88&nbsp; </TD>
    <TD width="12%"
      align=right>2,659,000&nbsp; </TD>
    <TD width="12%"
      align=right>36,900 </TD>
    <TD width="12%"
      align=right>2.55&nbsp; </TD>
    <TD width="12%"
      align=right>2.28&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left>Arroyo&nbsp;Seco&nbsp; </TD>
    <TD width="12%"
      align=right>738,200&nbsp; </TD>
    <TD width="12%"
      align=right>220&nbsp; </TD>
    <TD width="12%"
      align=right>&nbsp; &nbsp;0.07&nbsp; </TD>
    <TD width="12%"
      align=right>5,221,000&nbsp; </TD>
    <TD width="12%" align=right>1,700    </TD>
    <TD width="12%"
      align=right>0.65&nbsp; </TD>
    <TD width="12%"
      align=right>0.18&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left><B>Total&nbsp;Indicated&nbsp;</B> </TD>
    <TD width="12%"
      align=right><B>2,685,200&nbsp;</B> </TD>
    <TD width="12%"
      align=right><B>121&nbsp;</B> </TD>
    <TD width="12%"
      align=right>&nbsp; &nbsp;<B>0.48&nbsp;</B> </TD>
    <TD width="12%"
      align=right><B>10,462,000&nbsp;</B> </TD>
    <TD width="12%"
      align=right><B>41,600</B> </TD>
    <TD width="12%"
      align=right><B>1.69&nbsp;</B> </TD>
<TD width="12%"
      align=right><B>1.67&nbsp;</B> </TD>
  </TR></TABLE>
<P align=justify>Notes:&nbsp;&nbsp;</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1. </TD>
    <TD>
      <P
      align=justify>Reserve&nbsp;cut-off&nbsp;at&nbsp;Guanacevi&nbsp;is&nbsp;122&nbsp;
      g/t&nbsp;Ag&nbsp;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2. </TD>
    <TD>
      <P
      align=justify>Reserve&nbsp;cut-off&nbsp;at&nbsp;Guanajuato&nbsp;is&nbsp;102&nbsp;g/t&nbsp;Ag&nbsp;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3. </TD>
    <TD>
      <P
    align=justify>Mining&nbsp;width&nbsp;is&nbsp;1.5&nbsp;meters&nbsp;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">4. </TD>
    <TD>
      <P
      align=justify>Dilution&nbsp;is&nbsp;15%&nbsp;after&nbsp;it&nbsp;has&nbsp;been&nbsp;diluted&nbsp;to&nbsp;a&nbsp;minimum&nbsp;mining&nbsp;width&nbsp;if&nbsp;required&nbsp;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">5. </TD>
    <TD>
      <P
      align=justify>Resource&nbsp;cut-off&nbsp;for&nbsp;the&nbsp;Guanacevi&nbsp;and&nbsp;
      Guanajuato&nbsp;projects&nbsp;is&nbsp;100&nbsp;Ag&nbsp;eq&nbsp;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">6. </TD>
    <TD>
      <P
      align=justify>Resource&nbsp;Silver&nbsp;equivalent&nbsp;is&nbsp;50:1&nbsp;for&nbsp;Silver&nbsp;to&nbsp;Gold&nbsp;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">7. </TD>
    <TD>
      <P
      align=justify>Reserve&nbsp;Silver&nbsp;equivalent&nbsp;is&nbsp;62:1&nbsp;for&nbsp;Silver&nbsp;to&nbsp;Gold&nbsp;which&nbsp;is&nbsp;the&nbsp;three&nbsp;year&nbsp;trailing&nbsp;average&nbsp;
      ratio&nbsp;as&nbsp;required&nbsp;in&nbsp;the&nbsp;reserve&nbsp;estimation&nbsp;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">8. </TD>
    <TD>
      <P
      align=justify>At&nbsp;the&nbsp;Parral&nbsp;project&nbsp;a&nbsp;cut-off&nbsp;using&nbsp;NSR&nbsp;of&nbsp;$40&nbsp;is&nbsp;used&nbsp;with&nbsp;the&nbsp;prices&nbsp;listed&nbsp;below&nbsp;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">9. </TD>
    <TD>
      <P
      align=justify>The&nbsp;cut-off&nbsp;used&nbsp;for&nbsp;Arroyo&nbsp;Seco&nbsp;was&nbsp;100&nbsp;g/t&nbsp;Ag&nbsp;</P></TD></TR></TABLE>
<P align="center"><B>Net Smelter Return (NSR) Cut-off
Parameters for the Parral Project </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=1 cellSpacing=0 borderColor=#000000 cellPadding=3 width="60%">

  <TR vAlign=top>
    <TD bgColor=#eeeeee
      align=center><B>Description</B> </TD>
  <TD bgColor=#eeeeee width="50%"
    align=center><B>Parameter</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Gold Price </TD>
    <TD width="50%" align=left>US
      $1,000 per oz </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff
      align=left>Silver Price </TD>
  <TD bgColor=#ffffff width="50%"
    align=left>US $16 per oz </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff
      align=left>Lead Price </TD>
  <TD bgColor=#ffffff width="50%"
    align=left>US $0.65 per lb </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff
      align=left>Zinc Price </TD>
  <TD bgColor=#ffffff width="50%"
    align=left>US $0.65 per lb </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff
      align=left>Gold Recovery (Overall) </TD>
  <TD bgColor=#ffffff width="50%"
    align=left>75% </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff
      align=left>Silver Recovery (Overall) </TD>
  <TD bgColor=#ffffff width="50%"
    align=left>71% </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff
      align=left>Lead Recovery (Overall) </TD>
  <TD bgColor=#ffffff width="50%"
    align=left>80% </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff
      align=left>Zinc Recovery (Overall) </TD>
  <TD bgColor=#ffffff width="50%"
    align=left>74% </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Smelter Terms </TD>
    <TD width="50%" align=left>Based
on generic contract </TD>
  </TR></TABLE>
<P align=center>14</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_15></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><U>CONSOLIDATED FINANCIAL RESULTS</U> </B></P>
<P align=justify><B><U>Selected Annual Information</U> </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid"
    colSpan=9 align=left>In thousand on dollars except for per share amounts
    </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-LEFT: #000000 2px solid">&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid"
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>Year Ended </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>Year Ended </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>Year Ended </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>December 31, </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>December 31, </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>December 31, </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%" align=center>2010
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%" align=center>2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%" align=center>2008
    </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-RIGHT: #000000 1px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-LEFT: #000000 2px solid">&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid"
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>Revenue </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;86,510 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;50,769 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;39,302 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-LEFT: #000000 2px solid">&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid"
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff align=left>Net
      income (loss): </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=left>&nbsp; </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; &nbsp;(i)
      Total </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;7,079 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;(1,926</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;(18,004</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid"  width="2%"
    align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;(ii) Basic per share </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;0.11 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;(0.04</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;(0.37</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; &nbsp;(iii)
      Diluted per share </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;0.10 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;(0.04</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;(0.37</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid"  width="2%"
    align=left>) </TD></TR>
  <TR>
    <TD style="BORDER-LEFT: #000000 2px solid" bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" bgColor=#e6efff
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>Dividends per share
    </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="10%" align=right>&nbsp;- </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      width="10%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      width="10%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      width="10%">&nbsp; </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-RIGHT: #000000 1px solid"
    bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>December 31, </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>December 31, </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="10%" align=center>December 31, </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
    align=center>2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    width="1%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
    align=center>2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    width="1%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="10%"
    align=center>2008 </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-RIGHT: #000000 1px solid"  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD
    align=left bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 2px solid">Total assets </TD>
    <TD  width="1%"
    align=left bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="10%"
      align=right bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;188,423 </TD>
    <TD  width="2%"
    align=left bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD  width="1%"
    align=left bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="10%"
      align=right bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;105,881 </TD>
    <TD  width="2%"
    align=left bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD  width="1%"
    align=left bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="10%"
      align=right bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;67,292 </TD>
<TD
     width="2%" align=left bgcolor="#E6EFFF"
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid">&nbsp;</TD>
  </TR></TABLE>
<P align=justify><B><U>Review of Consolidated Financial Results</U>
</B></P>
<P align=justify><B>Year ended December 31, 2010 compared with the year ended
December 31, 2009 </B></P>
<P align=justify>For the year ended December 31, 2010, the Company&#146;s Mine
Operating Earnings were $29.6 million (2009: $10.0 million) on Sales of $86.5
million (2009: $50.8 million) with Cost of Sales of $41.5 million (2009: $29.5
million) and Depreciation and Depletion of $15.4 million (2009: $11.3 million).
</P>
<P align=justify>Operating Earnings were $14.0 million (2009: $0.01 million)
after Exploration costs of $4.3 million (2009: $2.4 million), General and
Administrative costs of $5.5 million (2009: $4.3 million), Accretion of
Convertible Debentures of $1.1 million (2009: $1.5 million) and Stock Based
Compensation costs of $4.7 million (2009: $1.8 million).</P>
<P align=justify>Earnings Before Taxes were $16.5 million (2009: $2.2 million)
after Foreign Exchange Gain of $1.1 million (2009: Foreign Exchange Loss of $1.0
million), $0.2 million Gain on Marketable Securities (2009: $0.02 million), a
Mark to Market Gain on redemption call option of $0.7 million (2009: $2.7
million), which relates to the change in fair value of the redemption call
option of the convertible debt prior to its conversion, and Investment and Other
Income of $0.5 million (2009: $0.5 million). The Company realized Net Earnings
for the period of $7.1 million (2009: Net Loss of $1.9 million) after an Income
Tax Provision of $9.4 million (2009: $4.1 million). </P>
<P align=justify>Sales of $86.5 million for the period represent a 70% increase
over the $50.8 million for the same period in 2009 due to increased production
as well as increased realized silver and gold prices during the year. During the
period, the Company sold 3,260,729 oz silver and 18,192 oz gold, for realized
prices of $19.62 and $1,238 per oz respectively as compared to sales of
2,497,517 oz silver and 11,831 oz gold for realized prices of $15.49 and $1,020
per oz respectively in the same period of 2009. The realized prices of $19.62
per oz for silver and $1,238 per oz for gold are 3% lower and 1% higher than the
average 2010 spot prices of $20.19 per oz and $1,224 per oz respectively due to
the timing of the sales. The Company also accumulated 136,311 oz silver and 95
oz gold concentrate finished goods at December 31, 2010 as compared to 146,859 oz
silver and 1,730 oz gold at December 31, 2009. The cost allocated to these
Finished Goods is $2.4 million compared to $1.8 million at December 31, 2009.</P>
<P align=center>15</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_16></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify>Cost of Sales for the period was $41.5 million, an increase of
41% over the Cost of Sales of $29.5 million for the same period of 2009. The 41%
increase in the cost of sales is primarily a result of the Company&#146;s rising
production, as throughput increased 32%, while the Company experienced added
cost pressures related to increased labour, pumping and power costs at Guanacevi
as the North Porvenir mine continues to depth. Depreciation and Depletion was
$15.4 million, an increase of 36% compared to $11.3 million for 2009, primarily
due to increased production and increased capital asset balances due to capital
investments made during 2009 and 2010.</P>
<P align=justify>Exploration expenses increased to $4.3 million from $2.4
million in 2009 reflecting the Company&#146;s increase in exploration activities
during the period. In early 2009, exploration activities were curtailed to
conserve cash and focus on mine development and capital expenditures whereas for
2010 the Company pursued a more aggressive exploration program. General and
Administrative expenses increased by 28% to $5.5 million for the period as
compared to $4.3 million in 2009 primarily due to an increase in the foreign
exchange translation of Canadian dollar denominated expenses as well as
additional legal cost associated with the bid for Cream Minerals Ltd and an
expanded insurance program. The Company recognized $1.1 million of accretion
expense on the carrying value of outstanding convertible debentures compared to
$1.5 million in 2009. The decrease in expense is due to the debentures being
outstanding for less time in 2010 with a decreased balance outstanding due to
conversions during the year. By September 15, 2010 all debentures were fully
converted. Stock-based compensation for 2010 was $4.7 million compared to $1.8
million in 2009. The increase is primarily due to a large number of non-vested
shares being cancelled in 2009 and the 2010 options being granted at a higher
exercise price, which increases the valuation under the Black Scholes option
pricing model.</P>
<P align=justify>The Company experienced a Foreign Exchange Gain of $1.1 million
as compared to a Loss of $1.0 million for the same period in 2009. The $1.1 gain
is primarily due to the strengthening of the Canadian Dollar against the US
Dollar resulting in higher valuations on the Canadian Dollar cash accounts,
which had significantly higher balances during 2010.</P>
<P align=justify>There was a Mark to Market Gain on Redemption Call option of
$0.7 million (2009: $2.7 million) relating to the Company&#146;s redemption call
option on the convertible debt. The 2010 amount represents the increase in the
estimated value of the redemption call option from January 1<SUP>st</SUP> to the
final conversions on September 15<SUP>th</SUP> based on market conditions and
the balance outstanding during the period and the amount for 2009 was for the
entire year and was based on a larger number of debentures outstanding.
Investment and Other income were consistent with $0.5 million in 2010 and 2009.
There was an Income Tax Provision of $9.4 million as compared to $4.1 million
for 2009. The change in the income tax provision is due to the increased
profitability of the Company. Income taxes are primarily incurred by the
Company&#146;s Mexican subsidiaries. </P>
<P align=center>16</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B>Fourth quarter 2010 compared with fourth quarter 2009
</B></P>
<P align=justify>For the three months ended December 31, 2010, the Company&#146;s
Mine Operating Earnings were $12.1 million (2009: $8.2 million) on Sales of
$28.4 million (2009: $24.2 million) with Cost of Sales of $11.2 million (2009:
$11.4 million) and Depreciation and Depletion of $5.1 million (2009: $4.6
million). </P>
<P align=justify>Operating Earnings were $8.2 million (2009: $4.4 million) after
Exploration costs of $0.9 million (2009: $1.2 million), General and
Administrative costs of $2.0 million (2009: $1.3 million), Accretion of
Convertible Debentures of $Nil (2009: $0.4 million) and Stock Based Compensation
costs of $1.0 million (2009: $0.9 million).</P>
<P align=justify>Earnings Before Taxes were $9.4 million (2009: $7.3 million)
after Foreign Exchange Gain of $1.0 million (2009: Loss of $0.1 million), a Mark
to Market Gain on redemption call option of $Nil (2009: $2.7 million), which
relates to the redemption call option of the convertible debt, and Investment
and Other Income of $0.2 million (2009: $0.3 million). The Company realized Net
Earnings for the period of $5.6 million (2009: $1.3 million) after an Income Tax
Provision of $3.8 million (2009: $4.1 million). </P>
<P align=justify>Sales of $28.4 million for the period represent a 17% increase
over the $24.2 million for the same period in 2009 due to increased production
as well as increased realized silver and gold prices during the period. During
the quarter, the Company sold 851,094 oz silver and 5,799 oz gold, for realized
prices of $24.16 and $1,365 per oz respectively as compared to sales of
1,009,035 oz silver and 5,539 oz gold for realized prices of $17.95 and $1,108
per oz respectively in the same period of 2009. The Q4 2010 realized prices of
$24.16 per oz for silver was 8% lower than the quarterly average spot price of
$26.42 per oz and the realized price for gold of $1,365 per oz was less than 1%
lower than the quarterly average spot price of $1,367 per oz due to the timing
of the sales. </P>
<P align=justify>Cost of Sales for the quarter was $11.2 million, a decrease of
2% over the Cost of Sales of $11.4 million for the same period in 2009. The 2%
decrease in the cost of sales is primarily a result of improved productivity at
the Guanacevi and Guanajuato mines. Depreciation and Depletion was $5.1 million,
an increase of 11% compared to $4.6 million for the same period in 2009,
primarily due to increased production and increased capital asset balances due
to capital investments made during 2009 and 2010. </P>
<P align=justify>Exploration expenses decreased to $0.9 million in Q4, 2010 from
$1.2 million in Q4, 2009 due to the timing of activities. General and
Administrative expenses increased by 54% to $2.0 million for the quarter as
compared to $1.3 million in the same period in 2009 primarily due to an increase
in the foreign exchange translation of Canadian dollar denominated expenses as
well as additional legal costs associated with the bid for Cream Minerals Ltd
and higher insurance costs. The Company recognized $Nil on accretion of
convertible debentures compared to $0.4 million in 2009. The absence of
accretion expense in Q4 2010 is a result of all convertible debentures being
converted by September 15, 2010. Stock-based compensation for the fourth quarter
remained consistent with the same period in 2009 with $1.0 million recognized in
the last quarter of both years.</P>
<P align=justify>The Company experienced a Foreign Exchange Gain of $1.0 million
as compared to a Foreign Exchange Loss of $0.1 million for the same period in
2009. The Q4, 2010 gain is primarily due to the weakening of the US Dollar
against the Canadian Dollar resulting in higher valuations on the Canadian
Dollar cash amounts, which had significantly higher balances at the end of 2010
than 2009.</P>
<P align=center>17</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_18></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify>There was a Mark to Market Gain on Redemption Call option of
$Nil (2009: $2.7 million) relating to the Company&#146;s redemption call option on
the convertible debt. The 2009 amount represented the increase in the estimated
value of the call option based on the market conditions and the redemption
options on the convertible debt, was deemed to have no material fair value prior
to the beginning of Q4 2009. As the convertible debt was not outstanding in Q4
2010 no amount was incurred in the current quarter. Investment and other income
decreased slightly to $0.2 million in 2010 from $0.3 million in 2009 primarily
as a result of decreased interest income due to lower cash balances during the
early part of Q4 2010 compared to Q4 2009. There was an Income Tax Provision of
$3.8 million as compared to $4.1 million in Q4, 2009.</P>
<P align=justify><B><I>Summary of Quarterly Results </I></B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD
    style="BORDER-LEFT: #000000 2px solid; BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
    align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" colSpan=10
    align=center>Dec. 31, 2010 </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" colSpan=10
    align=center>Dec. 31, 2009 </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
    align=left>(in US$000s except per share amounts) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" colSpan=10
    align=center>Period End </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" colSpan=10
    align=center>Period End </TD>
    <TD
    style="BORDER-BOTTOM: #000000 2px solid; BORDER-RIGHT: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%" align=center>Dec
      31 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%" align=center>Sep
      30 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%" align=center>Jun
      30 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%" align=center>Mar
      31 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%" align=center>Dec
      31 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%" align=center>Sep
      30 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%" align=center>Jun
      30 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="7%" align=center>Mar
      31 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Total Revenues </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    align=right>&nbsp;28,475 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    align=right>&nbsp;20,091 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    align=right>&nbsp;19,692 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    align=right>&nbsp;18,252 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    align=right>&nbsp;24,250 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    align=right>&nbsp;9,796 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    align=right>&nbsp;8,236 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    align=right>&nbsp;8,487 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cost of Sales </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>11,223 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>10,858 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>10,267 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>9,166 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>11,439 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>6,516 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>5,640 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>5,883 </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Depreciation, Depletion &amp; Accretion </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    align=right>5,141 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    align=right>3,977 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    align=right>3,028 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    align=right>3,301 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    align=right>4,563 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    align=right>1,997 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    align=right>2,414 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    align=right>2,290 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Mine Operating
      Earnings / (Loss)* </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>&nbsp;12,111 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>&nbsp;5,256 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>&nbsp;6,397 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>&nbsp;5,785 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>&nbsp;8,248 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>&nbsp;1,283 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>&nbsp;182 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=right>&nbsp;314 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net income (loss): </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;(i) Total </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;5,644 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;127 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(412</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;1,720 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;3,133 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(1,487</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(1,832</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(1,740</TD>
    <TD bgColor=#e6efff align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;(ii) Basic per share </TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;0.09 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;0.00 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;(0.01</TD>
    <TD align=left>) </TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;0.03 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;0.06 </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;(0.03</TD>
    <TD align=left>) </TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;(0.04</TD>
    <TD align=left>) </TD>
    <TD align=left>$</TD>
    <TD align=right>&nbsp;(0.03</TD>
    <TD align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;(iii) Diluted per share </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;0.08 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;0.00 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(0.01</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;0.03 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;0.06 </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(0.03</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(0.04</TD>
    <TD bgColor=#e6efff align=left>) </TD>
    <TD bgColor=#e6efff align=left>$</TD>
    <TD bgColor=#e6efff align=right>&nbsp;(0.03</TD>
    <TD bgColor=#e6efff align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=24 align=left>*
      Earnings from mine operations is a non-GAAP measure used by the Company as
      a measure of operating performance </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid"
    align=left>&nbsp;</TD>
  </TR></TABLE>
<P align=justify><B><I>Quarterly Trends and Analysis </I></B></P>
<P align=justify>In the 1<SUP>st</SUP> quarter of 2009, the Company&#146;s decrease
in production compared to the prior quarter was offset by improved silver and
gold prices. The Company&#146;s operating costs continued to benefit from the
depreciation of the Mexican Peso against the US dollar, while General and
Administrative costs reported also benefited from the depreciation of the
Canadian dollar against the US dollar.</P>
<P align=justify>In the 2<SUP>nd</SUP> quarter of 2009, the Company experienced
a slight increase in production over the previous quarter but the significant
increase in finished goods inventory at the end of the period resulted in
decreased sales revenue. The Company&#146;s operating costs also decreased from the
previous quarter accordingly.</P>
<P align=justify>In the 3<SUP>rd</SUP> quarter of 2009, the Company experienced
a 13% increase in production over the previous quarter. There was an increase in
sales due to both an increase in sold ounces and more robust silver and gold
prices during the period, with a corresponding increase in operating costs. The
increase in sales was in addition to a further increase in finished goods
inventory from the prior quarter. </P>
<P align=justify>In the 4<SUP>th</SUP> quarter of 2009, the Company had a
significant increase in sales over previous quarters. The increase in sales is
due to 3 main factors: an increase in the price of silver and gold; an increase
in production; and the timing of finished goods sales. During the Q4, 2009,
there was an increase in production of 18% for silver and 27% for gold over the
previous quarter and more robust silver and gold prices. The Company also
accumulated a large finished goods inventory at September 30, 2009 which was
converted to sales during Q4, 2009 resulting in a significant increase in cost
of sales and depreciation and depletion for the quarter. </P>
<P align=justify>In the 1<SUP>st</SUP> quarter of 2010, the Company continued to
experience an increase in sales over previous quarters, with the exception of
Q4, 2009 where sales reflected the realization of the sale of a large finished
goods balance produced in Q3, 2009. Silver production experienced a 2% decrease
from Q4, 2009 but was a significant increase compared to prior periods. </P>
<P align=center>18</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_19></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify>In the 2<SUP>nd</SUP> quarter of 2010, the Company continued to
experience an increase in sales over the previous quarter, with the Company
achieving the highest quarterly production at that time with a robust silver
price. Silver production experienced a 41% increase from the same period in 2009
and an 8% increase from Q1, 2010. The Company experienced a $0.4 million net
loss during the quarter as compared to net income of $1.7 million in the first
quarter of 2010 primarily due to the $1.0 million in additional stock-based
compensation, $0.5 million in additional exploration expenditures and a $0.5
million foreign exchange loss experienced during the quarter. </P>
<P align=justify>In the 3<SUP>rd</SUP> quarter of 2010, the Company experienced
increased sales over the previous quarter. Although the consolidated production
was slightly lower than the previous quarter the Company sold more silver ounces
in Q3 than Q2 and silver and gold prices remained robust. The Company
experienced net income of $0.1 million as compared to a net loss of $0.4 million
in the previous quarter, primarily due to reductions in exploration and
stock-based compensation expenses totalling $0.5 million. </P>
<P align=justify>In the 4<SUP>th</SUP> quarter of 2010, the Company once again
realized increased sales over the previous quarter and achieved record
production, while silver and gold prices remained robust. Due to the additional
sales and increased silver and gold prices, the Company had net income of $5.6
million as compared to a net income of $0.1 million in the previous quarter.
</P>
<P align=justify><B><U>Transactions with Related Parties</U> </B></P>
<P align=justify>The Company shares common administrative services and office
space with Canarc Resource Corp., Caza Gold Corp., Aztec Metals Corp. (&#147;Aztec&#148;)
and Parallel Resources Ltd, who are related party companies by virtue of having
common directors, from time to time Endeavour will incur third-party costs on
behalf of the related parties on a full cost recovery basis. The Company has
$104,000 receivable related to administration costs outstanding as of December
31, 2010. (December 31, 2009 &#150; $133,000). </P>
<P align=justify>During the year ended December 31, 2010, the Company paid
$388,000 (2009 - $228,000) for legal services to Koffman Kalef LLP, a firm in
which the Company&#146;s Corporate Secretary is a partner. The Company has $39,000
payable related to legal costs outstanding as of December 31, 2010 (December 31,
2009 $5,000) </P>
<P align=justify>The Company has $114,000 receivable from Aztec related to 2008
property tax payments and the initial Rio Chico option payment outstanding as of
December 31, 2010 (December 31, 2009 - $110,000).</P>
<P align=justify><B><U>Update on Use of Proceeds from Recent
Financings</U> </B></P>
<P align=justify>On October 7, 2009, the Company received net proceeds of
Cdn$17.3 million from a prospectus offering of units. Based on the October 7,
2009 noon exchange rate reported by the Bank of Canada of Cdn$1.00 = US$0.9417,
this amount was equivalent to US$16.4 million. As disclosed in the Company&#146;s
short form prospectus dated September 28, 2009, US$12 million of the net
proceeds from this offering were intended to be used for capital expenditures
and exploration drilling at the Guanacevi and Guanajuato Mines projects as set
out in the table below, with the balance of US$4.4 million to be used for
working capital.</P>
<P align=justify>Planned expenditures for mine development were to be funded
first from the financing proceeds and subsequently by operating cash flow and as
of Q1, 2010 the allocated amounts were fully utilized and any additional
expenditures have been financed from operating cash flows. The expenditures on
the plant refurbishment and equipment at Guanacevi were higher than the planned
expenditures by $724,295 as at December 31, 2010, with all budgeted work now
completed. Expenditures have been higher than budgeted for the crusher and
leach-ccd and the work on the electrical substation is still ongoing. The
estimated cost for the crusher was $800,000 but expenditures have totalled $1.6
million. The cost overruns for the crusher are primarily due to a longer than
anticipated time frame for completion, additional removal and fill costs for the
foundation, additional geotechnical support costs and higher than anticipated
costs for the hilficher walk. The estimated cost for the leach-ccd was $1.36
million but expenditures have totalled $1.6 million. The cost overruns for the
leach-ccd are due to the replacement requiring a slightly longer time frame and there was more material
      than estimated that required extraction from the tanks. The electrical
      substation came in $430,000 under budget with an original budget of
      $762,000 and actual costs of $332,000. The miscellaneous equipment planned
      for Guanajuato has been fully purchased and is under budget by $210,000
      due to lower than anticipated costs. The planned exploration drilling for
      the Porvenir Cuatro, Santa Fe, Noche Buena and Porvenir mine areas of
      Guanacevi and the South Bolanitos, North Cebada and North Bolanitos areas
      of Guanajuato have been completed with no material variance, with the
      exception of the exploration in the Porvenir Mine area where management
      decided to expand the program. As of December 31, 2010 all of the
allocated proceeds have been utilized. </P>
<P align=center>19</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_20></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP. </B></TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis </B></TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010 </B></TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted) </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011
</B></TD></TR></TABLE><BR>

<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=center><B>Expected </B></TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="11%" align=center><B>Actual </B></TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="11%" align=center><B>Variance </B></TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Use of proceeds </B></TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=center><B>(US$) </B></TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="11%" align=center><B>(US$) </B></TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="11%" align=center><B>(US$) </B></TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Mine Development - Guanacevi </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>3,000,000 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>3,000,000 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Mine Development - Guanajuato </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>1,000,000 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>1,000,000 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Plant Refurbishment &amp; equipment &#150;
      Guanacevi &amp; Guanajuato </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>3,000,000 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>3,724,295 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>(724,295</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Miscellaneous Equipment - Guanajuato </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>1,000,000 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>790,000 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>210,000 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Exploration drilling &#150; Guanacevi (Porvenir
      Cuatro) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>600,000 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>643,160 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>(43,160</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Exploration drilling &#150; Guanacevi (Santa Fe) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>200,000 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>206,975 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>(6,975</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Exploration drilling &#150; Guanacevi (Noche
      Buena) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>600,000 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>620,927 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>(20,927</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Exploration drilling &#150; Guanacevi (Porvenir Mine) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>600,000 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>831,725 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>231,725 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><FONT color=#c0c0c0><FONT
      color=#000000>Exploration drilling &#150; Guanajuato (South Bolanitos)
      </FONT></FONT></TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>800,000 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>806,573 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>(6,573</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Exploration drilling &#150; Guanajuato (North Cebada) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>900,000 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>940,826 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>(40,826</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><FONT color=#c0c0c0><FONT
      color=#000000>Exploration drilling &#150; Guanajuato (North Bolanitos)
      </FONT></FONT></TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>300,000 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>326,197 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>26,197 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Total </B></TD>
    <TD  width="1%" align=left><B>$</B></TD>
    <TD width="11%" align=right><B>12,000,000 </B></TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left><B>$</B></TD>
    <TD width="11%" align=right><B>12,890,678 </B></TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left><B>$</B></TD>
    <TD width="11%" align=right><B>&nbsp;890,678 </B></TD>
<TD  width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=justify>On December 1, 2010, the Company received net proceeds of
Cdn$50.1 million from a prospectus offering of units. Based on the December 1,
2010 noon exchange rate reported by the Bank of Canada of Cdn$1.00 = US$0.9843,
this amount was equivalent to US$49.3 million. As disclosed in the Company&#146;s
short form prospectus dated November 24, 2010, US$35 million of the net proceeds
from this offering were intended to be used for mine development and plant
expansions at the Guanacevi and Guanajuato Mines projects, exploration and
potential acquisitions as set out in the table below, with the balance of
US$14.3 million to be used for working capital. As of December 31, 2010 none of
the allocated expenditures have been made as they are budgeted for 2011 or
beyond. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=center><B>Expected </B></TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="11%" align=center><B>Actual </B></TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="11%" align=center><B>Variance </B></TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Use of proceeds </B></TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=center><B>(US$) </B></TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="11%" align=center><B>(US$) </B></TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="11%" align=center><B>(US$) </B></TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Mine Development &#150; Guanacevi &amp;
      Guanajuato </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>11,000,000 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Plant expansion &#150; Guanacevi &amp; Guanajuato </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>7,000,000 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Exploration </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>7,000,000 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="11%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Potential acquisitions </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>10,000,000 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Total </B></TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="11%" align=right><B>35,000,000 </B></TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="11%" align=right><B>&nbsp;- </B></TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="11%" align=right><B>&nbsp;- </B></TD>
    <TD bgColor=#e6efff  width="2%"
  align=left>&nbsp;</TD></TR></TABLE>
<P align=center>20</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_21></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><U>LIQUIDITY AND CAPITAL RESOURCES</U> </B></P>
<P align=justify>Cash and cash equivalents increased by $41.3 million from $26.7
million at December 31, 2009 to $68.0 million at December 31, 2010. The Company
had working capital of $102.2 million at December 31, 2010 (December 31, 2009 -
$38.8 million). The increase in cash and cash equivalents of $41.3 million is
primarily due to the $49.3 million raised on the December 2010 prospectus
offering, $32.7 million provided from operations, $7.9 million received on the
exercise of stock options and share purchase warrants and net proceeds from
investments in marketable securities of $2.2 million offset by $30.2 million
used for capital investments made in property, plant and equipment, $20.0
million invested in short-term investments and $1.0 million paid in interest.
The $63.4 million increase in working capital is primarily a result of the
increases in cash of $41.3 million, short term investments of $20.0 million,
notes receivable of $1.1 million, accounts receivable and prepaids of $2.8
million and inventory of $6.9 million offset by a decrease in marketable
securities of $2.0 million and increases in accounts payable of $4.2 million and
income tax payable of $2.7 million.</P>
<P align=justify>Operating activities provided $32.7 million during 2010
compared to providing $12.2 million during 2009. The significant non-cash
adjustments to net income of $7.1 million were for depreciation, depletion of
$15.4 million, stock-based compensation of $4.7 million, accretion charge on
convertible debentures of $1.1 million, a future income tax expense of $6.1
million, a mark to market gain on redemption call option of $0.7 million and an
increase in non-cash working capital of $0.7 million. The increase in non-cash
working capital is primarily due to increased accounts receivable and prepaids
and increased inventories offset by increased accounts payable and accrued
liabilities and income taxes payable. </P>
<P align=justify>Investing activities during the year used $47.6 million as
compared to $19.1 million in 2009 with investments in property, plant and
equipment totalling $30.2 million compared to $17.1 million in 2009 and $20.0
million invested in short term investments compared to $Nil in 2009. During 2010
there was $1.0 million invested in marketable securities with $3.2 million in
proceeds received on sales as compared to $2.4 million invested and proceeds
received of $0.6 million in 2009. The Company also received $0.4 million during
the 2010 year on the return of property bonds on non-essential properties. </P>
<P align=justify>The Company invested a total of $32.9 million in property,
plant and equipment during 2010, of which $30.2 million was paid in cash, $2.4
million was settled through common shares and $0.3 million was deferred to
property costs relating to the increase in the asset retirement obligation.
Approximately $19.4 million was invested at Guanacevi with $10.3 million spent
on mine development, $6.5 million spent on the plant, including $1.2 million
spent on the tailings facility and $4.3 million spent on the plant expansion
project which includes the upgrade to the crushing circuit, $2.3 million on mine
equipment (primarily pumps), $0.2 million in vehicles and $0.1 million on
building upgrades and office equipment. Approximately $10.6 million was invested
at Guanajuato with $8.3 million spent on mine development, $0.3 million on
various plant projects, $1.6 million on mine equipment, $0.1 million spent on
vehicles and $0.3 million spent on building upgrades and office equipment. There
was an additional $0.2 million spent on corporate assets primarily on
exploration vehicles and software. The $2.4 million settled through the issuance
of common shares was for property acquisition costs incurred primarily for the
acquisition of the San Pedro and Porvenir Cuatro properties. </P>
<P align=justify>Financing activities during the 2010 year generated $56.3
million as compared to $30.0 million during 2009. The primary source of
financing in 2010 was a prospectus offering completed on December 1, 2010 where
a total of 8,710,000 common shares were issued at CAN $6.15 per common share for
gross proceeds of CAN $53.6 million. After payment of a 5% cash commission to
the underwriters and other share issuance costs the Company received net
proceeds of approximately $49.3 million. During 2010 there was $4.1 million
realized from the exercise of stock options, $3.9 million realized from the
exercise of share purchase warrants and $1.0 million interest paid on the
Convertible Debentures. During 2009, the primary financing activities were the
completion of a convertible debt financing for $10.0 million, net of issue
costs, and equity issued through a short form prospectus and a private placement
generating $19.4 million. </P>
<P align=center>21</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_22></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify>As of August 26, 2010, the Company&#146;s share price was greater
than CAN $2.85 per share, therefore the Company provided redemption notice to
all debenture holders providing ten business days to convert all outstanding
debentures. At the time of notice there were 7,874 debentures remaining and
subsequently were all converted for 4,144,189 common shares and 2,072,079
warrants. During fiscal 2010 a total of 6,658,382 common shares and 3,329,168
warrants were issued on conversion of convertible debentures. See &#147;Convertible
Debentures&#148;.</P>
<P align=justify>As at December 31, 2010, the Company&#146;s issued share capital was
$183.3 million representing 80,720,420 common shares compared to $112.2 million
representing 60,626,203 common shares at December 31, 2009. Of the 20,094,217
common shares issued during the period, 8,710,000 were issued on public
offering, 6,658,382 were issued upon conversion of convertible debentures,
1,762,500 were issued upon stock option exercises, 2,142,761 were issued on
exercise of warrants, 642,204 were issued on the acquisition of a mineral
property, 41,500 were issued under the Company&#146;s stock bonus plan and 136,870
were issued upon the exercise of stock options as share appreciation rights.
</P>
<P align=justify>As at December 31, 2010, the Company had 4,665,000 options to
purchase common shares outstanding with a weighted average exercise price of CAN
$3.17 and had 6,842,140 share purchase warrants outstanding with a weighted
average exercise price of CAN $2.82. </P>
<P align=justify>At December 31, 2010 the Company held certain Notes with a
market value of $3.6 million that were obtained in February 2009 from the
restructuring of Canadian Asset Backed Commercial Paper (&#147;ABCP&#148;). The ABCP was
purchased in a Canaccord Capital account in August 2007 with a par value CAN
$5.2 million. At the dates at which the Company acquired the investments, the
non-bank sponsored ABCP was rated RI (High) by Dominion Bond Rating Services
(&#147;DBRS&#148;), the highest credit rating issued for commercial paper. In August 2007,
the ABCP market experienced liquidity problems and was subsequently frozen. See
&#147;Investment in Notes Receivable&#148; for further detail.</P>
<P align=justify><B><U>Contingencies</U> </B></P>
<P align=justify>Minera Santa Cruz y Garibaldi SA de CV, a subsidiary of
Endeavour, received a $19.1 million assessment on October 12<SUP>th</SUP>, 2010
by Mexican fiscal authorities for failure to provide the appropriate support for
certain expense deductions in the 2006 tax return. During the audit process the
Company retained a big four accounting firm and external counsel to expedite the
audit process and to ensure the delivery of the appropriate documentation. Based
on the advice of our tax advisors and legal counsel, it is the Company&#146;s view
that it provided the appropriate documentation and support for the expenses and
the tax assessment has no legal merit. As a result of a detailed review by the
Company of its accounting records and available information to support the
deductions taken, the Company has estimated a potential tax exposure of $80,000,
plus an estimated additional interest and penalties of $80,000, for which the
Company has made a provision in the consolidated financial statements for the
period ended December 31<SUP>st</SUP> 2010. The Company has commenced the appeal
process. </P>
<P align=justify>The 2006 tax return of Refinadora Plata Guancevi SA de CV, a
subsidiary of Endeavour, is currently being audited by the Mexican fiscal
authorities. The Company was delayed in providing certain requested
documentation and the Mexican fiscal authorities froze the subsidiary&#146;s bank
accounts. In consulting with external legal counsel, the Company appealed the
actions taken by the Mexican tax authorities through the federal circuit court
which ruled that the bank freeze was unconstitutional. After the ruling, the
court instructed the Mexican authorities to unfreeze the bank accounts, which
occurred shortly after year end.</P>
<P align=justify>The bank freeze did not affect the Company&#146;s ability to carry
on business, however the Company did not have access to $1.8 million during that
time and the Mexican fiscal authorities&#146; actions impacted the timely refund of
value added tax.</P>
<P align=justify>During the audit process the Company retained external legal
counsel to ensure the delivery of the appropriate documentation to the Mexican
fiscal authorities. As a result of a detailed review of the Company&#146;s 2006
financial information and delivery of appropriate requested documents to
the Mexican fiscal authorities, the Company has estimated that there is no
significant remaining potential tax exposure. </P>
<P align=center>22</P>
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width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><U>Capital Requirements</U> </B></P>
<P align=justify>The Company plans to invest a total of $36.7 million on capital
projects in 2011 at the Guanacevi and Guanajuato operations, with the focus on
expanding the Guanajuato plant to 1,000 tpd acquiring additional mining
equipment for Guanajuato, installing a dry stack tailings plant at Guanacevi and
carrying out additional drilling at both mines.</P>
<P align=justify>At Guanacevi, a total of $21.8 million is planned for the
continued expansion and improvement of operations. $8.1 million is planned to
develop the Santa Cruz and Porvenir Cuatro ore-bodies and extend access into the
North Porvenir ore-body, $6.0 million is planned for a tailings filtration plant
and continued upgrade of the plant circuit, and $7.2 million for underground
mine equipment, primarily related pump station expansions to facilitate the
continued underground expansion and a power station upgrade. The remaining
balance of $0.5 million is planned for various support infrastructure at
Guanacevi. </P>
<P align=justify>At Guanajuato, a total of $14.9 million is planned for the
continued expansion and improvement of operations. $6.5 million in planned to
further develop the Lucero, Karina and Bolanitos veins. $5.2 million is planned
for the expansion of the plant from its current capacity of 600 tpd to 1000 tpd.
The plant expansion is expected to be completed in Q3 2011. To facilitate the
expanded capacity of the plant, an additional $2.6 million is planned on
underground equipment and $0.6 million is planned for other infrastructure
support at Guanajuato.</P>
<P align=justify>These planned expenditures are expected to be financed from
mine operating cash flows and current cash balances. </P>
<P align=justify><B><U>Financial Instruments and Other Instruments</U>
</B></P>
<P align=justify><B>Financial Assets and Liabilities </B></P>
<P align=justify>The Company&#146;s financial instruments consist of cash and cash
equivalents, short term investments, marketable securities, receivables, notes
receivable, accounts payable, accrued liabilities, and a promissory note
payable. Cash and cash equivalents and short term investments are designated as
held for trading and therefore carried at fair value, with the unrealized gain
or loss recorded in income. Receivables are designated as loan receivables and
accounts payables, accrued liabilities, and promissory note are designated as
other financial liabilities and recorded at amortized cost. Marketable
securities and notes receivable are available for sale with the unrealized gain
or loss recorded in other comprehensive income. Interest income and expense are
both recorded in income.</P>
<P align=justify>The fair value hierarchy establishes three levels to classify
inputs to the valuation techniques used to measure fair value. Level 1 inputs
are quoted market prices (unadjusted) in active markets for identical assets or
liabilities. Level 2 inputs are inputs other than quoted market prices included
in Level 1 that are observable for the asset or liability, either directly or
indirectly. Level 3 inputs are unobservable (supported by little or no market
activity). </P>
<P align=justify>Cash and cash equivalents and short term investments are stated
at fair value and are classified as Level 1 of the fair value hierarchy. The
fair values of accounts receivables, accounts payable and accrued liabilities
are approximate carrying value because of the short term nature of these
instruments.</P>
<P align=justify>The fair value of available for sale marketable securities and
notes receivable are determined based on a market approach reflecting the
closing price of each particular security at the closing balance sheet date. The
closing price is a quoted market price obtained from the exchange that is the
principal active market for the particular security, and therefore available for
sale securities are classified within Level 1 of the fair value hierarchy. </P>
<P align=justify>In the prior years, the fair value of the notes receivable was
determined by discounting the stream of future payments at the estimated
prevailing market rates and were classified within Level 2 as of December 31,
2009.</P>
<P align=center>23</P>
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width="100%" noShade>
<!--$$/page=--><A name=page_24></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify>Prior to the successful restructuring of the asset backed
commercial paper in January 2009, the asset backed commercial paper inputs were
unobservable and therefore classified as Level 3 of the fair value hierarchy.
</P>
<P align=justify>The Company had issued convertible debentures which were
outstanding until September 2010 and which were designated as other financial
liabilities and recorded at amortized cost. The fair values of the convertible
debentures were determined as described on page 25 and were classified within
Level 2 while outstanding. </P>
<P align=justify><B>Financial Instrument Risk Exposure and Risk Management
</B></P>
<P align=justify>The Company is exposed in varying degrees to a variety of
financial instrument related risks. The Board approves and monitors the risk
management process. The types of risk exposure and the way in which such
exposure is managed is provided as follows: </P>
<P align=justify><B>Credit Risk</B> <BR>The Company is exposed to credit risk on
its bank accounts, short-term investments, notes receivable and IVA receivable
balance. Credit risk exposure on bank accounts and short term investments is
limited through maintaining the Company&#146;s balances with high-credit quality
financial institutions, maintaining investment policies, assessing institutional
exposure and continual discussion with external advisors. The notes receivable
credit risk exposure is limited by continual discussion with external advisors.
IVA receivables are generated on the purchase of supplies and services to
produce silver which are refundable from the Mexican government.</P>
<P align=justify><B>Liquidity Risk <BR></B>The Company ensures that there is
sufficient capital in order to meet short term business requirements. The
Company&#146;s policy is to invest cash at floating rates of interest, which cash
reserves are to be maintained in cash equivalents in order to maintain liquidity
after taking into account the Company&#146;s holdings of cash equivalents, short term
investments, marketable securities and receivables. The Company believes that
these sources, operating cash flow and its policies will be sufficient to cover
the likely short term cash requirements and commitments. </P>
<P align=justify><B>Market Risk <BR></B>The significant market risk exposures to
which the Company&#146;s financial instruments are subject to are foreign exchange
risk, interest rate risk and commodity price risk.</P>
<P align=justify><B>Foreign Currency Risk <BR></B>The Company&#146;s operations in
Mexico and Canada make it subject it to foreign currency fluctuations. The
Company&#146;s operating expenses are primarily incurred in Mexican pesos and
Canadian dollars, and the fluctuation of the US dollar in relation to these
currencies will consequently have an impact upon the profitability of the
Company and may also affect the value of the Company&#146;s assets and the amount of
shareholders&#146; equity. The Company&#146;s convertible debentures were issued in
Canadian dollars and related interest expense was incurred in Canadian dollars.
The Company has not entered into any agreements or purchased any instruments to
hedge possible currency risks. </P>
<P align=justify><B>Interest Rate Risk<I> <BR></I></B>In respect of
financial assets, the Company&#146;s policy is to invest cash at floating rates of
interest and cash reserves are to be maintained in cash equivalents in order to
maintain liquidity. Fluctuations in interest rates impact the value of cash
equivalents.</P>
<P align=justify>With respect to financial liabilities, the promissory note is
not subject to interest rate risk given the fixed rate of 10% per annum. </P>
<P align=center>24</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_25></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><U>Investment in Notes Receivable (Previously &#147;Asset Backed
Commercial Paper&#148;)</U></B> </P>
<P align=justify>At December 31, 2010 the Company held Canadian dollar
denominated restructured Asset Backed Commercial Paper Notes (the &#147;Notes&#148;) that
were obtained in February 2009 from the restructuring of Canadian Asset Backed
Commercial Paper (&#147;ABCP&#148;).</P>

<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="90%" align="center">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    align=left><B>$ 000's</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="13%" align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="13%" align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="13%" align=center>CAN $ </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="13%" align=center><B>Dec 31, 2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="1%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
    width="13%" align=center>Dec 31, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 2px solid"
     width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Notes </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%"
      align=center>Maturity Dates </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%"
      align=center>Interest Rate </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%" align=center>Face
      Amount </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%"
      align=center><B>Market Value</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="13%"
      align=center>Market Value </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>MAV II Class A-1 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="13%" align=left>July 15, 2056 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="13%" align=left>BA - 0.5% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="13%" align=right>&nbsp;3,219 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="13%" align=right><B>&nbsp;2,334</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="13%" align=right>&nbsp;1,629 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>MAV II Class A-2 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=left>July 15, 2056 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=left>BA - 0.5% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=right>1,093 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=right><B>705</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=right>525 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>MAV II Class B </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="13%" align=left>July 15, 2056 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="13%" align=left>BA - 0.5% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="13%" align=right>198 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="13%" align=right><B>84</B> </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="13%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>MAV II Class C </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=left>July 15, 2056 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=left>BA + 20.0% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=right>140 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=right><B>15</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="13%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>IA
      Tracking Class 15 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="13%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="13%"
    align=left>BA - 0.5% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="13%"
    align=right>464 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="13%"
    align=right><B>413</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="13%"
    align=right>322 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="13%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="13%" align=left>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="13%"
      align=right>&nbsp;5,114 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="13%"
      align=right><B>&nbsp;3,551</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="13%"
      align=right>&nbsp;2,476 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P align=justify>During the first quarter of 2010, the trade activity of the MAV
II trust and the IA tracking note class 15 significantly increased providing a
more liquid market, permitting the Company to estimate the value of the Notes
based on current market activity bids. Effective January 1, 2010, the Company
marks to market the Notes based on trade market bids. The mark to market of the
Notes results in a gain of $1,075,000 during the year ended December 31, 2010.
The Notes are classified as Level 1 of the fair value hierarchy, a change from
December 31, 2009 where the Notes were classified within the Level 2 fair value
hierarchy, as the Company then used inputs other than quoted market prices
included in Level 1 that were either directly or indirectly observable for the
asset in estimating fair value. </P>
<P align=justify>In 2009, the Company estimated the value using a basic
discounted cash flow model assuming principal would be repaid between 2013 and
2016, interest earned at banker acceptance less 50 bps, and a 12% discount rate.
This resulted in an estimated fair value of $2,476,000 at December 31, 2009.
</P>
<P align=justify>In 2008, the Company assessed the estimated fair value of its
ABCP and based on the available information at the time regarding market
conditions, the underlying assets and the indicative values contained in the
report issued by JP Morgan, recorded an additional impairment charge of
$1,394,000. The Company estimated the value using a basic discounted cash flow
model assuming principal would be repaid between 2013 and 2016, interest earned
at banker acceptance less 50 bps, using a 12% discount rate. This impairment
charge resulted in an estimated fair value of $2,115,000 and a total impairment
charge to the original investment of $2,721,000 as a $1,327,000 impairment
charge was taken in 2007. </P>
<P align=justify>The Company has classified the Notes as available for sale.
Management has recorded the Notes at their estimated fair market value with the
impact of fair value fluctuations and any related foreign exchange gains or
losses recognized in other comprehensive income, unless such gains or losses are
declines in value that are concluded to be other than temporary, in which case
the declines will be charged to operations.</P>
<P align=justify><B><U>Convertible Debentures</U> </B></P>
<P align=justify>In February 2009, the Company issued CAN $13,993,000 in 10%
subordinated unsecured convertible redeemable debentures (the &#147;Debentures&#148;)
maturing February 2014. The interest was 10% annually, paid quarterly in
arrears. At any time, each Debenture could be converted by the holder into one
unit consisting of one common share of the Company and one half of one common
share purchase warrant at an initial conversion rate of 526.3 units for each CAN
$1,000 Debenture, representing an initial conversion price of CAN $1.90 per
unit. Additional units would have become issuable following the occurrence of
certain corporate acts or events. Each full share purchase warrant entitles the
holder to purchase one common share at an exercise price of CAN $2.05 per share.
Subsequent to August 26, 2010, each Debenture could be redeemed by the Company
for cash, plus a redemption fee of 7%, provided that the closing share price is
greater than CAN $2.85 per share.</P>
<P align=center>25</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_26></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify>As the Debentures include both cash payment and equity
conversion features, the gross proceeds were allocated between liability and
equity elements. The liability element was designated as other liabilities and
was recognized at amortized cost. The related transaction costs are allocated on
a proportional basis. The transaction costs associated with the liability
portion of the Debentures were deferred and amortized over their expected term.
</P>
<P align=justify>As of August 26, 2010, the Company&#146;s share price was greater
than CAN $2.85 per share, therefore the Company provided redemption notice to
all debenture holders providing ten business days to convert all outstanding
Debentures. At the time of notice there were 7,874 Debentures remaining and
subsequently were all converted for 4,144,189 common shares and 2,072,079
warrants. During fiscal 2010 a total of 6,658,382 common shares and 3,329,168
warrants were issued on conversion of the Debentures.</P>
<P align=justify>As at August 26, 2010, the redemption option was valued at
$2,233,500 using a binomial lattice model with a volatility estimate of 65%,
risk free rate of 1.8% and estimated borrowing rate of 11.2% over the life of
the Debentures (December 31, 2009 - $2,693,000). The redemption option was
designated as held for trading and market fluctuations were charged to
operations. For the period ended December 31, 2010 a gain of $703,280 (September
30, 2009 - $Nil) was recorded, while on conversion of Debentures $3,396,280
(September 30, 2009 - $Nil) was allocated to equity. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="90%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=center><B>CAN
      $</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=center><B>US
      $</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Liability portion of convertible
      debentures</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Opening balance at 12/31/09 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>8,549 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>8,149 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Opening accrued interest </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>267 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>254 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Accretion expense </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,126 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,088 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Interest accrued </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Interest paid </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(1,010</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(989</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Conversion into common shares </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(8,932</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(8,640</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Foreign exchange
      (gain)/loss on revaluation </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>138
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left><B>Closing balance of liability portion</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Equity portion of convertible
      debentures</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Opening balance at 12/31/09 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,699 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,164 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Conversion into common shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(2,699</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(2,164</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Closing balance
      of equity portion</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%"
      align=right><B>&nbsp;-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%"
      align=right><B>&nbsp;-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Redemption call option on convertible debentures</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Opening balance at 12/31/09 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,825 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,693 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Mark to market gain (loss) on redemption call option </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>687 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>703 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Conversion into common shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(3,512</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(3,396</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Closing balance
      of redemption call option on debentures</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%"
      align=right><B>&nbsp;-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="12%"
      align=right><B>&nbsp;-</B> </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P align=center>26</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_27></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><U>Contractual Obligations</U> </B></P>
<P align=justify>The Company had the following contractual obligations at
December 31, 2010: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" colSpan=6 align=left>Payments
      due by period (in thousands of dollars) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=left>&nbsp;    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=left>&nbsp;    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=left>&nbsp;    </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;
      &nbsp; &nbsp;Contractual Obligations </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center>Total    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center>Less
      than 1 year </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center>1 &#150; 3
      years </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center>3 &#150; 5
      years </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=center>More
      than 5 years </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Operating Lease </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;1,840 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;261 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;551 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;572 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;456 </TD>
  <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Promissory Note </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>301 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>243 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>58 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right>- </TD>
  <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Other Long-Term Liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>2,242 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>758 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>1,484 </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Total </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%" align=right>4,383    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%"
      align=right>&nbsp;504 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%" align=right>1,367    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%" align=right>572</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="11%" align=right>1,940    </TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P align=justify><B><U>Outstanding Share Data</U> </B></P>
<P align=justify>As of March 15, 2011, the Company had the following items
issued and outstanding: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>81,657,937 common shares
  <LI>options to purchase 4,070,000 common shares with a weighted average
  exercise price of CAN$3.20 per share expiring between June 15, 2011 and June
  14, 2017.
  <LI>6,335,267 share purchase warrants with a weighted average exercise price
  of CAN$2.80 per share expiring between October 7, 2011 and February 26, 2014.
  </LI></UL>
<P align=justify>The Company considers the items included in the consolidated
statement of shareholders&#146; equity as capital. The Company&#146;s objective when
managing capital is to safeguard its ability to continue as a going concern so
that it can continue to provide returns for shareholders and benefits for other
stakeholders<B>.</B> The Company manages the capital structure and makes
adjustments to it in light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or adjust the
capital structure, the Company may issue new shares through private placements,
prospectus offerings, convertible debentures, asset acquisitions or return
capital to shareholders. The Company is not subject to externally imposed
capital requirements. </P>
<P align=justify><B><U>ANNUAL OUTLOOK</U> </B></P>
<P align=justify><B>Financial </B></P>
<P align=justify>In 2011, Endeavour anticipates its financial performance will
reflect significantly higher anticipated silver and gold bullion prices, further
increases in production, the augmentation of reserves and resources and a
further reduction in cash costs. Cash operating costs should continue to trend
downward as a result of economies of scale with the planned expansions, however,
this benefit will be partly offset by continued increases in some operating
costs. </P>
<P align=justify><B>Production </B></P>
<P align=justify>Similar to 2010, the first two quarters of silver production in
2011 are scheduled to be relatively flat, as we focus on mine development and
plant expansion capital programs. Silver production is expected to rise again in
the third quarter, as the expansion at Guanajuato is completed.</P>
<P align=justify>The Guanacevi mines are scheduled to produce 1,000 tonnes per
day (tpd) for the entire year. Guanacevi currently draws 80% of its ore
production from the Porvenir Mine and the balance will be from Porvenir Dos,
Porvenir Cuatro and Santa Cruz.</P>
<P align=justify>At Guanajuato, the Lucero vein now contributes 80% of ore
production with the balance coming from Cebada and Bolanitos. The 2011 expansion
of the Guanajuato plant is anticipated to increase capacity from 600 tpd to
1,000 tpd, with completion expected in Q3, 2011. The added plant capacity
should be met with increased production from the Bolanitos and Lucero veins and
initial productions from our 2010 discoveries at Karina and Fernanda.</P>
<P align=center>27</P>
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width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B>Exploration </B></P>
<P align=justify>In 2011 Endeavour plans to push ahead on its exploration
programs at several projects. The Company is presently undertaking an aggressive
$9.2 million, 47,000 meter, 175-hole exploration drill program to test multiple
exploration targets within three of the mining districts and the newly-acquired
properties.</P>
<P align=justify>At Guanacevi, a total of 10,000 meters of diamond drilling is
planned to test several newly discovered veins in the San Pedro area. </P>
<P align=justify>At Guanajuato, drilling will continue at Karina, Fernanda and
Daniela and other prospective areas, with 14,500 meters planned.</P>
<P align=justify>Endeavour will also commence drilling on the San Sebastian
properties acquired last year in Jalisco state, Mexico. Surface sampling has
identified numerous high-grade silver and gold mineralized zones at San
Sebastian that will be tested in 2011. A 6,500 meter program is planned for
2011.</P>
<P align=justify><B><U>SUBSEQUENT EVENTS</U> </B></P>
<P align=justify>On March 14, 2011, the Company transferred the listing of its
common shares from NYSEAmex Equities exchange to the New York Stock Exchange
(NYSE). </P>
<P align=justify><B><U>CHANGES IN ACCOUNTING POLICIES &amp; CRITICAL ACCOUNTING
ESTIMATES</U> </B></P>
<P align=justify><B><U>Changes in Accounting Policies</U> </B></P>
<P align=justify><B>Recently released Canadian accounting standards</B> </P>
<P align=justify>The Company has assessed new and revised accounting
pronouncements that have been issued that are not yet effective and determined
that the following may have a significant impact on the Company: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%">i) </TD>
    <TD>
      <P align=justify>In 2006, the Canadian Accounting Standards Board ("AcSB")
      published a new strategic plan that will significantly affect financial
      reporting requirements for Canadian companies. The AcSB strategic plan
      outlines the convergence of Canadian GAAP with IFRS over an expected five
      year transitional period. In February 2008 the AcSB announced that 2011 is
      the changeover date for publicly-listed companies to use IFRS, replacing
      Canada's own GAAP. The date is for interim and annual financial statements
      relating to fiscal years beginning on or after January 1, 2011. The
      adoption date of January 1, 2011 will require the restatement for
      comparative purposes of amounts reported by the Company for the year ended
      December 31, 2010. See further discussion under&#147;International Financial
      Reporting Standards&#148; on page 41.</P></TD></TR></TABLE>
<P align=center>28</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><U>Critical Accounting Estimates</U> </B></P>
<P align=justify>The preparation of financial statements requires the Company to
make estimates that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Significant areas requiring the use of estimates relate to the
determination of mineralized reserves, valuation of asset back commercial paper,
impairment of long-lived assets, determination of asset retirement obligations,
valuation allowances for future income taxes and assumptions used in determining
the fair value of non-cash based compensation.</P>
<P align=justify><B><I>Mineralized reserves and impairment of long lived assets
<BR></I></B>Management periodically reviews the carrying value of its mineral
properties with internal and external mining related professionals. A decision
to abandon, reduce or expand a specific project is based upon many factors
including general and specific assessments of reserves, anticipated future
prices, anticipated future costs of exploring, developing and operating a
producing mine, expiration term and ongoing expense of maintaining leased
mineral properties and the period for properties with unproven reserves.
However, properties which have not demonstrated suitable mineral concentrations
at the conclusion of each phase of an exploration program are reevaluated to
determine if future exploration is warranted and their carrying values are
appropriate. </P>
<P align=justify>If an area of interest is abandoned or it is determined that
its carrying value cannot be supported by future production or sale, the related
costs are charged against operations in the period of abandonment or
determination that the carrying value exceeds its fair value. The amounts
recorded as mineral properties represent costs incurred to date and do not
necessarily reflect present or future values. </P>
<P align=justify><B><I>Asset retirement obligations <BR></I></B>Reclamation and
closure costs have been estimated based on the Company&#146;s interpretation of
current regulatory requirements, however changes in regulatory requirements and
new information may result in revisions to estimates. The Company recognized the
present value of liabilities for reclamation and closure costs in the period in
which they are incurred. These obligations are measured initially at fair value
and the resulting costs capitalized to the carrying value of the related asset.
In subsequent periods, the liability is adjusted for any changes in the amount
or timing and for the accretion of discounted underlying future cash flows. The
capitalized asset retirement cost is amortized to operations over the life of
the asset. </P>
<P align=justify><B><I>Convertible Debt <BR></I></B>We follow accounting
guidelines in determining the value of the liability and equity components of
the convertible notes, as described in on page 25. The carrying value of the
liability component was determined by discounting the stream of future payments
of interest and principal over a 5 year expected life at the estimated market
rate for a similar liability without the conversion features. The carrying value
of the equity component was measured as the face value of the notes less the
portion relating to the debt component.</P>
<P align=justify><B><I>Future income taxes <BR></I></B>The Company follows the
asset and liability method of accounting for income taxes. Under this method,
future tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases, and losses
carried forward. Future tax assets and liabilities are measured using
substantively enacted or enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are expected to be recovered
or settled. The effect on future tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the substantive
enactment date. Future tax assets are recognized to the extent that they are
considered more likely than not to be realized. The valuation of future income
tax assets is adjusted, if necessary, by the use of a valuation allowance to
reflect the estimated realizable amount. The future income tax provision also
incorporates management&#146;s estimates regarding the utilization of tax loss carry
forwards, which are dependent on future operating performance and
transactions.</P>
<P align=center>29</P>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><I>Stock-based compensation <BR></I></B>The Company has a
share option plan which is described in Note 13(d) of the Company&#146;s consolidated
financial statements. The Company records all stock-based compensation for
options using the fair value method. The fair value of each option award is
estimated on the date of the grant using the Black-Scholes option pricing model,
with expected volatility based on historical volatility of our stock. We use
historical data to estimate the term of the option and the risk free rate for
the expected term of the option is based on the Government of Canada yield curve
in effect at the time of the grant. <B></B></P>
<P align=justify><B><U>RISKS AND UNCERTAINTIES</U> </B></P>
<P align=justify><B><I>Precious and Base Metal Price Fluctuations
<BR></I></B>The profitability of the precious and base metal operations in which
the Company has an interest will be significantly affected by changes in the
market prices of precious and base metals. Prices for precious and base metals
fluctuate on a daily basis, have historically been subject to wide fluctuations
and are affected by numerous factors beyond the control of the Company such as
the level of interest rates, the rate of inflation, central bank transactions,
world supply of the precious and base metals, foreign currency exchange rates,
international investments, monetary systems, speculative activities,
international economic conditions and political developments. The exact effect
of these factors cannot be accurately predicted, but the combination of these
factors may result in the Company not receiving adequate returns on invested
capital or the investments retaining their respective values. Declining market
prices for these metals could materially adversely affect the Company&#146;s
operations and profitability.</P>
<P align=justify><B><I>Fluctuations in the price of consumed commodities
<BR></I></B>Prices and availability of commodities consumed or used in
connection with exploration, development and mining, such as natural gas,
diesel, oil, electricity, cyanide and other reagents fluctuate affecting the
costs of production at our operations. These fluctuations can be unpredictable,
can occur over short periods of time and may have a materially adverse impact on
our operating costs or the timing and costs of various projects. Our general
policy is not to hedge our exposure to changes in prices of the commodities we
use in our business.</P>
<P align=justify><B><I>Foreign Exchange Rate Fluctuations <BR></I></B>Operations
in Mexico and Canada are subject to foreign currency exchange fluctuations. The
Company raises its funds through equity issuances which are priced in Canadian
dollars, and the majority of the exploration costs of the Company are
denominated in United States dollars and Mexican pesos. The Company may suffer
losses due to adverse foreign currency fluctuations.</P>
<P align=justify><B><I>Competitive Conditions <BR></I></B>Significant
competition exists for natural resource acquisition opportunities. As a result
of this competition, some of which is with large, well established mining
companies with substantial capabilities and significant financial and technical
resources, the Company may be unable to either compete for or acquire rights to
exploit additional attractive mining properties on terms it considers
acceptable. Accordingly, there can be no assurance that the Company will be able
to acquire any interest in additional projects that would yield reserves or
results for commercial mining operations.</P>
<P align=justify><B><I>Operating Hazards and Risks <BR></I></B>Mining operations
generally involve a high degree of risk, which even a combination of experience,
knowledge and careful evaluation may not be able to overcome. These risks
include, but are not limited to, the following: environmental hazards,
industrial accidents, third party accidents, unusual or unexpected geological
structures or formations, fires, power outages, labour disruptions, floods,
explosions, cave-ins, land-slides, acts of God, periodic interruptions due to
inclement or hazardous weather conditions, earthquakes, war, rebellion,
revolution, delays in transportation, inaccessibility to property, restrictions
of courts and/or government authorities, other restrictive matters beyond the
reasonable control of the Company, and the inability to obtain suitable or
adequate machinery, equipment or labour and other risks involved in the
operation of mines.</P>
<P align=center>30</P>
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<!--$$/page=--><A name=page_31></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify>Operations in which the Company has a direct or indirect
interest will be subject to all the hazards and risks normally incidental to
exploration, development and production of precious and base metals, any of
which could result in work stoppages, delayed production and resultant losses,
increased production costs, asset write downs, damage to or destruction of mines
and other producing facilities, damage to life and property, environmental
damage and possible legal liability for any or all damages. The Company may
become subject to liability for pollution, cave-ins or hazards against which it
cannot insure or against which it may elect not to insure. Any compensation for
such liabilities may have a material, adverse effect on the Company&#146;s financial
position.</P>
<P align=justify>Our property, business interruption and liability insurance may
not provide sufficient coverage for losses related to these or other hazards.
Insurance against certain risks, including certain liabilities for environmental
pollution, may not be available to us or to other companies within the industry
at reasonable terms or at all. In addition, our insurance coverage may not
continue to be available at economically feasible premiums, or at all. Any such
event could have a material adverse affect on our business.</P>
<P align=justify><B><I>Mining Operations <BR></I></B>The capital costs required
by the Company&#146;s projects may be significantly higher than anticipated. Capital
and operating costs, production and economic returns, and other estimates
contained in the Company&#146;s current technical reports, may differ significantly
from those provided for in future studies and estimates and from management
guidance, and there can be no assurance that the Company&#146;s actual capital and
operating costs will not be higher than currently anticipated. In addition,
delays to construction and exploration schedules may negatively impact the net
present value and internal rates of return of the Company&#146;s mineral properties
as set forth in the applicable technical report. Similarly, there can be no
assurance that historical rates of production, grades of ore processed, rates of
recoveries or mining cash costs will not experience fluctuations or differ
significantly from current levels over the course of the mining operations
conducted by the Company.</P>
<P align=justify>In addition, there can be no assurance that the Company will be
able to continue to extend the production from its current operations through
exploration and drilling programs.</P>
<P align=justify><B><I>Infrastructure <BR></I></B>Mining, processing,
development and exploration activities depend, to one degree or another, on
adequate infrastructure. Reliable roads, bridges, power sources and water supply
are important determinants, which affect capital and operating costs. The lack
of availability on acceptable terms or the delay in the availability of any one
or more of these items could prevent or delay exploitation or development of the
Company&#146;s projects. If adequate infrastructure is not available in a timely
manner, there can be no assurance that the exploitation or development of the
Company&#146;s projects will be commenced or completed on a timely basis, if at all;
the resulting operations will achieve the anticipated production volume, or the
construction costs and ongoing operating costs associated with the exploitation
and/or development of the Company&#146;s advanced projects will not be higher than
anticipated. In addition, unusual or infrequent weather phenomena, sabotage,
government or other interference in the maintenance or provision of such
infrastructure could adversely affect the Company&#146;s operations and
profitability.</P>
<P align=justify><B><I>Exploration and Development <BR></I></B>There is no
assurance given by the Company that its exploration and development programs and
properties will result in the discovery, development or production of a
commercially viable ore body or yield new reserves to replace or expand current
reserves.</P>
<P align=justify>The business of exploration for minerals and mining involves a
high degree of risk. Few properties that are explored are ultimately developed
into producing mines. At this time, apart from the mineral reserves on the
Company&#146;s Guanacevi Mines Project and Guanajuato Mines Project, none of the
Company&#146;s properties have any defined ore-bodies with proven reserves.</P>
<P align=justify>The economics of developing silver, gold and other mineral
properties are affected by many factors including capital and operating costs,
variations of the tonnage and grade of ore mined, fluctuating mineral markets,
and such other factors as government regulations, including regulations
relating to royalties, allowable production, importing and exporting of minerals
and environmental protection. Depending on the prices of silver, gold or other
minerals produced, the Company may determine that it is impractical to commence
or continue commercial production. Substantial expenditures are required to
discover an ore-body, to establish reserves, to identify the appropriate
metallurgical processes to extract metal from ore, and to develop the mining and
processing facilities and infrastructure. The marketability of any minerals
acquired or discovered may be affected by numerous factors which are beyond the
Company&#146;s control and which cannot be accurately foreseen or predicted, such as
market fluctuations, conditions for precious and base metals, the proximity and
capacity of milling and smelting facilities, and such other factors as
government regulations, including regulations relating to royalties, allowable
production, importing and exporting minerals and environmental protection. In
order to commence exploitation of certain properties presently held under
exploration concessions, it is necessary for the Company to apply for an
exploitation concession. There can be no guarantee that such a concession will
be granted. Unsuccessful exploration or development programs could have a
material adverse impact on the Company&#146;s operations and profitability.</P>
<P align=center>31</P>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><I>Calculation of Reserves and Resources and Precious Metal
Recoveries <BR>
</I></B>There is a degree of uncertainty attributable to the
calculation and estimates of reserves and resources and their corresponding
metal grades to be mined and recovered. Until reserves or resources are actually
mined and processed, the quantities of mineralization and metal grades must be
considered as estimates only. Any material change in the quantity of mineral
reserves, mineral resources, grades and recoveries may affect the economic
viability of the Company&#146;s properties.</P>
<P align=justify><B><I>Replacement of Reserves and Resources <BR></I></B>The
Guanacevi and Guanajuato mines are the Company&#146;s current sources of production.
Current life-of-mine plans provide for a defined production life for mining at
the Company&#146;s mines. If the Company&#146;s mineral reserves and resources are not
replaced either by the development or discovery of additional reserves and/or
extension of the life-of-mine at its current operating mines or through the
acquisition or development of an additional producing mine, this could have an
adverse impact on the Company&#146;s future cash flows, earnings, results of
operations and financial condition, including as a result of requirements to
expend funds for reclamation and decommissioning.</P>
<P align=justify><B><I>Acquisition Strategy <BR></I></B>As part of the Company&#146;s
business strategy, it has sought and will continue to seek new mining and
development opportunities in the mining industry. In pursuit of such
opportunities, it may fail to select appropriate acquisition candidates,
negotiate appropriate acquisition terms, conduct sufficient due diligence to
determine all related liabilities or to negotiate favourable financing terms.
The Company may encounter difficulties in transitioning the business, including
issues with the integration of the acquired businesses or its personnel into the
Company. The Company cannot assure that it can complete any acquisition or
business arrangement that it pursues, or is pursuing, on favourable terms, or
that any acquisitions or business arrangements completed will ultimately benefit
its business.</P>
<P align=justify><B><I>Integration of New Acquisitions <BR></I></B>The Company&#146;s
success at completing any acquisitions will depend on a number of factors,
including, but not limited to: identifying acquisitions which fit the Company&#146;s
strategy; negotiating acceptable terms with the seller of the business or
property to be acquired; and obtaining approval from regulatory authorities in
the jurisdictions of the business or property to be acquired.</P>
<P align=justify>If the Company does make further acquisitions, any positive
effect on the Company&#146;s results will depend on a variety of factors, including,
but not limited to: assimilating the operations of an acquired business or
property in a timely and efficient manner; maintaining the Company&#146;s financial
and strategic focus while integrating the acquired business or property;
implementing uniform standards, controls, procedures and policies at the
acquired business, as appropriate; and to the extent that the Company makes an
acquisition outside of markets in which it has previously operated, conducting
and managing operations in a new operating environment and under a new
regulatory regime where it has no direct experience.</P>
<P align=center>32</P>
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style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify>Acquiring additional businesses or properties could place
increased pressure on the Company&#146;s cash flow if such acquisitions involve cash
consideration or the assumption of obligations requiring cash payments. The
integration of the Company&#146;s existing operations with any acquired business will
require significant expenditures of time, attention and funds. Achievement of
the benefits expected from consolidation would require the Company to incur
significant costs in connection with, among other things, implementing financial
and planning systems. The Company may not be able to integrate the operations of
a recently acquired business or restructure the Company&#146;s previously existing
business operations without encountering difficulties and delays. In addition,
this integration may require significant attention from the Company&#146;s management
team, which may detract attention from the Company&#146;s day-to-day operations. Over
the short-term, difficulties associated with integration could have a material
adverse effect on the Company&#146;s business, operating results, financial condition
and the price of the Company&#146;s common shares. In addition, the acquisition of
mineral properties may subject the Company to unforeseen liabilities, including
environmental liabilities.</P>
<P align=justify><B><I>Foreign Operations <BR></I></B>The Company&#146;s operations
are currently conducted through subsidiaries principally in Mexico and, as such,
its operations are exposed to various levels of political, economic and other
risks and uncertainties which could result in work stoppages, blockades of the
Company&#146;s mining operations and appropriation of assets. Some of the Company&#146;s
operations are located in areas where Mexican drug cartels operate. These risks
and uncertainties vary from region to region and include, but are not limited
to, terrorism; hostage taking; local drug gang activities; military repression;
expropriation; extreme fluctuations in currency exchange rates; high rates of
inflation; labour unrest; the risks of war or civil unrest; renegotiation or
nullification of existing concessions, licenses, permits and contracts; illegal
mining; changes in taxation policies; restrictions on foreign exchange and
repatriation; and changing political conditions, currency controls and
governmental regulations that favour or require the awarding of contracts to
local contractors or require foreign contractors to employ citizens of, or
purchase supplies from, a particular jurisdiction.</P>
<P align=justify>Local opposition to mine development projects could arise in
Mexico, and such opposition could be violent. There can be no assurance that
such local opposition will not arise with respect to the Company&#146;s Mexican
operations. If the Company were to experience resistance or unrest in connection
with its Mexican operations, it could have a material adverse effect on its
operations and profitability.</P>
<P align=justify>To the extent the Company acquires mineral properties in
jurisdictions other than Mexico, it may be subject to similar and additional
risks with respect to its operations in those jurisdictions.</P>
<P align=justify><B><I>Government Regulation <BR></I></B>The Company&#146;s
operations, exploration and development activities are subject to extensive
foreign federal, state and local laws and regulations governing such matters as
environmental protection, management and use of toxic substances and explosives,
management of natural resources, health, exploration and development of mines,
production and post-closure reclamation, safety and labour, mining law reform,
price controls import and export laws, taxation, maintenance of claims, tenure,
government royalties and expropriation of property. There is no assurance that
future changes in such regulation, if any, will not adversely affect the
Company&#146;s operations. The activities of the Company require licenses and permits
from various governmental authorities.</P>
<P align=justify>The costs associated with compliance with these laws and
regulations are substantial and possible future laws and regulations, changes to
existing laws and regulations and more stringent enforcement of current laws and
regulations by governmental authorities, could cause additional expenses,
capital expenditures, restrictions on or suspensions of the Company&#146;s operations
and delays in the development of its properties. Moreover, these laws and
regulations may allow governmental authorities and private parties to bring
lawsuits based upon damages to property and injury to persons resulting from the
environmental, health and safety practices of the Company&#146;s past and current
operations, or possibly even those actions of parties from whom the Company
acquired its mines or properties, and could lead to the imposition of
substantial fines, penalties or other civil or criminal sanctions. The Company
retains competent and well trained individuals and consultants in jurisdictions
in which it does business, however, even with the application of considerable skill the Company may
inadvertently fail to comply with certain laws. Such events can lead to
financial restatements, fines, penalties, and other material negative impacts on
the Company.</P>
<P align=center>33</P>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><I>Mexican Tax Assessments <BR>
</I></B>As disclosed under
&#147;Contingencies&#148;, one of the Company&#146;s subsidiaries in Mexico has received a tax
assessment from Mexican fiscal authorities while another subsidiary&#146;s 2006 tax
return is currently being audited by Mexican fiscal authorities. While the
Company is of the view that the tax assessment has no legal merit and is
contesting this, there is no assurance that the Company will be successful or
that the Company will not have to pay the full amount of the assessment plus
interest and penalties. In the event the Company is unsuccessful, this could
negatively impact the Company&#146;s financial position and create difficulties for
the Company in the future in dealing with Mexican fiscal authorities. As a
result of a detailed review of the Company&#146;s 2006 financial information and
delivery of appropriate requested documents to the Mexican fiscal authorities,
the Company has estimated that there is no significant potential tax exposure. </P>
<P align=justify><B><I>Obtaining and Renewing of Government Permits
<BR></I></B>In the ordinary course of business, the Company is required to
obtain and renew government permits for the operation and expansion of existing
operations or for the development, construction and commencement of new
operations. Obtaining or renewing the necessary governmental permits is a
complex and time-consuming process involving numerous jurisdictions and possibly
involving public hearings and costly undertakings on the Company&#146;s part. The
duration and success of the Company&#146;s efforts to obtain and renew permits are
contingent upon many variables not within its control including the
interpretation of applicable requirements implemented by the permitting
authority. The Company may not be able to obtain or renew permits that are
necessary to its operations, or the cost to obtain or renew permits may exceed
what the Company believes it can recover from a given property once in
production. Any unexpected delays or costs associated with the permitting
process could delay the development or impede the operation of a mine, which
could adversely impact the Company&#146;s operations and profitability.</P>
<P align=justify><B><I>Environmental Factors <BR></I></B>All phases of the
Company&#146;s operations are subject to environmental regulation in the various
jurisdictions in which it operates. Environmental legislation is evolving in a
manner which will require stricter standards and enforcement, increased fines
and penalties for non-compliance, more stringent environmental assessments of
proposed projects and a heightened degree of responsibility for companies and
their officers, directors and employees. There is no assurance that any future
changes in environmental regulation, will not adversely affect the Company&#146;s
operations. The costs of compliance with changes in government regulations have
the potential to reduce the profitability of future operations. Environmental
hazards that may have been caused by previous or existing owners or operators
may exist on the Company&#146;s mineral properties, but are unknown to the Company at
the present.</P>
<P align=justify><B><I>Title to Assets <BR></I></B>Although the Company has or
will receive title opinions for any properties in which it has a material
interest, there is no guarantee that title to such properties will not be
challenged or impugned. The Company has not conducted surveys of the claims in
which it holds direct or indirect interests and, therefore, the precise area and
location of such claims may be in doubt. The Company&#146;s claims may be subject to
prior unregistered agreements or transfers or native land claims and title may
be affected by unidentified or unknown defects. The Company has conducted as
thorough an investigation as possible on the title of properties that it has
acquired or will be acquiring to be certain that there are no other claims or
agreements that could affect its title to the concessions or claims. If title to
the Company&#146;s properties is disputed it may result in the Company paying
substantial costs to settle the dispute or clear title and could result in the
loss of the property, which events may affect the economic viability of the
Company.</P>
<P align=justify><B><I>Uncertainty of Funding <BR></I></B>The Company has
limited financial resources, and the mineral claims in which the Company has an
interest or an option to acquire an interest require financial expenditures to
be made by the Company. There can be no assurance that adequate funding will be
available to the Company so as to exercise its option or to maintain its
interests once those options have been exercised. Further exploration work and
development of the properties in which the Company has an interest or option to
acquire depend upon the Company&#146;s ability to obtain financing through joint
venturing of projects, debt financing or equity financing or other means.
Failure to obtain financing on a timely basis could cause the Company to forfeit
all or parts of its interests in mineral properties or reduce or terminate its
operations.</P>
<P align=center>34</P>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><I>Agreements with Other Parties <BR>
</I></B>The Company has
entered into agreements with other parties relating to the exploration,
development and production of its properties. The Company may, in the future, be
unable to meet its share of costs incurred under agreements to which it is a
party, and the Company may have its interest in the properties subject to such
agreements reduced as a result. Furthermore, if other parties to such agreements
do not meet their share of such costs, the Company may be unable to finance the
costs required to complete recommended programs.</P>
<P align=justify><B><I>Employee Recruitment and Retention <BR></I></B>Recruiting
and retaining qualified personnel is critical to the Company&#146;s success. The
Company is dependent on the services of key executives including the Company&#146;s
President and Chief Executive Officer and other highly skilled and experienced
executives and personnel focused on managing the Company&#146;s interests. The number
of persons skilled in acquisition, exploration, development and operation of
mining properties are limited and competition for such persons is intense. As
the Company&#146;s business activity grows, the Company will require additional key
financial, administrative and mining personnel as well as additional operations
staff. We could experience increases in our recruiting and training costs and
decreases in our operating efficiency, productivity and profit margins. If we
are not able to attract, hire and retain qualified personnel, the efficiency of
our operations could be impaired, which could have an adverse impact on the
Company&#146;s future cash flows, earnings, results of operations and financial
condition.</P>
<P align=justify><B><I>Potential Conflicts of Interest <BR></I></B>The directors
and officers of the Company may serve as directors and/or officers of other
public and private companies, and may devote a portion of their time to manage
other business interests. This may result in certain conflicts of interest. To
the extent that such other companies may participate in ventures in which the
Company is also participating, such directors and officers of the Company may
have a conflict of interest in negotiating and reaching an agreement with
respect to the extent of each company&#146;s participation. The laws of British
Columbia, Canada, require the directors and officers to act honestly, in good
faith, and in the best interests of the Company and its shareholders. However,
in conflict of interest situations, directors and officers of the Company may
owe the same duty to another company and will need to balance the competing
obligations and liabilities of their actions.</P>
<P align=justify>There is no assurance that the needs of the Company will
receive priority in all cases. From time to time, several companies may
participate together in the acquisition, exploration and development of natural
resource properties, thereby allowing these companies to: (i) participate in
larger properties and programs; (ii) acquire an interest in a greater number of
properties and programs; and (iii) reduce their financial exposure to any one
property or program. A particular company may assign, at its cost, all or a
portion of its interests in a particular program to another affiliated company
due to the financial position of the company making the assignment. In
determining whether or not the Company will participate in a particular program
and the interest therein to be acquired by it, it is expected that the directors
and officers of the Company will primarily consider the degree of risk to which
the Company may be exposed and its financial position at that time.</P>
<P align=justify><B><I>Third Party Reliance <BR></I></B>The Company&#146;s rights to
acquire interests in certain mineral properties have been granted by third
parties who themselves may hold only an option to acquire such properties. As a
result, the Company may have no direct contractual relationship with the
underlying property holder.</P>
<P align=center>35</P>
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width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><I>Absolute Assurance on Financial Statements <BR></I></B>We
prepare our financial reports in accordance with accounting policies and methods
prescribed by Canadian generally accepted accounting principles. In the
preparation of financial reports, management may need to rely upon assumptions,
make estimates or use their best judgment in determining the financial condition
of the Company. Significant accounting policies and practices are described in
more detail in the notes to our annual consolidated financial statements for the
year ended December 31, 2010. In order to have a reasonable level of assurance
that financial transactions are properly authorized, assets are safeguarded
against unauthorized or improper use and transactions are properly recorded and
reported, we have implemented and continue to analyze our internal control
systems for financial reporting. Although we believe our financial reporting and
financial statements are prepared with reasonable safeguards to ensure
reliability, we cannot provide absolute assurance in that regard.
<B><I></I></B></P>
<P align=justify><B><I>General Economic Conditions <BR></I></B>The unprecedented
events in global financial markets during the last few years have had a profound
effect on the global economy. Many industries, including the gold and silver
mining industry, are affected by these market conditions. Some of the key
effects of the current financial market turmoil include contraction in credit
markets resulting in a widening of credit risk, devaluations and high volatility
in global equity, commodity, foreign exchange and precious metal markets, and a
lack of market liquidity. A continued or worsened slowdown in the financial
markets or other economic conditions, including but not limited to, consumer
spending, employment rates, business conditions, inflation, fuel and energy
costs, consumer debt levels, lack of available credit, the state of the
financial markets, interest rates, and tax rates may adversely affect the
Company&#146;s growth and profitability.</P>
<P align=justify>Specifically:</P>
<P align=justify>- the global credit/liquidity crisis could affect the cost and
availability of financing and our overall liquidity; <BR>- the volatility of
gold and silver prices affects our revenues, profits and cash flow;<BR>-
volatile energy prices, commodity and consumables prices and currency exchange
rates affect our production costs; <BR>- the devaluation and volatility of
global stock markets affects the valuation of our equity securities.</P>
<P align=justify>These factors could have a material adverse effect on the
Company&#146;s financial condition and results of operations.</P>
<P align=justify><B><I>Passive Foreign Investment Company Consequences
<BR></I></B>The Company has not made a determination as to whether it is
considered a &#147;passive foreign investment company&#148; (a &#147;PFIC&#148;) as such term is
defined in the U.S. Internal Revenue Code of 1986, as amended (the &#147;Code&#148;), for
U.S. federal income tax purposes for the current tax year and any prior tax
years. A non-U.S. corporation generally will be considered a PFIC for any
taxable year if either (1) at least 75% of its gross income is passive income or
(2) at least 50% of the value of its assets (based on an average of the
quarterly values of the assets during a taxable year) is attributable to assets
that produce or are held for the production of passive income.</P>
<P align=justify>In general, if the Company is or becomes a PFIC, any gain
recognized on the sale of securities and any &#147;excess distributions&#148; (as
specifically defined in the Code) paid on the securities must be rateably
allocated to each day in a U.S. taxpayer&#146;s holding period for the securities.
The amount of any such gain or excess distribution allocated to prior years of
such U.S. taxpayer&#146;s holding period for the securities generally will be subject
to U.S. federal income tax at the highest tax applicable to ordinary income in
each such prior year, and the U.S. taxpayer will be required to pay interest on
the resulting tax liability for each such prior year, calculated as if such tax
liability had been due in each such prior year.</P>
<P align=justify><B><I>Current market events and conditions <BR></I></B>In 2007,
2008 and into 2009, the U.S. credit markets experienced serious disruption due
to a deterioration in residential property values, defaults and delinquencies in
the residential mortgage market (particularly, sub-prime and non-prime
mortgages) and a decline in the credit quality of mortgage backed securities.
These problems led to a slow-down in residential housing market transactions,
declining housing prices, delinquencies in non-mortgage consumer credit and a
general decline in consumer confidence. These conditions continued and worsened
in 2008 and 2009, causing a loss of confidence in the broader U.S. and
global credit and financial markets and resulting in the collapse of, and
government intervention in, major banks, financial institutions and insurers and
creating a climate of greater volatility, less liquidity, widening of credit
spreads, a lack of price transparency, increased credit losses and tighter
credit conditions. In addition, general economic indicators have deteriorated,
including declining consumer sentiment, increased unemployment and declining
economic growth and uncertainty about corporate earnings.</P>
<P align=center>36</P>
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width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify>These unprecedented disruptions in the credit and financial
markets have had a significant material adverse effect on a number of financial
institutions and have limited access to capital and credit for many companies.
These disruptions could, among other things, make it more difficult for the
Company to obtain, or increase its cost of obtaining, capital and financing for
its operations. The Company&#146;s access to additional capital may not be available
on terms acceptable to it or at all.</P>
<P align=justify><B><I>Substantial Volatility of Share Price <BR></I></B>In
recent years, the securities markets in the United States and Canada have
experienced a high level of price and volume volatility, and the securities of
many mineral exploration companies have experienced wide fluctuations in price
which have not necessarily been related to the operating performance, underlying
asset values or prospects of such companies. The price of the Company&#146;s common
shares is also likely to be significantly affected by short-term changes in
mineral prices or in the Company&#146;s financial condition or results of operations
as reflected in its quarterly financial reports. Other factors unrelated to the
Company&#146;s performance that may have an effect on the price of its common shares
include the following: the extent of analytical coverage available to investors
concerning the Company&#146;s business may be limited if investment banks with
research capabilities do not follow the Company&#146;s securities; lessening in
trading volume and general market interest in the Company&#146;s securities may
affect an investor&#146;s ability to trade significant numbers of the Company&#146;s
common shares; the size of the Company&#146;s public float may limit the ability of
some institutions to invest in the Company&#146;s securities; and a substantial
decline in the price of the Company&#146;s common shares that persists for a
significant period of time could cause the Company&#146;s securities to be delisted
from the Toronto Stock Exchange and NYSE Amex, further reducing market
liquidity.</P>
<P align=justify><B><I>Differences in U.S. and Canadian reporting of reserves
and resources <BR></I></B>The Company&#146;s reserve and resource estimates are not
directly comparable to those made in filings subject to SEC reporting and
disclosure requirements, as the Company generally reports reserves and resources
in accordance with Canadian practices. These practices are different from those
used to report reserve and resource estimates in reports and other materials
filed with the SEC. It is Canadian practice to report measured, indicated and
inferred resources, which are not permitted in disclosure filed with the SEC by
United States issuers. 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. United States investors are cautioned
not to assume that all or any part of measured or indicated resources will ever
be converted into reserves.</P>
<P align=justify>Further, "inferred resources" have a great amount of
uncertainty as to their existence and as to whether they can be mined legally or
economically. Disclosure of "contained ounces" is permitted disclosure under
Canadian regulations; however, the SEC permits issuers to report "resources"
only as in-place tonnage and grade without reference to unit of metal
measures.</P>
<P align=justify>Accordingly, information concerning descriptions of
mineralization, reserves and resources contained in this MD&amp;A, or in the
documents incorporated herein by reference, may not be comparable to information
made public by United States companies subject to the reporting and disclosure
requirements of the SEC.</P>
<P align=justify><B><I>Adequacy of internal control over financial reporting as
per the requirements of the U.S. Sarbanes-Oxley Act<BR> </I></B>The Company
documented and tested during its most recent fiscal year, its internal control
procedures in order to satisfy the requirements of Section 404 of the U.S.
Sarbanes-Oxley Act ("SOX"). SOX requires an annual assessment by management of
the effectiveness of the Company&#146;s internal control over financial reporting and
an attestation report by the Company&#146;s independent auditor
addressing this assessment. The Company may fail to achieve and maintain the
adequacy of its internal control over financial reporting as such standards are
modified, supplemented, or amended from time to time, and the Company may not be
able to ensure that it can conclude on an ongoing basis that it has effective
internal control over financial reporting in accordance with Section 404 of SOX.
The Company&#146;s 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 its financial statements, which in turn could harm the Company&#146;s
business and negatively affect the trading price of its common shares or market
value of its other securities. In addition, any failure to implement required
new or improved controls, or difficulties encountered in their implementation,
could harm the Company&#146;s operating results or cause it to fail to meet its
reporting obligations. Future acquisitions of companies may provide the Company
with challenges in implementing the required processes, procedures and controls
in its acquired operations. Acquired companies may not have disclosure controls
and procedures or internal control over financial reporting that are as thorough
or effective as those required by securities laws currently applicable to the
Company.</P>
<P align=center>37</P>
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width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify>No evaluation can provide complete assurance that the Company&#146;s
internal control over financial reporting will detect or uncover all failures of
persons within the Company to disclose material information required to be
reported. The effectiveness of the Company&#146;s control and procedures could also
be limited by simple errors or faulty judgments. In addition, as the Company
continues to expand, the challenges involved in implementing appropriate
internal control over financial reporting will increase and will require that
the Company continue to improve its internal control over financial reporting.
Although the Company intends to devote substantial time and incur substantial
costs, as necessary, to ensure ongoing compliance, the Company cannot be certain
that it will be successful in complying with Section 404 of SOX.</P>
<P align=justify><B><I>Potential dilution of present and prospective
shareholdings <BR></I></B>In order to finance future operations and development
efforts, the Company may raise funds through the issue of common shares or the
issue of securities convertible into common shares. The Company cannot predict
the size of future issues of common shares or the issue of securities
convertible into common shares or the effect, if any, that future issues and
sales of the Company&#146;s common shares will have on the market price of its common
shares. Any transaction involving the issue of shares, or securities convertible
into shares, could result in dilution, possibly substantial, to present and
prospective holders of shares.</P>
<P align=justify><B><I>Lack of Dividends <BR></I></B>No dividends on the
Company&#146;s common shares have been paid to date. The Company currently plans to
retain all future earnings and other cash resources, if any, for the future
operation and development of its business. Payment of any future dividends, if
any, will be at the discretion of the Board of Directors after taking into
account many factors, including the Company&#146;s operating results, financial
condition, and current and anticipated cash needs.</P>
<P align=justify><B><I>Future Sales of Common Shares by Existing Shareholders
<BR></I></B>Sales of a large number of the Company&#146;s common shares in the public
markets, or the potential for such sales, could decrease the trading price of
the common shares and could impair the Company&#146;s ability to raise capital
through future sales of common shares.</P>
<P align=justify><B><I>Claims Under U.S. Securities Laws <BR></I></B>The
enforcement by investors of civil liabilities under the federal securities laws
of the United States may be affected adversely by the fact that the Company is
incorporated under the laws of British Columbia, Canada, that the independent
registered chartered accountants who have audited the Company&#146;s financial
statements and some or all of the Company&#146;s directors and officers may be
residents of Canada or elsewhere, and that all or a substantial portion of the
Company&#146;s assets and said persons are located outside the United States. As a
result, it may be difficult for holders of the Company&#146;s common shares to effect
service of process within the United States upon people who are not residents of
the United States or to realize in the United States upon judgments of courts of
the United States predicated upon civil liabilities under the federal securities
laws of the United States</P>
<P align=center>38</P>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B><I>Financial Instruments <BR></I></B>The Company currently
has an investment in asset-backed commercial paper (&#147;ABCP&#148;). There can be no
assurances that the value of the ABCP will not experience fluctuations in
value.</P>
<P align=justify>From time to time, the Company may use certain financial
instruments to manage the risks associated with changes in silver prices,
interest rates and foreign currency exchange rates. The use of financial
instruments involves certain inherent risks including, among other things: (i)
credit risk, the risk of default on amounts owing to the Company by the
counterparties with which Company has entered into such transaction; (ii) market
liquidity risk, the risk that the Company has entered into a position that
cannot be closed out quickly, either by liquidating such financial instrument or
by establishing an offsetting position; (iii) unrealized mark-to-market risk,
the risk that, in respect of certain financial instruments, an adverse change in
market prices for commodities, currencies or interest rates will result in the
Company incurring an unrealized mark-to-market loss in respect of such
derivative products.</P>
<P align=justify><B><I>Conversion to IFRS <BR></I></B>The Company&#146;s conversion
to International Financial Reporting Standards (&#147;IFRS&#148;) may materially impact
the Company&#146;s reported financial position and results of operations. The
conversion to IFRS may affect the Company&#146;s accounting policies, information
technology systems, internal controls and disclosure controls and procedures.
</P>
<P align=justify><B><U>CONTROLS AND PROCEDURES</U> </B></P>
<P align=justify>The Company&#146;s officers and management are responsible for
establishing and maintaining disclosure controls and procedures for the Company.
Disclosure controls and procedures are designed to provide reasonable assurance
that material information required to be disclosed by the Company under
securities legislation is recorded, processed, summarized and reported within
the applicable time periods and to ensure that required information is gathered
and communicated to the Company&#146;s management, including the Chief Executive
Officer (CEO) and Chief Financial Officer (CFO) as is appropriate to permit
timely decisions regarding public disclosure. There are inherent limitations to
the effectiveness of any system of disclosure controls and procedures.
Accordingly, even effective disclosure controls and procedures can only provide
reasonable assurance of achieving their control objectives. </P>
<P align=justify>At the end of the period covered by this MD&amp;A management
conducted an evaluation, including the CEO and CFO, of the effectiveness of the
Company&#146;s disclosure controls and procedures pursuant to National Instrument
51-109 &#147;Certification of Disclosure in Issuers Annual and Interim Filings&#148; (&#147;NI
52-109&#148;) and Rule 13a -15(b) of the U.S. Exchange Act of 1934, as amended (the
&#147;U.S. Exchange Act&#148;). Based upon that evaluation, the Company&#146;s Chief Executive
Officer and Chief Financial Officer have concluded that as of the end of the
period covered by this MD&amp;A the disclosure controls and procedures were
effective to give reasonable assurance that the information required to be
disclosed by the Company in reports that it files or submits is (i) recorded,
processed, summarized and reported, within the time periods specified under
applicable securities legislation in Canada and in the U.S. Securities and
Exchange Commission&#146;s rules and forms, and (ii) accumulated and communicated to
management, including its principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure. </P>
<P align=justify><B>Management&#146;s Report on Internal Controls over Financial
Reporting </B></P>
<P align=justify>Management is responsible for establishing and maintaining
adequate internal control over financial reporting (as defined in NI 52-109 and
in Rules 13a-15(f) under the Exchange Act). A company&#146;s internal control over
financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with applicable
generally accepted accounting principles.</P>
<P align=justify>A company&#146;s internal control over financial reporting includes
those policies and procedures that (i) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and
(iii) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the company&#146;s assets that could
have a material effect on the financial statements. It should be noted that a
control system, no matter how well conceived or operated, can only provide
reasonable assurance, not absolute assurance, that the objectives of the control
system are met. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with policies and
procedures may deteriorate. </P>
<P align=center>39</P>
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width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify>Management, including our Chief Executive Officer and Chief
Financial Officer, assessed the effectiveness of our internal control over
financial reporting as of December 31, 2010. In making this assessment,
management used the criteria set forth in the Internal Control Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Based on its assessment, management has concluded that, as of
December 31, 2010, the Company&#146;s internal control over financial reporting is
effective. Also, management determined that there were no material weaknesses in
the Company&#146;s internal control over financial reporting as at December 31, 2010. </P>
<P align=justify>The Company&#146;s independent auditor, KPMG LLP, the independent
registered public accounting firm that audited the financial statements, has
issued a report on the Company&#146;s internal control over financial reporting which
is included with the financial statements. </P>
<P align=justify><B>Changes in Internal Control over Financial Reporting
<BR></B>There have been no changes that occurred during the period covered by
this report that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting. </P>
<P align=justify><B><U>INTERNATIONAL FINANCIAL REPORTING STANDARDS</U>
</B></P>
<P align=justify>On February 13, 2008, the Canadian Accounting Standards Board
confirmed that publicly accountable enterprises will be required to adopt
International Financial Reporting Standards (&#147;IFRS&#148;) in place of Canadian GAAP
for interim and annual reporting purposes for fiscal years beginning on or after
January 1, 2011. Accordingly, the Company will transition from current Canadian
GAAP reporting and commence reporting under IFRS for the first quarter of 2011,
with restatement of comparative information presented.</P>
<P align=justify>The Company developed a conversion plan consisting of four key
stages including; project planning and preliminary assessment, detailed
assessment, design and implementation. The project planning and preliminary
assessment stage has been completed. The preliminary assessment was completed
with the assistance of external advisors and outlines the significant
differences between Canadian GAAP and IFRS and rates the impact of each of the
significant differences on the entity&#146;s financial statements, thereby allowing
the Company to focus the detailed assessment on the highest priority items.</P>
<P align=justify>The Company has completed the design stage which includes
completing an assessment of the quantified effects of the anticipated changes to
the Company&#146;s IFRS opening balance sheet and identifying business processes and
resources that may require modification as a result of these changes. The
implementation stage proceeded concurrently with the detailed assessment and
design stages including preparing draft IFRS compliant model financial
statements and making appropriate changes to business, reporting and system
processes and training to support preparation and maintenance of IFRS compliant
financial data for the IFRS opening balance sheet at January 1, 2010 and going
forward. The Company believes the plan is sufficiently advanced and adequate
resources are in place to ensure an efficient and effective transition to IFRS
reporting. </P>
<P align=center>40</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_41></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify>The following table provides a summary of the key activities
involved and the status of these activities: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid"
    colSpan=2 align=left><B>Key Activities</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid"
    width="5%" align=left><B>Status</B> </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid"
    width="46%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" colSpan=2
      align=left><B>Financial Reporting</B> </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%" align=left>&nbsp;
</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%" align=left>&nbsp;
    </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" align=center>-&nbsp;</TD>
    <TD width="46%" align=left>Identify key differences between IFRS and
      Canadian GAAP </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%"
    align=center>-&nbsp;</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%" align=left>Key
      differences between IFRS and Canadian GAAP are identified </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" align=center>-&nbsp;</TD>
    <TD width="46%" align=left>Analyze and select IFRS 1 elections available
      upon adoption </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%"
    align=center>-&nbsp;</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%" align=left>IFRS 1
      elections have been analyzed and elections have been selected </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" align=center>-&nbsp;</TD>
    <TD width="46%" align=left>Analyze IFRS accounting policies where
      alternatives are permitted and select appropriate alternative </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%"
    align=center>-&nbsp;</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%" align=left>Policy
      positions for key accounting differences have been completed </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" align=center>-&nbsp;</TD>
    <TD width="46%" align=left>Quantify key differences for opening balance
      sheet </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%"
    align=center>-&nbsp;</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%"
      align=left>Quantification of key differences for the opening balance sheet
      are near complete </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" align=center>-&nbsp;</TD>
    <TD width="46%" align=left>Prepare IFRS 1 reconciliations </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%"
    align=center>-&nbsp;</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%" align=left>IFRS 1
      reconciliations are near complete </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" align=center>-&nbsp;</TD>
    <TD width="46%" align=left>Prepare IFRS consolidated financial statements
      with prior year comparative information </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%"
    align=center>-&nbsp;</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%" align=left>Draft
      skeleton IFRS consolidated financial statements are in progress </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" align=left></TD>
    <TD width="46%" align=left></TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%"
    align=center>-&nbsp;</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%" align=left>In
      December 2010, a presentation on the IFRS transition was presented to the
      Board of Directors by management. The presentation summarized key
      accounting policy choices relevant to the Company and significant
      differences identified up to the date of the meeting. </TD></TR>
  <TR>
    <TD
      style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid">&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="46%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    width="5%">&nbsp; </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid"
    width="46%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" colSpan=2
      align=left><B>Financial Information Systems</B> </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%" align=left>&nbsp;
</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%" align=left>&nbsp;
    </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" align=center>-&nbsp;</TD>
    <TD width="46%" align=left>Create solution to capture IFRS information
      during 2010 while still reporting under Canadian GAAP </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%" align=center>-</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%"
      align=left>Solutions have been implemented for some of the areas with key
      differences with the remaining areas still in progress </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" align=center>-&nbsp;</TD>
    <TD width="46%" align=left>Analyze information systems to determine
      changes required to capture IFRS information from January 2011 onward </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%"
    align=center>-&nbsp;</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%"
      align=left>Sufficient information systems are thought to be in place
</TD></TR>
  <TR>
    <TD
      style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid">&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="46%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    width="5%">&nbsp; </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid"
    width="46%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" colSpan=2
      align=left><B>Training</B> </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%" align=left>&nbsp;
</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%" align=left>&nbsp;
    </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" align=center>-&nbsp;</TD>
    <TD width="46%" align=left>Provide technical training to key finance
      personnel </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%"
    align=center>-&nbsp;</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%" align=left>Key
      finance personnel have been and continue to be provided with training at
      various seminars and current published materials </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" align=center>-&nbsp;</TD>
    <TD width="46%" align=left>Provide technical training to accounting
      personnel at all site locations </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%"
    align=center>-&nbsp;</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%" align=left>Key
      accounting personnel have also been attending IFRS seminars and specific
      training is ongoing </TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="46%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    width="5%" align=left>&nbsp;</TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid"
    width="46%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-LEFT: #000000 1px solid" colSpan=2
      align=left><STRONG>Business Activities</STRONG> </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%" align=left>&nbsp;</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" align=center>-&nbsp;</TD>
    <TD width="46%" align=left>Assess impact of conversion on budgeting,
      forecasts and compensation arrangements </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%"
    align=center>-&nbsp;</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%" align=left>It is
      anticipated that there will be a minimal impact on these business
      activities but continuing re-assessment is be performed as the transition
      process progresses </TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="46%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    width="5%" align=center>&nbsp;</TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid"
    width="46%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" colSpan=2 align=left><B>Control
      Environment</B> </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%" align=left>&nbsp;
</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%" align=left>&nbsp;
    </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" align=center>-&nbsp;</TD>
    <TD width="46%" align=left>Maintain effective controls over the IFRS
      conversion process </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%"
    align=center>-&nbsp;</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%" align=left>Key
      finance personnel meet regularly to ensure effective controls over the
      process are maintained </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" align=center>-&nbsp;</TD>
    <TD width="46%" align=left>Revise internal controls for changes in
      processes as a result of the transition to IFRS </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" width="5%"
    align=center>-&nbsp;</TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" width="46%" align=left>Further
      information needs to be gathered for the assessment of changes to internal
      controls for any changes in processes </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=center>-&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="46%"
      align=left>Approval by Audit Committee </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    width="5%" align=center>- </TD>
    <TD
    style="BORDER-BOTTOM: #000000 1px solid; BORDER-RIGHT: #000000 1px solid"
    width="46%" align=left>Approval is pending </TD></TR></TABLE>
<P align=center>41</P>
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width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B>Application of IFRS 1 transitional exemptions and identified
GAAP differences</B> <BR>The Company has identified the key areas noted below
where changes in accounting policy are expected on the transition from Canadian
GAAP to IFRS. These areas do not necessarily represent a final list of changes.
As we progress through the final steps of the implementation stage, the
differences and impacts described below are subject to change, upon review by
the Company&#146;s Audit Committee and external auditors. </P>
<P align=justify><B>First-time adoption of IFRS</B> <BR>The Company&#146;s adoption
of IFRS will require the application of &#147;First-time adoption of International
Financial Reporting Standards&#148; (&#147;IFRS 1&#148;) which generally requires that all IFRS
standards and interpretations be accounted for on a retrospective basis. IFRS 1
provides for certain optional exemptions and specific mandatory exemptions. The
following represents the optional exemptions that the Company expects to apply:
</P>
<P style="MARGIN-LEFT: 5%" align=justify><I>Share-based payments</I> &#150; IFRS 1
allows that full retrospective application may be avoided for certain
share-based instruments depending on the grant date, vesting terms and
settlement of any real liabilities. A first-time adopter can elect to not apply
IFRS 2 to share-based payments granted after November 7, 2002 that vested before
the later of (a) the date of transition to IFRS and (b) January 1, 2005. The
Company plans to elect this exemption and will apply IFRS2 to only unvested
stock options as at January 1, 2010 being the transition date.. </P>
<P style="MARGIN-LEFT: 5%" align=justify><I>Business Combinations</I> &#150; IFRS 1
allows that a first-time adopter may elect not to apply IFRS 3 Business
Combinations retrospectively to business combinations prior to the date of
transition avoiding the requirement to restate prior business combinations. The
Company plans to elect this exemption and as such expects no difference between
Canadian GAAP and IFRS on transition for differences in business combination
accounting. </P>
<P style="MARGIN-LEFT: 5%" align=justify><I>Cumulative Translation
Differences</I> &#150; IFRS 1 allows that a first-time adopter may elect to deem all
cumulative translation differences to be zero at the date of transition. The
Company plans to elect this exemption and as such expects that the cumulative
translation amount of $212,000 included in other comprehensive income will be
reallocated to deficit. </P>
<P style="MARGIN-LEFT: 5%" align=justify><I>Borrowing Costs</I> &#150; Borrowing
costs related to the acquisition, construction or production of qualifying
assets must be capitalized under IAS 23(R). This is effective for fiscal years
beginning on or after January 1, 2009, with earlier application permitted. IFRS
1 allows the effective date to be the date of transition to IFRS rather than
January 1, 2009. The Company plans to elect this exemption and as such expects
no difference between Canadian GAAP and IFRS on transition. </P>
<P style="MARGIN-LEFT: 5%" align=justify><I>Decommissioning liabilities</I> &#150;
IFRS requires specified changes in a decommissioning or similar liability to be
added or deducted from the cost of the asset to which it relates. The adjusted
depreciable amount is then depreciated prospectively over its remaining useful
life. IFRS 1 allows a first time adopter to not comply fully with these
accounting requirements for changes in such liabilities that occurred before the
date of transition and instead apply a simplified method which is set out in
IFRS 1. The Company plans to elect this exemption. </P>
<P style="MARGIN-LEFT: 5%" align=justify><I>Fair value as deemed cost</I> &#150; The
Company may elect among two options when measuring the value of its assets under
IFRS. It may elect, on an asset by asset basis, to use either historical cost as
measured under retrospective application of IFRS or fair value of an assets at
opening balance sheet date. The Company expects to use historical cost for its
assets. </P>
<P align=center>42</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_43></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B>Reconciliation to previously reported financial statements
</B></P>
<P align=justify>The following tables provide a reconciliation between the
amounts previously reported under Canadian GAAP and those anticipated to be
reported in accordance with IFRS and related transitional requirements, based on
our analysis to date. A summary of each of the noted changes is included in the
notes following the reconciliations of the following Consolidated Balance Sheets
and Consolidated Statements of Operations and Comprehensive Income for the dates
noted below. The anticipated effects of transition from GAAP to IFRS on the cash
flow are not material; therefore a reconciliation of cash flows has not been
presented. The reconciliations and related adjustments have not been audited by
the Company&#146;s external auditor.</P>
<P align=justify>Transitional Consolidated Statement of Financial Position
Reconciliation &#150; January 1, 2010 <BR>Consolidated Statement of Financial
Position Reconciliation &#150; December 31, 2010 <BR>Consolidated Statement of
Comprehensive Income Reconciliation &#150; December 31, 2010 </P>
<P align=center>43</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_44></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B>The January 1, 2010 Canadian GAAP Consolidated Balance Sheet
has been reconciled to IFRS (unaudited) as follows: </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%" align=center>&nbsp;    </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%" align=center>January
      1 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%" align=center>Effect
      of </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%"
      align=center><B>January 1</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center>Ref    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=center>Transition to IFRS </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=center><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp; </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>CAN GAAP </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp; </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><B>IFRS</B> </TD>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>ASSETS</B> </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=center>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Current assets</B> </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Cash and cash equivalents </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;26,702 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff><B>$</B></TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>&nbsp;26,702</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Marketable securities </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">2,045 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>2,045</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Notes receivable </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>2,476 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>2,476</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Accounts receivable and prepaids </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">7,467 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>7,467</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Inventories </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>e) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>6,100 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>(68</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>6,032</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;Due
      from related parties </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">243    </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>243</B> </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Total current assets </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>45,033 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>(68</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>44,965</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Long term deposits </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">1,153 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>1,153</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Long term investments </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>-</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Redemption call option on covertible debentures </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">2,693 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">(2,693</TD>
    <TD align=left valign="bottom">) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>-</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Mineral property, plant and equipment </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=center valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">b) e) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">57,002 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(1,577</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>55,425</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Total
      assets</B> </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
      align=center valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp; </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;105,881 </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;(4,338</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">) </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"><B>$</B></TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"><B>&nbsp;101,543</B> </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>LIABILITIES AND SHAREHOLDERS' EQUITY</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Current liabilities</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Accounts payable and accrued liabilities </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">$</TD>
    <TD align=right valign="bottom">&nbsp;5,230 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">$</TD>
    <TD align=right valign="bottom">&nbsp;- </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom"><B>$</B></TD>
    <TD align=right valign="bottom"><B>&nbsp;5,230</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Current portion of promissory
      note </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>231 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>231</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Accrued interest on convertible debentures </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">254 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>254</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Income taxes payable </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=center valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">545 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>545</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Total current liabilities </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">6,260 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>6,260</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Promissory note </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">248 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>248</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Provision for reclamation and
      rehabilitation </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>b) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>1,740 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>278 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>2,018</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Future income tax liability </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">e) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">8,103 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">(158</TD>
    <TD align=left valign="bottom">) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>7,945</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Liability portion of convertible debentures    </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>f) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>8,149 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>(4,483</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>3,666</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Convertible debenture derivative liability </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">f) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">21,926 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>21,926</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Warrant Derivative Liability </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=center valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">d) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">- </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">7,823 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>7,823</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Total
      liabilities</B> </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">24,500 </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">25,386 </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>49,886</B> </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Shareholders' equity</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF">Common shares, unlimited shares authorized,
    no par value, issued and outstanding 60,626,203 </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=center valign="bottom" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right valign="bottom" bgcolor="#E6EFFF">112,173 </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right valign="bottom" bgcolor="#E6EFFF">(2,760</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">) </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right valign="bottom" bgcolor="#E6EFFF"><B>109,413</B> </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Equity portion of convertible debentures</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">2,164 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">(2,164</TD>
    <TD align=left valign="bottom">) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>-</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF">Contributed surplus </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=center valign="bottom" bgcolor="#E6EFFF">a) d) </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right valign="bottom" bgcolor="#E6EFFF">12,948 </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right valign="bottom" bgcolor="#E6EFFF">(5,629</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">) </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right valign="bottom" bgcolor="#E6EFFF"><B>7,319</B> </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Accumulated comprehensive income </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">c) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">749 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">(212</TD>
    <TD align=left valign="bottom">) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>537</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">Deficit </TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=center valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">(46,653</TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">(18,959</TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid"><B>(65,612</B></TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid"><B>)</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=left><B>Total shareholders' equity</B> </TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">81,381 </TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(29,724</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>51,657</B> </TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid">&nbsp; </TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;    </TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD
      align=right valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;105,881 </TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD
      align=right valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;(4,338</TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid">) </TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid"><B>$</B></TD>
    <TD
      align=right valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid"><B>&nbsp;101,543</B> </TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD></TR></TABLE>
<P align=center>44</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_45></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B>The December 31, 2010</B> <B>Canadian GAAP Consolidated
Balance Sheet has been reconciled to IFRS (unaudited) as follows:</B> </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%" align=center>&nbsp;    </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%" align=center>Effect
      of </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%"
      align=center><B>December 31</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center>Ref    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=center>Transition to IFRS </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=center><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp; </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>CAN GAAP </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp; </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><B>IFRS</B> </TD>
    <TD align=center>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>ASSETS</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Current assets</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Cash and cash equivalents </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;68,037 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff><B>$</B></TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>&nbsp;68,037</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Short term investments </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">20,009 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>20,009</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Marketable securities </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>81 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>81</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Notes receivable </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">3,551 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>3,551</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Accounts receivable and
      prepaids </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>10,299 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>10,299</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Inventories </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">e) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">12,971 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">(88</TD>
    <TD align=left valign="bottom">) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>12,883</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Due from related parties </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=center valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">218 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>218</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Total current assets </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">115,166 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">(88</TD>
    <TD align=left valign="bottom">) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>115,078</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Long term deposits </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>778 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>778</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Redemption call option on covertible debentures </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>-</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Mineral property, plant and equipment </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=center valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">b) e) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">72,479 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(1,238</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>71,241</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Total
      assets</B> </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
      align=center valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp; </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;188,423 </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;(1,326</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">) </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"><B>$</B></TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"><B>&nbsp;187,097</B> </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>LIABILITIES AND SHAREHOLDERS' EQUITY</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Current liabilities</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Accounts payable and accrued liabilities </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">$</TD>
    <TD align=right valign="bottom">&nbsp;9,464 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom"><B>$</B></TD>
    <TD align=right valign="bottom"><B>&nbsp;9,464</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Current portion of promissory
      note </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>231 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>231</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Accrued interest on convertible debentures </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>-</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Income taxes payable </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=center valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">3,260 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>3,260</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Total current liabilities </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">12,955 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>12,955</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Promissory note </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">56 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>56</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Provision for reclamation and
      rehabilitatioin </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>b) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>2,242 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>282 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>2,524</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Future income tax liability </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">e) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">14,157 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">64 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>14,221</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Liability portion of convertible debentures    </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>-</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Convertible debenture derivative liability </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>-</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Warrant derivative liability </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=center valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">d) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">- </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">29,348 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>29,348</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Total
      liabilities</B> </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">29,410 </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">29,694 </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>59,104</B> </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Shareholders' equity</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF">Common shares, unlimited shares authorized,
    no par value, issued and outstanding 61,705,456 </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=center valign="bottom" bgcolor="#E6EFFF">f) </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right valign="bottom" bgcolor="#E6EFFF">183,296 </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right valign="bottom" bgcolor="#E6EFFF">22,566 </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right valign="bottom" bgcolor="#E6EFFF"><B>205,862</B> </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Equity portion of convertible debentures</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>-</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF">Contributed surplus </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=center valign="bottom" bgcolor="#E6EFFF">a) d) </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right valign="bottom" bgcolor="#E6EFFF">13,635 </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right valign="bottom" bgcolor="#E6EFFF">(5,842</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">) </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right valign="bottom" bgcolor="#E6EFFF"><B>7,793</B> </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Accumulated comprehensive income </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">c) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">1,656 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">(212</TD>
    <TD align=left valign="bottom">) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>1,444</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF">Opening deficit </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=center valign="bottom" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right valign="bottom" bgcolor="#E6EFFF">(46,653</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">) </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right valign="bottom" bgcolor="#E6EFFF">(18,812</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">) </TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right valign="bottom" bgcolor="#E6EFFF"><B>(65,465</B></TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF"><B>)</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=left>2010 net earnings </TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">7,079 </TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(28,720</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>(21,641</B></TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid"><B>Total
      shareholders' equity</B> </TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">159,013 </TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">(31,020</TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid"><B>127,993</B> </TD>
    <TD
    align=left valign="bottom" bgcolor="#E6EFFF" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=left>&nbsp; </TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp; </TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD
    align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;188,423 </TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD
    align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;(1,326</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">) </TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"><B>$</B></TD>
    <TD
    align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"><B>&nbsp;187,097</B> </TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD></TR></TABLE>
<P align=center>45</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_46></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B>The Canadian GAAP consolidated statement of operations and
comprehensive income for the year ended December 31, 2010 has been reconciled to
IFRS (unaudited) as follows:</B> </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%" align=center>&nbsp;
    </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%" align=center>Effect
      of </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="10%"
      align=center><B>December 31</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center>Ref    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=center>Transition to IFRS </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
      align=center><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"
    align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp; </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>CAN GAAP </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp; </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center><B>IFRS</B> </TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Revenue </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;86,510 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff><B>$</B></TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>&nbsp;86,510</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Cost of sales: </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Production costs </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">g) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">41,514 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">(518</TD>
    <TD align=left valign="bottom">) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>40,996</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp; &nbsp;Royalties </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>f) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>1,212 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>1,212</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;
      &nbsp; &nbsp;Amortization and depletion </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">b)
      e) g) </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">15,447 </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(427</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>15,020</B> </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>56,961 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>267 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>57,228</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Mine operating earnings </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>29,549 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>(267</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>29,282</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Expenses: </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Exploration </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">a) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">4,283 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">436 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>4,719</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp; &nbsp; &nbsp;General and administrative </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=center valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">a) g) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">5,485 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">3,513 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>8,998</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">9,768 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">3,949 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>13,717</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Income from operations </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">19,781 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">(4,216</TD>
    <TD align=left valign="bottom">) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>15,565</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Other income (expense): </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp; &nbsp;Finance costs
</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>b) g) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>(1,714</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>(1,714</B></TD>
    <TD align=left valign="bottom" bgColor=#e6efff><B>)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Mark-to-market gain on
      redemption call option </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">f) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">703 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">(703</TD>
    <TD align=left valign="bottom">) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>-</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp; &nbsp;Mark-to-market
      gain (loss) on derivative liabilities </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>d) f) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>(27,632</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>(27,632</B></TD>
    <TD align=left valign="bottom" bgColor=#e6efff><B>)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Accretion of convertible
      debentures </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">g) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">(1,088</TD>
    <TD align=left valign="bottom">) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">1,088 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>-</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp; &nbsp;Stock-based
      compensation </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>a) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>(4,679</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>4,679 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>-</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Foreign Exchange </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">1,156 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">89 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>1,245</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp; &nbsp;Gain (loss) on
      sale of marketable securities </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>195 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>195</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;
      &nbsp; &nbsp;Investment and other income </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">478    </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>478</B> </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>(3,235</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>(24,193</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>(27,428</B></TD>
    <TD align=left valign="bottom" bgColor=#e6efff><B>)</B> </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Income before income taxes </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>16,546 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>(28,409</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>(11,863</B></TD>
    <TD align=left valign="bottom" bgColor=#e6efff><B>)</B> </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Income tax expense: </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Current income tax
      expense </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=center valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">3,786 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>3,786</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Deferred income tax
      expense </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=center valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">e) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">5,681 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">311 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>5,992</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">9,467    </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">311    </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>9,778</B> </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=center valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Net income (loss)
      for the period </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
      align=center valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp; </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">7,079    </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">(28,720</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">) </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"><B>(21,641</B></TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"><B>)</B> </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Other comprehensive income, net of tax </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Unrealized gain (loss) on marketable securities </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">22 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>-</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>22</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Unrealized foreign exchange gain/
      (loss) on notes receivable </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>953 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>-</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>953</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Unrealized foreign exchange gain/ (loss) on available
      for sale assets </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">127 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>-</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom"><B>127</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Reclassification adjustment for loss (gain) included in
      net income </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(195</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>-</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>(195</B></TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">907    </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>-</B> </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>907</B> </TD>
    <TD
    align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left><B>Comprehensive income (loss) for the period</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">7,986 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">(28,720</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">(20,734</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">) </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left><B>Basic earnings per share based on net earnings</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;0.11 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;(0.44</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;(0.33</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">) </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left><B>Weighted average number of shares outstanding</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">65,646,786 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">65,646,786 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    align=right valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid"><B>65,646,786</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
  </TR></TABLE>
<P align=center>46</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_47></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B>Adjustments on transition to IFRS: <BR></B>The following is
a summary of the significant accounting differences considered as part of the
IFRS transition project and, where appropriate, the preliminary quantification
of the adjustments required as of the transition date and for the comparative
period. Completion of the final stages of our project may result in the
identification of other adjustments or changes to the amounts presented, and
such changes may be material. </P>
<P align=justify><B>Functional currency and foreign exchange translation
<BR></B>Canadian GAAP requires an entity to determine whether a subsidiary is an
integrated or self sustaining entity based on the functional currency of the
parent company. This determination dictates the method of foreign exchange
translation for the consolidated financial statements. Under IFRS an entity is
required to assess its functional currency independently for each entity within
a consolidated group. The Company has completed its assessment and has
determined that there is no change to the functional currency of its entities
and as such anticipates no impact to financial reporting. </P>
<P align=justify><B>Componentization of mineral property, plant and
equipment<BR></B>IFRS requires entities to componentize all long lived assets
and record amortization on a component-by-component basis whereas under Canadian
GAAP the concept of componentization may not be applied on as rigorous a basis
as under IFRS therefore differences in practice may arise. The Company is
currently completing an assessment on all long-lived assets in order to
determine if a material difference exists between the application of
componentization under Canadian GAAP and that to be applied under IFRS. At this
time the Company anticipates no material impact. </P>
<P align=justify><B>Asset impairment<BR></B>Both Canadian GAAP and IFRS require
an entity to undertake quantitative impairment testing where there is an
indication of impairment. Further there is a requirement under IFRS for the
Company to assess whether indicators of impairment exist at the date of
transition to IFRS. </P>
<P align=justify>Unlike Canadian GAAP, IFRS requires impairment charges to be
reversed if circumstances leading to the impairment no longer exist. The Company
has no historic impairment charges which could be reversed as of the transition
date.</P>
<P align=justify>As at the transition date, there were no indications of
impairment under IFRS identified by management, therefore no formal quantitative
impairment was undertaken.</P>
<P align=justify><B>Adjustments on transition to IFRS: </B></P>
<P align=justify><B>(a) Share-based payment transactions </B></P>
<P style="MARGIN-LEFT: 5%" align=justify>On transition to IFRS the Company has
elected to change its accounting policy for the treatment of amounts recorded in
contributed surplus which relate to stock options which expire unexercised.
Under IFRS amounts recorded for expired unexercised stock options will be
transferred to deficit on the date of expiry. Previously the Company&#146;s Canadian
GAAP policy was to leave such amounts in contributed surplus. </P>
<P style="MARGIN-LEFT: 10%" align=justify>Impact on Consolidated Balance Sheets
(Unaudited)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=center>January
      1 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Contributed surplus </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;(5,724</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;(5,577</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Adjustment to
      deficit </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="15%"
      align=right>&nbsp;5,724 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="15%"
      align=right>&nbsp;5,577 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P align=center>47</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_48></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>A further difference is that IFRS 2
requires that forfeiture estimates are recognized in the period they are
estimated and are revised for actual forfeitures in subsequent periods, whereas
under the Company&#146;s Canadian GAAP policy forfeitures of awards have been
recognized as they occur. On application of the IFRS 1 exemption noted
previously, this change in accounting was applied only to unvested awards as of
the transition date.</P>
<P style="MARGIN-LEFT: 10%" align=justify>Impact on Consolidated Balance Sheets
(Unaudited)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=center>January
      1 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Contributed surplus </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;(118</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;(52</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Adjustment to
      deficit </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="15%"
      align=right>&nbsp;118 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="15%"
      align=right>&nbsp;52 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>Impact on Consolidated Statements of
Operations and Comprehensive Income (Unaudited)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Stock-based compensation </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;(66</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Adjustment to
      comprehensive loss </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="15%"
      align=right>&nbsp;(66</TD>
<TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>) </TD></TR></TABLE>
<P align=justify><B>(b) Provision for reclamation and
rehabilitation </B></P>
<P style="MARGIN-LEFT: 5%" align=justify>The primary differences between IFRS
and Canadian GAAP for reclamation and rehabilitation provisions include the
basis of estimation for undiscounted cash flows, the discount rate, frequency of
liability remeasurement and the recognition of a liability when a constructive
obligation exists. Canadian GAAP requires a liability to be recognized when
there is a legal obligation whereas IFRS expands the recognition principle by
requiring that a liability be recorded if there is a legal or constructive
obligation.</P>
<P style="MARGIN-LEFT: 5%" align=justify>Canadian GAAP requires the estimate of
undiscounted cash flows to be based on the amount that a third party would
demand to assume the obligation, whereas IFRS focuses on management&#146;s best
estimate of the expenditures required to settle the obligation. Under Canadian
GAAP the discount rate used to determine the present value of the liability is
the credit-adjusted risk free rate for the entity whereas IFRS requires the use
of a discount rate that reflects the risks specific to the liability. Under
Canadian GAAP the Company&#146;s provision for reclamation and rehabilitation is
re-measured when there is a change in the amount or timing of cash flows
required to settle the obligation whereas IFRS requires the re-measurement at
each reporting date.</P>
<P style="MARGIN-LEFT: 5%" align=justify>On consideration of the differences
noted in the above paragraph management has determined that an adjustment is
required to reflect the impact of applying a discount rate specific to the
liability. The adjustment to the provision for the change in discount rate was
recorded against mineral property, plant and equipment in accordance with the
IFRS 1 exemption described above.</P>
<P style="MARGIN-LEFT: 10%" align=justify>Impact on Consolidated Balance Sheets
(Unaudited)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=center>January
      1 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Property, plant and equipment </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="15%" align=right>&nbsp;275 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="15%" align=right>&nbsp;278 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Asset retirement
      obligation </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right>282    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right>278    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Adjustment to deficit </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;(7</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;- </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=center>48</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_49></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>Impact on Consolidated Statements of
Operations and Comprehensive Income (Unaudited)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
  align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Depreciation and depletion </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="15%" align=right>&nbsp;(43</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Finance costs </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right>43</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Adjustment to comprehensive loss </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;- </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P align=justify><B>(c) Cumulative translation differences
</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>At the date of transition under
Canadian GAAP there was a cumulative translation adjustment relating to the
Company&#146;s change in functional currency in 2007. The Company has chosen to apply
the related IFRS 1 election and has eliminated the cumulative translation
difference.</P>
<P style="MARGIN-LEFT: 10%" align=justify>Impact on Consolidated Balance Sheets
(Unaudited)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="1%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=center>January
      1 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="2%"
  align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Accumulated comprehensive income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;(212</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;(212</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Adjustment to
      deficit </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="15%"
      align=right>&nbsp;212 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="15%"
      align=right>&nbsp;212 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P align=justify><B>(d) Warrant Derivative Liability </B></P>
<P style="MARGIN-LEFT: 5%" align=justify>Under IFRS, the warrants issued by the
Company with an exercise price denominated in a currency other than its
functional currency must be classified as liabilities (as they do not meet the
definition of an equity instrument) and are recognized at fair value with
changes in fair value being recognized as a profit or loss. There is no such
requirement under Canadian GAAP as warrants issued by the Company meet the
definition of an equity instrument. The Company&#146;s outstanding warrants are
denominated in Canadian dollars and the functional currency is the US dollar
therefore the Company will recognize the warrants as a liability with changes to
the fair value of the liability being recognized in net earnings.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company&#146;s publicly traded warrants
were valued based on the quoted market value of these warrants as of December
31, 2009 and 2010 and are classified in Level 1 of the fair value hierarchy. The
non-publicly traded warrants have been valued using Black-Scholes valuation
model and are classified in Level 2 of the fair value hierarchy. </P>
<P style="MARGIN-LEFT: 10%" align=justify>Impact on Consolidated Balance Sheets
(Unaudited)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=center>January
      1 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Warrant derivative liability </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="15%" align=right>&nbsp;29,348 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="15%" align=right>&nbsp;7,823 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Common shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%"
    align=right>(1,594</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%"
    align=right>(3,719</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Adjustment to deficit </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;27,754 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;4,104 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>Impact on Consolidated Statements of
Operations and Comprehensive Income (Unaudited)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Mark to market gain (loss) on derivative liability </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;(23,650</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Adjustment to
      comprehensive loss </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="15%"
      align=right>&nbsp;(23,650</TD>
<TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>) </TD></TR></TABLE>
<P align=center>49</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_50></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B>(e) Income Tax </B></P>
<P style="MARGIN-LEFT: 5%" align=justify>There are a number of differences
between Canadian GAAP and IFRS related to income taxes with the two that are
most significant to the Company being the calculation of temporary differences
on non-monetary items and the initial recognition exemption (the &#147;IRE&#148;) on an
asset acquisition.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Initial recognition exemption
<BR></B>Under Canadian GAAP deferred tax liabilities (&#147;DTL&#148;) arising from
temporary differences at the date an asset is acquired are recognized using a
circular calculation with the other side recognized against the asset. Under
IFRS, in the circumstances described above, deferred tax is prohibited from
being recognized. Under Canadian GAAP deferred tax was recognized using the
above methodology for the Minera Santa Cruz y Garibaldi S.A. de C.V. and
Metalurgica Guanacevi S.A. de C.V. asset acquisitions. </P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Calculation of temporary difference
on non-monetary items <BR></B>Under Canadian GAAP, deferred tax balances are
calculated in the currency in which the taxes are paid and then converted to the
accounting presentation currency at the current exchange rate whereas IFRS
requires that deferred taxes be determined in an entity&#146;s functional accounting
currency by comparing the historic non monetary accounting basis to the tax
basis converted at the current exchange rate. Adjustments arise from this
different treatment when an entity&#146;s functional currency differs from that in
which the entity calculates and pays tax. The Company&#146;s adjustments for this
difference primarily relate to the Mexican subsidiaries which have significant
mineral property, plant and equipment balances recorded.</P>
<P style="MARGIN-LEFT: 10%" align=justify>Impact on Consolidated Balance Sheets
(Unaudited)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=center>January
      1 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Inventory </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="15%" align=right>&nbsp;(88</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="15%" align=right>&nbsp;(68</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Property, plant and equipment </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="15%" align=right>(1,513</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="15%" align=right>(1,855</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Future income tax liability </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>(64</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>(158</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Adjustment to
      deficit </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="15%"
      align=right>&nbsp;(1,665</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="15%"
      align=right>&nbsp;(1,765</TD>
<TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>) </TD></TR></TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>Impact on Consolidated Statements of
Operations and Comprehensive Income (Unaudited)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Depreciation and depletion </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="15%" align=right>&nbsp;(322</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Foreign exchange gain (loss) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="15%" align=right>(89</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Deferred income tax expense </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>311 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Adjustment to
      comprehensive loss </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="15%"
      align=right>&nbsp;(100</TD>
<TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>) </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Management is also in the process of
finalizing its assessment of the potential tax effects of other IFRS adjustments
identified to date. </P>
<P align=center>50</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_51></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B>(f) Convertible Debentures </B></P>
<P style="MARGIN-LEFT: 5%" align=justify>Under Canadian GAAP, the asset,
liability and equity components of the Company&#146;s convertible debentures are
separately determined and classified on the consolidated balance sheets. The
asset portion represents the value of the Company&#146;s redemption option. The
liability component represents the amortized cost of the host debt contract,
while the equity component reflects the residual value at inception after
determination of the fair value of the host debt contract and redemption option
at inception. Transaction costs were allocated proportionately to the host debt
and equity components at the inception date.</P>
<P style="MARGIN-LEFT: 5%" align=justify>Under IFRS, due to the conversion
option&#146;s exercise price being denominated in a currency other than the Company&#146;s
functional currency, the holders&#146; conversion feature is also considered an
embedded derivative. As such all components of the convertible debentures are
presented on the consolidated balance sheet as financial liabilities. Under IFRS
the conversion and redemption features were separated from the host contract and
accounted for as a net derivative instrument. </P>
<P style="MARGIN-LEFT: 10%" align=justify>Impact on Consolidated Balance Sheets
(Unaudited)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%" align=center>January
      1 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Redemption option on convertible debentutre
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="15%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="15%" align=right>&nbsp;(2,693</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Liability portion of convertible debentures </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="15%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="15%" align=right>(4,483</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Convervitble debenture derivative liability
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="15%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="15%" align=right>21,926 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Common shares </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="15%" align=right>24,160 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="15%" align=right>959 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Equity portion of convertible debenture </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>(2,164</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Adjustment to
      deficit </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="15%"
      align=right>&nbsp;24,160 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="15%"
      align=right>&nbsp;18,931 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>Impact on Consolidated Statements of
Operations and Comprehensive Income (Unaudited)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Mark to market gain (loss) on derivative
      liability </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="15%" align=right>&nbsp;(3,982</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Mark to market gain on redemption call option </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="15%" align=right>&nbsp;(703</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Finance Costs </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;544 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Adjustment to
      comprehensive loss </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="15%"
      align=right>&nbsp;(4,141</TD>
<TD style="BORDER-BOTTOM: #000000 2px solid"  width="2%"
    align=left>) </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Management is still in the process of
finalizing the assessment of potential GAAP differences on the accounting for
the convertible debenture and also quantifying any required adjustments<B>
</B></P>
<P align=center>51</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_52></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P align=justify><B>(g) Presentation Adjustments </B></P>
<P style="MARGIN-LEFT: 5%" align=justify>The following presentation adjustments
have been identified by management to reflect management&#146;s provisional choice to
present the statement of operations on a function basis on transition to
IFRS.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B><U>Stock-based
compensation</U> <BR></B>In the Company&#146;s statement of operations
prepared in accordance with Canadian GAAP the stock-based compensation was
disclosed as a separate line item whereas under IFRS the Company has allocated
this amount based on the underlying function which results in a reallocation of
the costs. </P>
<P style="MARGIN-LEFT: 10%" align=justify>Impact on Consolidated Statements of
Operations and Comprehensive Income (Unaudited)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Stock-based compensation </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="15%" align=right>&nbsp;(4,613</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Production cost </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="15%" align=right>694 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Exploration cost </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="15%" align=right>436 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>General and
      administrative </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right>3,483    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Adjustment to comprehensive loss </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;- </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><B><U>Royalty expense</U>
<BR></B>In the Company&#146;s statement of operations prepared in accordance with
Canadian GAAP the royalty expense was included in cost of sales whereas under
IFRS the Company has reallocated this amount and disclosed it as a separate line
item. </P>
<P style="MARGIN-LEFT: 10%" align=justify>Impact on Consolidated Statements of
Operations and Comprehensive Income (Unaudited)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Cost of Sales </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="15%" align=right>&nbsp;(1,212</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Royalty expense
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right>1,212    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Adjustment to comprehensive loss </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;- </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><B><U>Finance Costs</U>
<BR></B>In the Company&#146;s statement of operations prepared in accordance with
Canadian GAAP the accretion of convertible debentures, interest expense and
accretion on asset retirement obligations were presented as; accretion of
convertible debentures, and within general and administration and depletion
&amp; depreciation, respectively. Under IFRS the Company will present these
amounts within Finance costs.</P>
<P style="MARGIN-LEFT: 10%" align=justify>Impact on Consolidated Statements of
Operations and Comprehensive Income (Unaudited)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Accretion of convertible debenture </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="15%" align=right>&nbsp;(1,088</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>General and administrative </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="15%" align=right>&nbsp;(39</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Depletion and depreciation </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="15%" align=right>&nbsp;(43</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Finance costs </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right>1,170    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Adjustment to comprehensive loss </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;- </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=center>52</P>
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width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B>ENDEAVOUR SILVER CORP.</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Management&#146;s Discussion and Analysis</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2010</B> </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(Expressed in
      US dollars unless otherwise noted)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%"
      align=left><B>Date of Preparation: March 18, 2011</B> </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><B><U>Corporate depreciation</U>
<BR></B>In the Company&#146;s statement of comprehensive income prepared in
accordance with Canadian GAAP the depreciation on corporate assets was included
with depreciation and depletion whereas under IFRS the Company has allocated
this amount based on the underlying function which results in a reallocation of
the costs to general and administrative. </P>
<P style="MARGIN-LEFT: 10%" align=justify>Impact on Consolidated Statements of
Comprehensive Income (Unaudited)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; " align=center
border=0 cellSpacing=0 cellPadding=0 width="80%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" width="15%"
      align=center>December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=center>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Depreciation and depletion </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="15%" align=right>&nbsp;(69</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>General and
      administrative </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right>69</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>Adjustment to comprehensive loss </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="15%"
    align=right>&nbsp;- </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=center>53</P>
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<DOCUMENT>
<TYPE>EX-99.4
<SEQUENCE>5
<FILENAME>exhibit4.htm
<DESCRIPTION>CERTIFICATE OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(A) OF THE EXCHANGE ACT
<TEXT>
<HTML>
<HEAD>
   <TITLE>Endeavour Silver Corp.: Exhibit 4 - Filed by newsfilecorp.com</TITLE>
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<P align=right><B>Exhibit 4 </B></P>
<P align=center><B>CERTIFICATION</B> </P>
<P align=justify>I, Bradford Cooke, certify that:</P>
<P align=justify>1&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;I have reviewed this annual
report on Form 40-F of Endeavour Silver Corp.; </P>
<P align=justify>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based on my knowledge, this
report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report; </P>
<P align=justify>3.&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;Based on my knowledge, the
financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of
operations and cash flows of the issuer as of, and for, the periods presented in
this report; </P>
<P align=justify>4.&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;The issuer&#146;s other certifying
officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal controls over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-5(f) for the issuer and have: </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the issuer, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared; </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles; </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Evaluated the effectiveness of the issuer&#146;s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;Disclosed in this report any change in the issuer&#146;s internal control over
financial reporting that occurred during the period covered by the annual report
that has materially affected, or is reasonably likely to materially affect, the
issuer&#146;s internal control over financial reporting; and </P>
<P align=justify>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The issuer&#146;s other certifying
officer(s) and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the issuer&#146;s auditors and the audit
committee of the issuer&#146;s board of directors (or persons performing the
equivalent functions): </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All
significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the issuer&#146;s ability to record, process, summarize and report
financial information; and </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_15></A>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;Any
fraud, whether or not material, that involves management or other employees who
have a significant role in the issuer&#146;s internal control over financial
reporting.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left >Date: March 21, 2011 </TD>
    <TD width="5%" align=left >By: </TD>
    <TD width="45%" align=left>/s/ Bradford Cooke </TD></TR>
  <TR>
    <TD >&nbsp;</TD>
    <TD width="5%" >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="45%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD width="5%" align=left >&nbsp; </TD>
    <TD width="45%" align=left>Bradford Cooke </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD width="5%" align=left >&nbsp; </TD>
    <TD width="45%" align=left>Chief Executive Officer </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD width="5%" align=left >&nbsp; </TD>
    <TD width="45%" align=left>(Principal Executive Officer)
</TD></TR></TABLE><BR>
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<DOCUMENT>
<TYPE>EX-99.5
<SEQUENCE>6
<FILENAME>exhibit5.htm
<DESCRIPTION>CERTIFICATE OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13A-14(A) OF THE EXCHANGE ACT
<TEXT>
<HTML>
<HEAD>
   <TITLE>Endeavour Silver Corp.: Exhibit 5 - Filed by newsfilecorp.com</TITLE>
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<P align=right><B>Exhibit 5 </B></P>
<P align=center><B>CERTIFICATION</B></P>
<P align=justify>I, Dan Dickson, certify that:</P>
<P align=justify>1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; I have reviewed this annual
report on Form 40-F of Endeavour Silver Corp.; </P>
<P align=justify>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based on my knowledge, this
report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report; </P>
<P align=justify>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Based on my knowledge, the
financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of
operations and cash flows of the issuer as of, and for, the periods presented in
this report; </P>
<P align=justify>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The issuer&#146;s other certifying
officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal controls over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-5(f) for the issuer and have: </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the issuer, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared; </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles; </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;Evaluated the effectiveness of the issuer&#146;s disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;Disclosed in this report any change in the issuer&#146;s internal control over
financial reporting that occurred during the period covered by the annual report
that has materially affected, or is reasonably likely to materially affect, the
issuer&#146;s internal control over financial reporting; and </P>
<P align=justify>5.&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;The issuer&#146;s other certifying
officer(s) and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the issuer&#146;s auditors and the audit
committee of the issuer&#146;s board of directors (or persons performing the
equivalent functions): </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All
significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the issuer&#146;s ability to record, process, summarize and report
financial information; and </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_17></A>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;Any
fraud, whether or not material, that involves management or other employees who
have a significant role in the issuer&#146;s internal control over financial
reporting.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left >Date: March 21, 2011 </TD>
    <TD width="5%" align=left >By: </TD>
    <TD width="45%" align=left>/s/ Dan Dickson </TD></TR>
  <TR>
    <TD >&nbsp;</TD>
    <TD width="5%" >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="45%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD width="5%" align=left >&nbsp; </TD>
    <TD width="45%" align=left>Dan Dickson </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD width="5%" align=left >&nbsp; </TD>
    <TD width="45%" align=left>Chief Financial Officer </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD width="5%" align=left >&nbsp; </TD>
    <TD width="45%" align=left>(Principal Financial and Accounting </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD width="5%" align=left >&nbsp; </TD>
    <TD width="45%" align=left>Officer) </TD></TR></TABLE><BR>
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<DOCUMENT>
<TYPE>EX-99.6
<SEQUENCE>7
<FILENAME>exhibit6.htm
<DESCRIPTION>CERTIFICATE OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
<TEXT>
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<HEAD>
   <TITLE>Endeavour Silver Corp.: Exhibit 6 - Filed by newsfilecorp.com</TITLE>
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<P align=right><B>Exhibit 6 </B></P>
<P align=center>CERTIFICATION PURSUANT TO </P>
<P align=center>18 U.S.C. &#167;1350, </P>
<P align=center>AS ADOPTED PURSUANT TO </P>
<P align=center>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 </P>
<P align=justify>In connection with the annual report of Endeavour Silver Corp.
(the &#147;Company&#148;) on Form 40-F for the period ended December 31, 2010 as filed
with the Securities and Exchange Commission on the date hereof (the &#147;Report&#148;),
I, Bradford Cooke, Chief Executive Officer of the Company, certify, pursuant to
18 U.S.C. &#167;1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that: </P>
<P style="MARGIN-LEFT: 5%" align=justify>(1) The Report fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and </P>
<P style="MARGIN-LEFT: 5%" align=justify>(2) The information contained in this
Report fairly presents, in all material respects, the financial condition and
results of operations of the Company. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>March 21, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%" align=left>/s/
      Bradford Cooke </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="50%" align=left>Bradford Cooke </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="50%" align=left>Chief Executive Officer </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="50%" align=left>(Principal Executive Officer)
</TD></TR></TABLE>
<P align=justify>A signed original of this written statement required by Section
906 has been provided to Endeavour Silver Corp. and will be retained by
Endeavour Silver Corp. and furnished to the Securities and Exchange Commission
or its staff upon request.<B> </B></P>
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<DOCUMENT>
<TYPE>EX-99.7
<SEQUENCE>8
<FILENAME>exhibit7.htm
<DESCRIPTION>CERTIFICATE OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
<TEXT>
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<P align=right><B>Exhibit 7 </B></P>
<P align=center>CERTIFICATION PURSUANT TO <BR>18 U.S.C. &#167;1350, <BR>AS ADOPTED
PURSUANT TO <BR>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 </P>
<P align=justify>In connection with the annual report of Endeavour Silver Corp.
(the &#147;Company&#148;) on Form 40-F for the period ended December 31, 2010 as filed
with the Securities and Exchange Commission on the date hereof (the &#147;Report&#148;),
I, Dan Dickson, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. &#167;1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that: </P>
<P style="MARGIN-LEFT: 5%" align=justify>(1) The Report fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and </P>
<P style="MARGIN-LEFT: 5%" align=justify>(2) The information contained in this
Report fairly presents, in all material respects, the financial condition and
results of operations of the Company. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left >March 21, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="50%" align=left>/s/
      Dan Dickson </TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD >&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD width="50%" align=left>Dan Dickson </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD width="50%" align=left>Chief Financial Officer </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD width="50%" align=left>(Principal Financial and Accounting Officer)
  </TD></TR></TABLE>
<P align=justify>A signed original of this written statement required by Section
906 has been provided to Endeavour Silver Corp. and will be retained by
Endeavour Silver Corp. and furnished to the Securities and Exchange Commission
or its staff upon request. </P>
<HR align=center color=black SIZE=5 width="100%" noShade>

</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.8
<SEQUENCE>9
<FILENAME>exhibit8.htm
<DESCRIPTION>CONSENTS OF WILLIAM J. LEWIS, B.SC., P.GEO. OF MICON INTERNATIONAL LTD ("MICON")
<TEXT>

<HTML>
<HEAD>
   <TITLE>Endeavour Silver Corp.: Exhibit 8 - Filed by newsfilecorp.com</TITLE>
   <META name="HandheldFriendly" content="true">
</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<!--$$/page=--><A name=page_1></A><p><IMG border=0
src="mlogo.gif"> </p>
<P align=center><B>CONSENT of AUTHOR </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>TO: </TD>
    <TD align=left width="95%" >British Columbia Securities
      Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >Alberta Securities Commission
  </TD></TR>
  <TR vAlign=bottom>
    <TD align=center></TD>
    <TD align=center width="95%"  >
      <P align=justify>&nbsp;Saskatchewan Financial Services
      Commission&nbsp;&nbsp;</P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >
      <P align=justify>Manitoba Securities Commission </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >
      <P align=justify>Ontario Securities Commission </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >Autorit&#233; des march&#233;s financiers
    </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >New Brunswick Securities
      Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >Nova Scotia Securities Commission
    </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >Prince Edward Island Securities
      Office </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >Securities Commission of
      Newfoundland and Labrador </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >U.S. Securities and Exchange
      Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%" >TSX Toronto Stock Exchange
  </TD></TR></TABLE>
<P align=justify>Dears Sirs/Mesdames:</P>
<P align=justify>I, William J. Lewis, BSc., P.Geo., do hereby consent to the
public filing of the technical report titled <I>&#147;NI 43-101 Technical Report
Audit of the Resource and Reserve Estimates for the Guanacev&#237; Project, Durango
State, Mexico&#148;</I> and dated March 15, 2011 (the "Technical Report") prepared
for Endeavour Silver Corp. and to extracts from or a summary of, the technical
report contained in the Annual Information Form dated March 18, 2011, the Annual
Report on Form 40-F dated March 18, 2011 and the Management Discussion &amp;
Analysis dated March 18, 2011, of Endeavour Silver Corp.</P>
<P align=justify>I confirm that I have read the Annual Information Form dated
March 18, 2011, the Annual Report on Form 40-F dated March 18, 2011 and the
Management Discussion &amp;Analysis dated March 18, 2011 of Endeavour Silver
Corp and that they fairly and accurately represent the information in the
technical report. </P>
<P align=justify>Dated this 21<SUP>st</SUP> day of March, 2011. </P>
<P align=justify><I>&#147;William J. Lewis&#148; </I></P>
<P align=justify>____________________<BR>William J. Lewis, BSc., P.Geo., </P>
<P align=center><B>SUITE 900 - 390 BAY STREET, TORONTO ONTARIO, CANADA M5H 2Y2
<BR>Telephone (1) (416) 362-5135 Fax (1) (416) 362 5763</B> </P><HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=-->
<A name=page_1></A>
<br>
<IMG
src="mlogo.gif" alt="" border=0><br>
<P align=center><B>CONSENT of AUTHOR </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left >TO: </TD>
    <TD align=left width="95%">British Columbia Securities Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Alberta Securities Commission </TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="95%" >Saskatchewan Financial Services
      Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Manitoba Securities Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Ontario Securities Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Autorit&#233; des march&#233;s financiers </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">New Brunswick Securities Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Nova Scotia Securities Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Prince Edward Island Securities Office </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Securities Commission of Newfoundland and
      Labrador </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">U.S. Securities and Exchange Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">TSX Toronto Stock Exchange </TD>
  </TR>
</TABLE>
<P align=justify>Dears Sirs/Mesdames:</P>
<P align=justify>I, William J. Lewis, BSc., P.Geo., do hereby consent to the
  public filing of the technical report titled <I>&#147;NI 43-101 Technical Report
    Audit of the Resource and Reserve Estimates for the Guanajuato Mines Project,
    Guanajuato State, Mexico&#148;</I> and dated March 15, 2011 (the "Technical Report")
  prepared for Endeavour Silver Corp. and to extracts from or a summary of, the
  technical report contained in the Annual Information Form dated March 18, 2011,
  the Annual Report on Form 40-F dated March 18, 2011 and the Management
  Discussion &amp; Analysis dated March 18, 2011, of Endeavour Silver Corp.</P>
<P align=justify>I confirm that I have read the Annual Information Form dated
  March 18, 2011, the Annual Report on Form 40-F dated March 18, 2011 and the
  Management Discussion &amp;Analysis dated March 18, 2011 of Endeavour Silver
  Corp and that they fairly and accurately represent the information in the
  technical report. </P>
<P align=justify>Dated this 21<SUP>st</SUP> day of March, 2011. </P>
<P align=justify><I>&#147;William J. Lewis&#148; </I></P>
<P align=justify>____________________<BR>
  William J. Lewis, BSc., P.Geo., </P>
<P align=center><B>SUITE 900 - 390 BAY STREET, TORONTO ONTARIO, CANADA M5H 2Y2 <BR>
  Telephone (1) (416) 362-5135 Fax (1) (416) 362 5763</B> </P>
<HR align=center width="100%" color=black noShade SIZE=5>

</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.9
<SEQUENCE>10
<FILENAME>exhibit9.htm
<DESCRIPTION>CONSENTS OF ROBERT J. LEADER, P.ENG AN ASSOCIATE WITH MICON
<TEXT>


<HTML>
<HEAD>
   <TITLE>Endeavour Silver Corp.: Exhibit 9 - Filed by newsfilecorp.com</TITLE>
   <META name="HandheldFriendly" content="true">
</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<!--$$/page=--><A name=page_1></A><p><IMG border=0
src="mlogo.gif"> </p>
<P align=center><B>CONSENT of AUTHOR </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left >TO: </TD>
    <TD align=left width="95%">British Columbia Securities Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">Alberta Securities Commission </TD></TR>
  <TR vAlign=bottom>
    <TD align=center ></TD>
    <TD align=center width="95%" >
      <P align=justify>&nbsp;Saskatchewan Financial Services
      Commission&nbsp;&nbsp;</P></TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">
      <P align=justify>Manitoba Securities Commission </P></TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">
      <P align=justify>Ontario Securities Commission </P></TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">
      <P align=justify>Autorit&#233; des march&#233;s financiers </P></TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">New Brunswick Securities Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">Nova Scotia Securities Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">Prince Edward Island Securities Office </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">Securities Commission of Newfoundland and
      Labrador </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">U.S. Securities and Exchange Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">TSX Toronto Stock Exchange </TD></TR></TABLE>
<P align=justify>Dears Sirs/Mesdames:</P>
<P align=justify>I, Robert J. Leader P. Eng. do hereby consent to the public
filing of the technical report titled <I>&#147;NI 43-101 Technical Report Audit of
the Resource and Reserve Estimates for the Guanacevi Project, Durango State,
Mexico&#148;</I> and dated March 15, 2011 (the "Technical Report") prepared for
Endeavour Silver Corp. and to extracts from or a summary of, the technical
report contained in the Annual Information Form dated March 18, 2011, the Annual
Report on Form 40-F dated March 18, 2011 and the Management Discussion &amp;
Analysis dated March 18, 2011, of Endeavour Silver Corp.</P>
<P align=justify>I confirm that I have read the Annual Information Form dated
March 18, 2011, the Annual Report on Form 40-F dated March 18, 2011 and the
Management Discussion &amp;Analysis dated March 18, 2011 of Endeavour Silver
Corp and that they fairly and accurately represent the information in the
technical report. </P>
<P align=justify>Dated this 21<SUP>st</SUP> day of March, 2011. </P>
<P align=justify><I>&#147;Robert J. Leader&#148; </I></P>
<P align=justify>____________________<BR>Robert J. Leader P. Eng. </P>
<P align=center><B>SUITE 900 - 390 BAY STREET, TORONTO ONTARIO, CANADA M5H 2Y2
<BR>Telephone (1) (416) 362-5135 Fax (1) (416) 362 5763</B> </P><HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=-->
<A name=page_1></A>
<br>
<IMG
src="mlogo.gif" alt="" border=0><br>
<P align=center><B>CONSENT of AUTHOR </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left >TO: </TD>
    <TD align=left width="95%">British Columbia Securities Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Alberta Securities Commission </TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center></TD>
    <TD align=left width="95%" >&nbsp;Saskatchewan Financial
      Services Commission&nbsp;&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Manitoba Securities Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Ontario Securities Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Autorit&#233; des march&#233;s financiers </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">New Brunswick Securities Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Nova Scotia Securities Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Prince Edward Island Securities Office </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Securities Commission of Newfoundland and
      Labrador </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">U.S. Securities and Exchange Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">TSX Toronto Stock Exchange </TD>
  </TR>
</TABLE>
<P align=justify>Dears Sirs/Mesdames:</P>
<P align=justify>I, Robert J. Leader P. Eng. do hereby consent to the public
  filing of the technical report titled <I>&#147;NI 43-101 Technical Report Audit of
    the Resource and Reserve Estimates for the Guanajuato Mines Project, Guanajuato
    State, Mexico&#148;</I> and dated March 15, 2011 (the "Technical Report") prepared
  for Endeavour Silver Corp. and to extracts from or a summary of, the technical
  report contained in the Annual Information Form dated March 18, 2011, the Annual
  Report on Form 40-F dated March 18, 2011 and the Management Discussion &amp;
  Analysis dated March 18, 2011, of Endeavour Silver Corp.</P>
<P align=justify>I confirm that I have read the Annual Information Form dated
  March 18, 2011, the Annual Report on Form 40-F dated March 18, 2011 and the
  Management Discussion &amp;Analysis dated March 18, 2011 of Endeavour Silver
  Corp and that they fairly and accurately represent the information in the
  technical report. </P>
<P align=justify>Dated this 21<SUP>st </SUP>day of March, 2011. </P>
<P align=justify><I>&#147;Robert J. Leader&#148; </I></P>
<P align=justify>____________________<BR>
  Robert J. Leader P. Eng. </P>
<P align=center><B>SUITE 900 - 390 BAY STREET, TORONTO ONTARIO, CANADA M5H 2Y2 <BR>
  Telephone (1) (416) 362-5135 Fax (1) (416) 362 5763</B> </P>
<HR align=center width="100%" color=black noShade SIZE=5>

</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.10
<SEQUENCE>11
<FILENAME>exhibit10.htm
<DESCRIPTION>CONSENT OF DIBYA KANTI MUKHOPADHYAY, MAUSIMM OF MICON
<TEXT>
<HTML>
<HEAD>
   <TITLE>Endeavour Silver Corp.: Exhibit 10 - Filed by newsfilecorp.com</TITLE>
   <META name="HandheldFriendly" content="true">
</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<!--$$/page=--><A name=page_1></A><p><IMG border=0
src="mlogo.gif"> </p>
<P align=center><B>CONSENT of AUTHOR </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left >TO: </TD>
    <TD width="95%" align=left>British Columbia Securities Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD width="95%" align=left>Alberta Securities Commission </TD></TR>
  <TR vAlign=bottom>
    <TD align=center >&nbsp;</TD>
    <TD  width="95%" align=left>Saskatchewan Financial Services
      Commission&nbsp;&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD width="95%" align=left>Manitoba Securities Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD width="95%" align=left>Ontario Securities Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD width="95%" align=left>Autorit&#233; des march&#233;s financiers </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD width="95%" align=left>New Brunswick Securities Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD width="95%" align=left>Nova Scotia Securities Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD width="95%" align=left>Prince Edward Island Securities Office </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD width="95%" align=left>Securities Commission of Newfoundland and
      Labrador </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD width="95%" align=left>U.S. Securities and Exchange Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD width="95%" align=left>TSX Toronto Stock Exchange </TD></TR></TABLE>
<P align=justify>Dears Sirs/Mesdames:</P>
<P align=justify>I, Dibya Kanti Mukhopadhyay, MSc., MAusIMM. do hereby consent
to the public filing of the technical report titled <I>&#147;NI 43-101 Technical
Report Audit of the Resource and Reserve Estimates for the Guanacevi Project,
Durango State, Mexico&#148;</I> and dated March 15, 2011 (the "Technical Report")
prepared for Endeavour Silver Corp. and to extracts from or a summary of, the
technical report contained in the Annual Information Form dated March 18, 2011,
the Annual Report on Form 40-F dated March 18, 2011 and the Management
Discussion &amp; Analysis dated March 18, 2011, of Endeavour Silver Corp.</P>
<P align=justify>I confirm that I have read the Annual Information Form dated
March 18, 2011, the Annual Report on Form 40-F dated March 18, 2011 and the
Management Discussion &amp;Analysis dated March 18, 2011 of Endeavour Silver
Corp and that they fairly and accurately represent the information in the
technical report. </P>
<P align=justify>Dated this 21<SUP>st</SUP> day of March, 2011. </P>
<P align=justify><I>&#147;Dibya Kanti Mukhopadhyay&#148; </I></P>
<P align=justify>_________________________<BR>Dibya Kanti Mukhopadhyay, MSc.,
MAusIMM. </P>
<P align=justify>&nbsp;</P>
<P align=center><B>Micon International Co Limited. Suite 10, Keswick Hall,
Keswick, Norwich, Norfolk, U.K., NR4 6TJ <BR></B><B>Telephone (44) (1603)-501501
Fax (44) (1603)-507007 E-mail office@micon-international.co.uk. Registered no.
4026319, England</B> </P>
<HR align=center color=black SIZE=5 width="100%" noShade>

</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.11
<SEQUENCE>12
<FILENAME>exhibit11.htm
<DESCRIPTION>CONSENTS OF CHARLEY Z. MURAHWI, M.SC., P.GEO, MAUSIMM OF MICON
<TEXT>


<HTML>
<HEAD>
   <TITLE>Endeavour Silver Corp.: Exhibit 11 - Filed by newsfilecorp.com</TITLE>
   <META name="HandheldFriendly" content="true">
</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<!--$$/page=--><A name=page_1></A><p><IMG border=0
src="mlogo.gif"> </p>
<P align=center><B>CONSENT of AUTHOR </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left >TO: </TD>
    <TD align=left width="95%">British Columbia Securities Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">Alberta Securities Commission </TD></TR>
  <TR vAlign=bottom>
    <TD align=center ></TD>
    <TD align=center width="95%" >
      <P align=justify>&nbsp;Saskatchewan Financial Services
      Commission&nbsp;&nbsp;</P></TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">
      <P align=justify>Manitoba Securities Commission </P></TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">Ontario Securities Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">Autorit&#233; des march&#233;s financiers </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">New Brunswick Securities Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">Nova Scotia Securities Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">Prince Edward Island Securities Office </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">Securities Commission of Newfoundland and
      Labrador </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">U.S. Securities and Exchange Commission </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="95%">TSX Toronto Stock Exchange </TD></TR></TABLE>
<P align=justify>Dears Sirs/Mesdames:</P>
<P align=justify>I, Charley Z. Murahwi, MSc., P.Geo., MAusIMM. do hereby consent
to the public filing of the technical report titled <I>&#147;NI 43-101 Technical
Report Audit of the Resource and Reserve Estimates for the Guanacevi Project,
Durango State, Mexico&#148;</I> and dated March 15, 2011 (the "Technical Report")
prepared for Endeavour Silver Corp. and to extracts from or a summary of, the
technical report contained in the Annual Information Form dated March 18, 2011,
the Annual Report on Form 40-F dated March 18, 2011 and the Management
Discussion &amp; Analysis dated March 18, 2011, of Endeavour Silver Corp.</P>
<P align=justify>I confirm that I have read the Annual Information Form dated
March 18, 2011, the Annual Report on Form 40-F dated March 18, 2011 and the
Management Discussion &amp;Analysis dated March 18, 2011 of Endeavour Silver
Corp and that they fairly and accurately represent the information in the
technical report. </P>
<P align=justify>Dated this 21<SUP>st</SUP> day of March, 2011. </P>
<P align=justify><I>&#147;Charley Z. Murahwi&#148; </I></P>
<P align=justify>____________________ </P>
<P align=justify>Charley Z. Murahwi, MSc., P.Geo., MAusIMM. </P>
<P align=center><B>SUITE 900 - 390 BAY STREET, TORONTO ONTARIO, CANADA M5H 2Y2
<BR>Telephone (1) (416) 362-5135 Fax (1) (416) 362 5763</B> </P><HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<br>
<IMG
src="mlogo.gif" alt="" border=0><br>
<P align=center><B>CONSENT of AUTHOR </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left >TO: </TD>
    <TD align=left width="95%">British Columbia Securities Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Alberta Securities Commission </TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="95%" >Saskatchewan Financial Services
      Commission&nbsp;&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Manitoba Securities Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Ontario Securities Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Autorit&#233; des march&#233;s financiers </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">New Brunswick Securities Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Nova Scotia Securities Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Prince Edward Island Securities Office </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">Securities Commission of Newfoundland and
      Labrador </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">U.S. Securities and Exchange Commission </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="95%">TSX Toronto Stock Exchange </TD>
  </TR>
</TABLE>
<P align=justify>Dears Sirs/Mesdames:</P>
<P align=justify>I, Charley Z. Murahwi, MSc., P.Geo., MAusIMM. do hereby consent
  to the public filing of the technical report titled <I>&#147;NI 43-101 Technical
    Report Audit of the Resource and Reserve Estimates for the Guanajuato Mines
    Project, Guanajuato State, Mexico&#148;</I> and dated March 15, 2011 (the "Technical
  Report") prepared for Endeavour Silver Corp. and to extracts from or a summary
  of, the technical report contained in the Annual Information Form dated March
  18, 2011, the Annual Report on Form 40-F dated March 18, 2011 and the Management
  Discussion &amp; Analysis dated March 18, 2011, of Endeavour Silver Corp.</P>
<P align=justify>I confirm that I have read the Annual Information Form dated
  March 18, 2011, the Annual Report on Form 40-F dated March 18, 2011 and the
  Management Discussion &amp;Analysis dated March 18, 2011 of Endeavour Silver
  Corp and that they fairly and accurately represent the information in the
  technical report. </P>
<P align=justify>Dated this 21<SUP>st</SUP> day of March, 2011. </P>
<P align=justify><I>&#147;Charley Z. Murahwi&#148; </I></P>
<P align=justify>____________________ </P>
<P align=justify>Charley Z. Murahwi, MSc., P.Geo., MAusIMM. </P>
<P align=center><B>SUITE 900 - 390 BAY STREET, TORONTO ONTARIO, CANADA M5H 2Y2 <BR>
  Telephone (1) (416) 362-5135 Fax (1) (416) 362 5763</B> </P>
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</TEXT>
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<DOCUMENT>
<TYPE>EX-99.12
<SEQUENCE>13
<FILENAME>exhibit12.htm
<DESCRIPTION>CONSENT OF KPMG LLP
<TEXT>
<HTML>
<HEAD>
   <TITLE>Endeavour Silver Corp.: Exhibit 12- Filed by newsfilecorp.com</TITLE>
   <META name="HandheldFriendly" content="true">
</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<!--$$/page=--><A name=page_1></A>&nbsp;<BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD  align=left><IMG border=0
      src="kpmg.gif"></TD>
    <TD width="33%" align=left><B>KPMG LLP</B> <BR><B>Chartered
      Accountants</B> <BR>PO Box 10426 777 Dunsmuir Street <BR>Vancouver BC V7Y
      1K3 <BR>Canada </TD>
    <TD width="33%" align=left>Telephone (604) 691-3000 <BR>Fax (604) 691-3031
      <BR>Internet www.kpmg.ca </TD></TR></TABLE>
<P align=justify><B>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
</B></P>
<P align=justify>To the Board of Directors of Endeavour Silver Corp.<B> </B></P>
<P align=justify>We consent to the use of: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>our Independent Auditors' Report of Registered Public Accounting Firm dated
  March 18, 2011 on the consolidated balance sheets of Endeavour Silver Corp.
  (the &#147;Company&#148;) as at December 31, 2010 and 2009, and the consolidated
  statements of operations and comprehensive income (loss), shareholders&#146; equity
  and cash flows for each of the years in the three-year period ended December
  31, 2010, and </P>
  <LI>
  <P>our Report of Independent Registered Public Accounting Firm dated March 18,
  2011 on the effectiveness of the Company&#146;s internal control over financial
  reporting as of December 31, 2010, </P></LI></UL>
<P align=justify>each of which is included in this annual report on Form 40-F of
the Company for the fiscal year ended December 31, 2010.</P>
<P align=justify><B>//s// KPMG LLP </B></P>
<P align=justify>Chartered Accountants </P>
<P align=justify>March 18, 2011 <BR>Vancouver, Canada </P>
<P style="MARGIN-LEFT: 35%" align=justify><font size="1">KPMG LLP is a Canadian limited
liability partnership and a member firm of the KPMG <BR>
network of independent
member firms affiliated with KPMG International Cooperative <BR>
(&#147;KPMG
International&#148;), a Swiss entity. <BR>
KPMG Canada provides services to KPMG LLP.
</font></P>
<HR align=center color=black SIZE=5 width="100%" noShade>

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<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>14
<FILENAME>endeavourlogo.gif
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